Fast Market Research recommends "Bangladesh Business Forecast Report Q1 2013" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 02/05/2013 -- Core Views
The government's record on corruption has again been hit and brought into the domestic and international spotlight, following a highly critical report by Transparency International Bangladesh. Public unrest owing to heightened tensions between the ruling Bangladesh Awami League (AL) and its main opposition, the Bangladesh Nationalist Party (BNP), are unlikely to subside as both sides continue to confront each other regarding the restoration of the caretaker government system.
In FY2012/13 (July-June), as we expect domestic macroeconomic conditions to be more supportive, we believe that the broader economy will stabilise. We project the Bangladeshi economy to grow by 6.3% this fiscal year.
View Full Report Details and Table of Contents
That said, we remain concerned about the likelihood of the still-bleak external environment offsetting some of the domestic gains. Indeed, in the near term, the critical readymade garment (RMG) sector's prospects remain subdued given its pronounced reliance on the sluggish economies of the EU and the US.
We continue to see Bangladesh Bank (BB) reversing its long-held hawkish stance on monetary policy this fiscal year, with the ongoing spate of disinflation continuing to bode well for our call of 25 basis points (bps) worth of rate cuts.
While the amount of remittance inflows into Bangladesh has been encouraging, we believe that there is an acute risk of a crisis in inflows as Dhaka continues to dither on its ongoing labour dispute with the UAE.
A few months into its extended credit facility (ECF) with the International Monetary Fund (IMF), it appears that relations between the Bangladeshi government and the international lender are already starting to sour, as the former dithers on key tax and banking sector reforms. In our view, the government's posture towards the IMF's agenda will continue to be one of hesitation.
Major Forecast Changes
The government decided to revise the base year for calculation consumer price inflation (CPI) to 2005-2006 and change the weights of the basket, resulting in a large one-off fall in the headline inflation rate. Regardless of this drop, our view for continued disinflation and for the central bank to soon reverse its two-year long hawkish stance on monetary policy remains unchanged. For our purposes, we are sticking to the 1995-1996 CPI index until we obtain more readings of inflation based on the later weights.
Key Risk To Outlook
Downside Risks To Growth: We highlight that the government's ongoing reliance on debt will continue to be a cause for concern, given the associated inflationary and crowding out risks. However, we note that public sector debt growth has slowed considerably.
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Country Reports research reports at Fast Market Research
You may also be interested in these related reports:
- Singapore Business Forecast Report Q1 2013
- Poland Business Forecast Report Q1 2013
- Sri Lanka Business Forecast Report Q1 2013
- Russia Business Forecast Report Q1 2013
- Slovenia Business Forecast Report Q1 2013
- Slovakia Business Forecast Report Q1 2013
- Vietnam Business Forecast Report Q1 2013
- Australia Business Forecast Report Q1 2013
- Iraq Business Forecast Report Q1 2013
- Latvia Business Forecast Report Q1 2013