Bangladesh Development Update, April 2018 : Building on Resilience
Industrial production and services growth remained resilient. Inflation has accelerated, primarily due to supply shocks. Monetary policy has been accommodative. Financial sector vulnerability is rising. With a tightening of prudential controls, len...
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Dhaka
2018
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| Online Access: | http://documents.worldbank.org/curated/en/904861523286370425/Bangladesh-development-update-building-on-resilience http://hdl.handle.net/10986/29678 |
| Summary: | Industrial production and services
growth remained resilient. Inflation has accelerated,
primarily due to supply shocks. Monetary policy has been
accommodative. Financial sector vulnerability is rising.
With a tightening of prudential controls, lending rates are
back to double digits. Despite significant recovery in both
exports and remittances, the current account deficit widened
sharply, driven by a surge in imports. The overall balance
of payments swung into deficit for the first time since
FY11. Consequently, the exchange rate has depreciated.
Interventions to smoothen exchange rate adjustments have
eroded foreign exchange reserves. The fiscal deficit has
been contained as weak revenue growth was counterbalanced by
even weaker growth in expenditures. GDP growth is projected
in the 6.5-7 percent range in the medium-term, while macro
stability will require heightened vigilance. Poverty
reduction has continued but slowed. The amount of poverty
reduction achieved by each percent of growth fell by a
third. Extreme poverty is projected to fall modestly to
11-12 percent in the medium-term. Downside risks center on
the solvency of banks and the run-up to elections elevating
instability and policy uncertainty. Going forward,
investment and innovation enabling reforms will be key to
accelerating development progress. |
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