Macroeconomic &

Socioeconomic
Performance Analysis
of
Bangladesh
Prepared by

Shifat Mahmud Nurul Md. Rysul Md. Zamilur Md. Mahmud

(Id. 04) Ambia Alaul Kibria Badhon Reza Hassan
(Id. 14) (Id. 18) (Id. 20) (Id. 26)
Economic
Growth
 Table : GDP, GNI, Per Capita GDP and GNI at Current Market Prices

Item 2014-15 2015-16 2016-17 2017-18 2018-19*

GDP (In Crore Tk.) 1515802 1732864 1975815 2250479 2536177

GNI (In Crore Tk.) 1614204 1832675 2060716 2353108 2649787

Population (In Crore) 15.79 15.99 16.18 16.37 16.56

Per Capita GDP (In Tk.) 96004 108378 122152 137518 153197

Per Capita GNI (In Tk.) 102236 114621 127401 143789 160060
Figure : Share of three Major Sectors in the Last More than three Decades at Constant Prices
Figure : Sector wise GDP growth
 Major Flaws
1. GDP growth data is puzzling.
Mismatch with Export and Remittance growth

2. Construction cost is higher than any other countries of the world.

Corruption is the major culprit.
3. ForeignCountry
countries areCost (Four lane 1km highway)
working on major projects.
India $1.3 million
Less employment opportunity for own people.
China $1.6 million
Bangladesh $11.9 million
Source: The Daily Star
Foreign Direct
Investment
Figure : Yearly Time Series Data on FDI Inflows (Net)
Figure : FDI Inflows during 2018
Figure : Top Five Foreign Investors of 2018(in million dollars)
Figure : Top Five FDI receiving Sectors of 2018(in million dollars)
Figure 8: FDI Growth in Bangladesh
Factors behind FDI growth
1. Rapid economic growth
2. A large young workforce

3. Megaprojects that will increase connectivity

4. Lot of power plants for uninterrupted power supply

5. 100 Special Economic Zone by 2030

6. Political Stability
Inflation and Consumer
Price Index
 Consumer Price Index and Inflation Base Year 2005-2006

2013-14 2014-15 2015-16 2016-17 2017-18

General index 195.08 207.58 219.86 231.82 245.22

General Inflation 7.35 6.41 5.92 5.44 5.78

Food index 209.79 223.8 234.77 248.9 266.64

Food Inflation 8.56 6.68 4.9 6.02 7.13

Non-food index 176.23 186.79 200.66 209.92 217.76

Non-food Inflation 5.55 5.99 7.43 4.61 3.74

 Food and Non-food
components are in
negative
Inflation Trends of Food, correlation
Non-Food, Core Items General
inflation
(Non-Food , Non- 5.47
Energy)
From June 15 to June 19
 FY 19 Monetary Policy FY 19 Monetary Policy
Objectives Outcomes

Targeted Inflation Achieved Inflation

Ceiling 5.6 Ceiling 5.47

Overview of
Monetary Policy Real GDP Real GDP
& Outcomes Target 7.80 Achieved 8.13
FY20 Monetary Policy

Real GDP Growth

Target 8.2

CPI Inflation Ceiling

Target 5.5
 ECONOMICALLY
ACTIVE POPULATION

UNEMPLOYMENT ABOVE 15 YEARS IS

6.35 CRORE
MALE 4.35 CRORE
AND FEMALE 2.00
CRORE
Unemplyment rate of Bangladesh
(source- WorldBank Data)
 A steep rise can be seen
 It couldbe due to the boom of
private universities across
nation
 Missmatch of skillset with
existing demand
 STEPS TO IMPROVE UNEMPLOYMENT

 Maintaining industrial peace

 Preparation/Revision of Acts and rules:  Compliance
 Fire safety security
 Preparation of Bangladesh Labor Act
 Establishment of RCC (Remediation
(Amendment),2018: Update of ‘Bangladesh
Coordination Cell)
Labor Act, 2006'
 Resolving Complaints
 Strengthening the legal basis of compliance and
mutual relations  Minimum Wages

 Implementation of Bangladesh labor rules 2015  Accident Compensation

 Preparation of ‘Domestic Workers Protection  Skill development & training

and Welfare Policy 2015’
 Eradicating Child Labor
 Product Manufacturers Act, 2018
 Innovation & ICT training
INTEREST RATES & IRS
INTEREST RATE SPREAD (IRS)
 IRS=Interest rates on Advances – Interest
Rates on Deposits
 One of the highest IRS in the world until
recently, above 5%
 Recently it came down to an Avg. of 4.15%
 High initial setup and operational costs
 Some PCBS and FCBs
 Bangladesh Bank's Directions
 Huge fixed cost in setting up ATM and IT
infrastructure
 Due to large amount of classified loans
 High interest on treasury bonds
 Increasing efficiency

RECOMMENDATIONS Lessening risky loans to avoid defaults

TO REDUCE IRS

Thoroughly investigating cases of defaults to

further preventing it

Setting target profit to shady PCBs or even

branches of any Banks
Socio-economic
Development Analysis
GINI INDEX

Lorenz curve by World Bank Estimate.

Why Inequality is Rising?

 Slow progress in poverty reduction and

rising inequality
 increasing inequality to access health
care, education, financial services and
social protection
 Inadequate government social
protection programmes
 regressive fiscal policies
 Corruption
 Distribution of Govt. priviledges
 Mismatch with Economic Growth
 Wage growth
 Job creation
HDI Steadily Rising
HDI Steadily Rising
EASE OF DOING BUSINESS
Figure: Ease of doing Business Rank (2010-2018)
REASEONS?

 REGULATORY UNPREDICTABILITY
 UNCERTAINTY
 LACK OF COHERENCE IN POLICY IMPLEMENTATION
Export Growth and
Diversification
 Export Growth
• BD became the 54th largest export economy in the world
• Export earnings grew 10.55% to $40.53 billion in the 2018-2019 FY
• But Export contribution to GDP is declining
 Export Growth
• RMG comprises more than 82% of the Export earnings
• Leather and leather goods fetched $1.01 billion, down 16.11% in 2018-19 FY
• Exports of jute and jute goods fell 20.41%
 Export Growth
• BD losing apparel market share to Vietnam

• Lagging behind in Technology adoption, lead time, logistics support, ability

to attract FDI
• BD rank 123rd among 129 countries in Export Diversification
 Export Diversification

PHARMACEUTICALS
 Export Diversification
• Pharmaceutical market size $2.4B with 15.6% Annual Growth Rate
• Expected to grow at 15% year-on-year to $5.11 billion by 2023
• Exports rises 25.60% to $130 million in FY19
 Export Diversification

AGRO-PROCESSING

• BD earned $372 million in 2017-18

• Exports up by 40.72%
• Currently exports to 144 Countries
• Expected Export of $2B by 2021
 Export Diversification

PLASTIC PRODUCTS

• Net export $112.79M

• Growth rate 25.27%
• 1.5M Employment
 Unemployment Greater volume of Income inequality
Foreign direct
Investment (FDI)

Expertise in Infrastructure Social Security

Social Benefit
Recommendations advanced technical
skill
Development

Opportunities Improvement in the Ease Reduced moral crisis,

Artificial intelligence of Doing Business Rank and depression
Service provider
Thank You