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Bangladesh’s Foreign Reserves Dip Below $19bn Mark

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During the eleventh month of the current fiscal year, the country’s foreign currency reserves have fallen below $19 billion for the first time. After paying off some import bills, the reserves have now stood at $18.26 billion on Sunday.

According to the International Monetary Fund (IMF), as of May 8, the total foreign currency reserves of the country were $19.82 billion.

Mohammad Mezbauul Haque, the spokesperson of Bangladesh Bank, informed that through the Asian Clearing Union (ACU), the central bank has paid off import bills totaling $1.63 billion over the past two months.

However, Bangladesh Bank maintains that after paying off the import bills, the foreign currency reserves now stand at $23.71 billion.

According to the Central Bank’s accounts, the reserves were $25.27 billion on May 8.

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President of S. Korea Announces record $19 bn plan to boost chip industry

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South Korean President Yoon Suk Yeol on Thursday announced a record $19-billion-dollar support plan for the country’s crucial semiconductor industry.

South Korea is home to the world’s top memory chipmakers Samsung Electronics and SK hynix and last year pledged to build the world’s largest chip centre using $456 billion of private investment as it seeks an edge in the global industry.

“We have created a comprehensive support programme for the semiconductor industry worth 26 trillion Korean won, which encompasses financial, infrastructure, research and development, as well as support for small and medium-sized companies,” he said, according to a statement from his office.

The package includes a $7 billion investment announced earlier this month.

Yoon also said Seoul would extend tax benefits for chip investments, in hopes of boosting employment and attracting more talent to the industry.

The country is also building a “mega chip cluster” just outside Seoul, which the government claims will be the world’s largest semiconductor-making complex and create millions of jobs.

“As you all know, semiconductors are a field of national all-out war,” Yoon said.

“Winning or losing depends on who makes the state-of-the-art semiconductors with high information processing capabilities first. The state must provide support for semiconductors so that they do not lag behind competitors,” he added.

With the new package, Yoon said there would be a “new semiconductor financial support programme worth 17 trillion won” run through the Korea Development Bank, to allow companies to make crucial new investments.

“As companies invest enormous amounts of money in facilities such as new factories and line expansions, liquidity problems arise,” he said.

“I believe that these difficulties will be largely resolved through the Korea Development Bank’s support programme,” he added.

– Key sector –

The plan will also create a “semiconductor ecosystem fund” worth a trillion won, which will support fabless companies and small and medium enterprises linked to the industry.
“Our fabless market share is still in the one percent range, and foundry, which manufactures system semiconductors, is unable to close the gap with leading companies such as TSMC,” Yoon said.

Earlier this month, Seoul said it would set up an aid package worth more than $7 billion to support its chip industry, as part of its drive to boost the semiconductor sector, which is critical to Asia’s fourth-largest economy.

The moves come as the government looks to invest heavily in six key technologies including chips, displays and batteries, all areas where the country’s tech giants are well-established already.

Semiconductors are South Korea’s leading export and hit $11.7 billion in March, their highest level in almost two years, accounting for a fifth of South Korea’s total exports, according to trade ministry figures.

Samsung in May 2022 unveiled a massive 450 trillion won five-year investment blueprint aimed at making the country a frontrunner in key sectors from semiconductors to biologics.

Securing supplies of advanced chips has become a crucial issue internationally, with the United States and China locked in a fierce battle for control of the market.

“South Korea is supplying 80 percent of the world’s memory semiconductors, and has said it is investing 300 trillion won in the Yongin cluster, but there has been a water supply issue with it,” Kim Dae-jong, a professor of business administration at Sejong University in Seoul, told AFP.

“On top of tackling such issues, today’s announcement seems to be an effort to support innovative small and medium-sized enterprises to further strengthen their competitiveness against (rivals) like Taiwan.”

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Australia Announces Additional Funding to Support Bangladesh’s Economic Reforms

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Australia will increase funding for the Australian Trade Agency to enhance economic engagement with Bangladesh and support its economic reforms as it graduates from least developed country status, Australian Foreign Minister Penny Wong announced today.

“We will provide additional funds to help Bangladesh align its labour laws with the requirements and aspirations of that graduation,” Wong stated during a press briefing following her meeting with Bangladeshi Foreign Minister Hasan Mahmud at the State Guest House Padma in Dhaka.

She emphasized Australia’s commitment to the multilateral system and the importance of upholding international rules and norms. Besides deepening economic ties, Australia will also fund technical education training colleges in Bangladesh.

“We share a region, we share an ocean, and we share a future. We are determined to do all that we can to work with you and other partners to ensure a region that is peaceful, stable, and prosperous,” Wong added.

Foreign Minister Hasan highlighted that this marks the first visit by an Australian Foreign Minister in 26 years. “We had a very good discussion. Bangladesh and Australia are having a very good relationship. Australia has contributed a lot,” he said.

He noted that two-way trade has grown to around $4 billion, reflecting Bangladesh’s significant economic growth. “This is quite impressive. The trade volume was much smaller ten years ago.”

Hasan mentioned that the Australian FM assured him of continued duty-free and quota-free market access to Australia.

Wong praised Bangladesh’s leadership on climate action, which aligns with Australia’s commitment to significant emissions reductions and a clean energy economy. She confirmed Australia’s ongoing support for Bangladesh’s transition.

Hasan requested investment in Bangladesh’s 100 economic zones and 40 high-tech villages. “We discussed collaboration in this area, as well as addressing human trafficking and environmental cooperation,” he said.

Wong also addressed the Rohingya crisis, stating, “We need a safe and enduring solution that allows the Rohingya a safe return to their homeland. Tomorrow I will travel to Cox’s Bazar to see firsthand how our assistance is being delivered.”

Australia has invested around 860 million Australian dollars over six years in response to the Rohingya crisis. Wong affirmed continued cooperation with ASEAN and other regional countries to resolve the conflict in Myanmar.

“We are working on practical solutions to climate change, regional maritime security, and people smuggling. These challenges require partnership and collaboration,” Wong said, emphasizing the importance of deeper cooperation between the Australian and Bangladeshi Coast Guards.

When asked about the Quadrilateral Security Dialogue (QSD) or Quad, Wong responded, “We are a member of the Quad and other regional forums. Australia, as a middle power, values partnerships, collaboration, and engagement. We will continue to collaborate with Indian Ocean countries through the Indian Ocean Rim Association (IORA).”

Bangladesh High Commissioner to Australia M Allama Siddiqui and acting Australian High Commissioner to Dhaka Nadia Simpson were also present at the meeting.

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Bangladesh’s Economy Projected to Grow at 5.82% in FY24

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The Bangladesh Bureau of Statistics (BBS) has projected that the country’s economy will grow at a rate of 5.82% in the current fiscal year (FY24), ending on June 30. This provisional estimate shows a slight increase from last fiscal year’s 5.78% growth. The figure aligns closely with forecasts by the International Monetary Fund (5.7%) and the World Bank (5.6%).

In terms of per capita income, there has been a modest rise to $2,784 in the current fiscal year from $2,749 in the previous year. This estimate is based on data from the first seven months of FY24.

Initially, the government had projected a growth rate of 7.5% for the current fiscal year in the budget, but this was later revised downward to 7%.

Bangladesh’s Gross Domestic Product (GDP) at current prices has increased to $459 billion, up from $452 billion in the previous fiscal year.

Sector-wise analysis shows mixed trends. The agriculture sector is estimated to grow by 3.21% this fiscal year, down from 3.37% last year, marking a 0.16% decrease. The industry sector is projected to grow by 6.66%, down from 8.37%, reflecting a 1.71% decrease. Conversely, the services sector is expected to grow by 5.80% this fiscal year, up from 5.37% in the previous year, indicating a 0.43% increase.

The investment-to-GDP ratio remains steady at 30.98%, according to BBS data. In the agriculture sector, the estimated growth for this fiscal year is 3.21%, down from 3.37% the previous year, marking a 0.16% decrease.

Additionally, the domestic savings and national savings rates stand at 27.61% and 31.86%, respectively, for the current fiscal year. Compared to the previous fiscal year, investment increased by 0.03%, domestic savings by 1.85%, and national savings by 1.91%.

Private sector investment growth is estimated at 23.5% this fiscal year, compared to 24.18% in the previous year.

The BBS also estimated the consumption rate at 74.24% in FY24, up from 72.39% in the previous fiscal year.

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