Bangladesh’s economy is anticipated to expand by 6.5% in fiscal year 2024, reflecting an improvement in domestic demand and enhanced export growth, as per the recent Asian Development Bank (ADB) report titled “Asian Development Outlook (ADO) September 2023.” This growth projection is slightly higher than the 6.0% recorded in the previous fiscal year, driven by a recovering euro area.
Inflation is predicted to decrease to 6.6% in the current fiscal year, down from 9.0% in FY2023. Additionally, the current account deficit is expected to narrow marginally, from 0.7% of GDP in the previous fiscal year to 0.5% in FY2024, thanks to improved remittance growth.
The report identifies the main risk to this growth projection as a potential deterioration in export growth if global demand remains weaker than anticipated.
ADB Country Director Edimon Ginting commented on the government’s effective management of external economic uncertainties, highlighting ongoing infrastructure development and crucial reforms aimed at enhancing the investment climate. These structural reforms encompass bolstering public financial management, mobilizing domestic resources, optimizing logistics, and deepening the financial sector to foster private sector growth, diversify exports, and create productive employment opportunities in the medium term.
The report also underscores the importance of addressing climate change by expanding domestic renewable energy supply in the context of elevated oil prices.
The revival of private consumption, driven by moderate inflation and increased remittances, coupled with the completion of significant government infrastructure projects boosting investment, is expected to stimulate economic growth. However, the initial uptick in interest rates following adjustments to the country’s monetary policy framework may temper private investment.
Inflation is projected to ease due to lower global non-fuel commodity prices, increased agricultural production, and the initial tightening of monetary policy under the new framework.
Momen Urges Kosovo to Tap into Skilled Workforce & Import from Key Sectors
The Foreign Minister, in a meeting today with the outgoing Kosovo ambassador Güner Ureya, urged Kosovo to recruit skilled human resources and consider importing high-quality readymade garments and pharmaceuticals from Bangladesh. The ambassador paid a farewell call on the Foreign Minister at the foreign ministry this afternoon.
During the meeting, the Foreign Minister commended the ambassador for actively advancing bilateral relations and emphasized the importance of enhancing people-to-people contact for stronger mutual relations. The outgoing envoy, in turn, expressed appreciation for Bangladesh’s progress and development across various sectors. Additionally, the envoy briefed the Foreign Minister on the shared interest of business communities in both Bangladesh and Kosovo to boost trade and investment between the two countries.
Discussions also encompassed topics such as women empowerment and the necessity of peace for sustainable development. The outgoing envoy lauded the people, culture, and the beauty of Bangladesh.
Bangladesh Records $1.93bn November Remittance Amid Dollar Woes
In the farewell month of November, Bangladesh received remittances totaling $1.93 billion, equivalent to 193 crore dollars in local currency (approximately 21,181 crore 75 lakh taka at the exchange rate of 109.75 taka per dollar). This information was disclosed in the recent update from the Bangladesh Bank.
The instability in the dollar market within the country has been a longstanding issue, and the crisis is escalating. Due to the shortage of foreign currency, strict measures have been imposed on imports. The government and the central bank are working to resolve the crisis, resorting to supplying dollars from reserves. However, these efforts have yet to yield a significant improvement in the situation.
Despite a stable supply of dollars for sale from reserves to stabilize the market, various bill payments from reserves are dwindling. The dollar sale has resulted in a reduction of reserves by more than $6 billion in the first five months of the fiscal year 2023-24 (July-November). The net reserves have fallen to $25 billion, and according to BPMEA-6, a further decrease to $19 billion is noted.
Amidst these challenges, there was hope for an increase in remittances to mitigate the dollar crisis. However, November witnessed remittances amounting to $1.93 billion, which is nearly five crore dollars less than the previous month, October. Comparatively, it is more than 33 crore dollars higher than in November of the previous year.
According to the recent Bangladesh Bank report, the November remittances arrived through state-owned banks, totaling 14 crore 42 lakh 60 thousand dollars, through a particular bank, reaching five crore 31 lakh 80 thousand dollars, through private commercial banks, amounting to 172 crore 66 lakh 80 thousand dollars, and through foreign banks, totaling 59 crore 20 thousand dollars. Seven banks, including Rupali Bank, Rajshahi Krishi Unnayan Bank (RAKUB), Islami Bank, Social Islami Bank, Habib Bank, National Bank of Pakistan, and State Bank of India, did not receive any remittance during this period.
Bangladesh faced challenges in remittance inflow during the fiscal year 2022-23, with the pandemic-induced closure of hundi channels contributing to a significant decline. However, in the first five months of the current fiscal year (2023-24), expatriates have sent the highest remittance through official banking channels, amounting to 216.1 crore dollars.
NBR’s Fiscal Year Start Sees Robust 14.36% Growth in Revenue Collection
During the initial four months of the current fiscal year (FY24), the National Board of Revenue (NBR) recorded a robust 14.36 percent growth in revenue collection from income tax, customs, and VAT, amounting to Taka 1,03,976 crore.
Customs contributed Taka 32,668 crore, VAT brought in Taka 40,048.62 crore, and income tax and travel tax totaled Taka 31,259 crore. Despite this positive performance, the overall revenue collection fell short of the targeted Taka 1,23,185 crore for the July-October period.
Comparatively, in the same period of the previous fiscal year (FY23), NBR’s revenue collection was Taka 29,937 crore from customs, Taka 26,784 crore from income tax, and Taka 34,197 crore from VAT. Notably, the NBR has set an ambitious revenue collection target of Taka 4,30,000 crore for the current fiscal year.
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