Bangladesh economic expansion continuedin FY19, supported by rising exports and record remittances.Inflation remained within the 5.5 percent target, supportedby bumper rice harvests. Broad money growth increasedmarginally. Private sector credit growth was weak and bankliquidity remains constrained. Non-performing loanscontinued to rise in the banking sector. The current accountdeficit declined with higher export and lower import growth.Bangladesh Bank interventions moderated the depreciation ofthe taka against the US dollar, but the real effectiveexchange rate appreciated. The fiscal deficit has reached4.6 percent of GDP as expenditure increased and revenuecollection remained below target. Recent tax policyadjustments are likely to constrain revenue growth in thenear term, while additional subsidies will increaserecurrent expenditure. Sustaining growth will requiremomentum on the reform agenda to address challenges in thebusiness climate, public investment management, revenuemobilization, and the resolution of fragile banks. Economictransformation will require development of new skills in theworkforce. Tertiary educational institutions can supportthis agenda if quality, relevance, and access challenges are addressed.
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