Quarterly Economic Update - Bangladesh

Abstract

An unfavorable external environment and the economic fallout from 11 September have notably undermined the country’s growth prospects for FY2002. Weak external and domestic demand are likely to drive down GDP growth during FY2002. Although a steady increase in workers’ remittances has somewhat mitigated the pressures on the current account, foreign exchange reserves continue to remain under stress. Heightened external pressures have also aggravated the fiscal imbalance with the government’s borrowing from banking and nonbanking sources remaining high. Monetary policy continues to be accommodating to fund higher spending and inflation has picked up due to an increase in food grain prices.