Bangladesh Development Update, October 2018 : Powering the Economy Efficiently

World Bank

World Bank, Washington, DC

关键词: ECONOMIC GROWTH;    FINANCIAL MARKETS;    BALANCE OF PAYMENTS;    FISCAL TRENDS;    MONETARY POLICY;   

RP-ID  :  130459

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Strong growth, driven by consumption andpublic investment, has continued. Macroeconomic stability isstrained. Inflation has picked up, driven by food priceincreases initially and by non-food inflation more recently.Notwithstanding rebound in garment exports and remittances,the current account deficit has widened significantlybecause of a surge in imports. A large increase in thedisbursement of medium and long-term loans helped containpressure on foreign exchange reserves and moderate thedepreciation of the exchange rate. Monetary growth has beensubdued because of decline in public sector borrowing frombanks and reduced net international reserves, creating roomfor increased private sector credit growth. However, weakdeposit growth and the persistence of high levels ofnon-performing loans have led to rise in lending rates. Thefiscal deficit has increased despite underspending on publicinvestment as revenue growth fell well short of the budgettarget. Excessive reliance on expensive saving instrumentsto finance the budget deficit has continued.Over thenear-term, growth is expected to remain resilient,underpinned by strong domestic demand. Inflation is likelyto accelerate with rising aggregate demand resulting in partfrom election related increase in private spending, anexpansionary fiscal policy and depreciating exchange rate.The current account deficit and the fiscal deficits areprojected to widen, but the risks of both external andpublic debt distress are low. Downside risks include fiscalslippages aggravated by drying up of assistance forsupporting the Rohingyas, delays in banking reforms, loss ofmonetary policy predictability due to diminished centralbank independence and weakening reform momentum in therun-up to the elections. Moving forward, creating more andbetter jobs by boosting private investments, diversifyingexports and building human capital remain the top mostpolicy priorities. In addition to handling macroeconomicimbalances through increased flexibility in the exchangerate and interest rates, this would require ensuring apredictable and efficient system of business regulation,faster progress on the implementation of the megainfrastructure projects, improving financial sectorgovernance, and ensuring an adequate and reliable supply of electricity.