Resource information
This report highlights recent economic
updates in Bangladesh as of April 2015. Economic growth in
Bangladesh was gaining momentum in the first half of FY15.
Capacity utilization improved and investments were showing
some signs of recovery. This growth was also job-friendly.
The 12-monthly-moving average inflation decelerated from 7.6
percent in February 2014 to 6.8 percent in February 2015.
The resilience of the Bangladesh economy continues to be
tested by faltering political stability, weak global
markets, and structural constraints. These are inhibiting
the economy s income growth as well as progress on shared
prosperity. Despite the emergence of a $1.3 billion deficit
in the current account in the first seven months of FY15,
the surplus in the overall balance of payments has been
sustained, leading to continued accumulation of official
foreign exchange reserves to prevent nominal exchange rate
appreciation. Reserves are at a comfortable level at over 6
months of imports of goods and services. Fiscal policy has
remained consistent with macroeconomic stability. Tax
revenue growth has been weaker than targeted while
expenditure have also been short due as usual to an
implementation shortfall. The projected recovery in global
growth, particularly in the United States and the Euro Zone,
and continued softness in international commodity prices,
bode well for Bangladesh. The country will need to restore
political stability and implement faster structural reforms
to capitalize on these opportunities. The potential GDP
growth rate is on a declining path due to declining labor
force growth and stagnant productivity growth, as well as
the rate of capital accumulation. Raising the low Female
Labor Force Participation (FLFP) rate offers on opportunity
to boost the economy s potential growth rate. Moving
forward, the biggest challenge remains ensuring durable
political stability. This is a precondition for accelerated,
inclusive, and sustainable growth.
