Bangladesh Economy in FY2015-16 June 2016 Interim Review of Macroeconomic Performance

Abstract

In the face of formidable challenges, the Bangladesh economy continued to show signs of resilience throughout the FY2015-16 period. The economy benefitted from a number of advantages from the perspective of macroeconomic management that were sustained from the previous fiscal year (FY2014-15). Macroeconomic stability was maintained, thanks to falling inflation, contained budget deficit, and large surpluses in both current and financial accounts in the balance of payments (BOP), which was reinforced by impressive export growth and rising foreign direct investment (FDI), and increasing foreign exchange reserves. Declining interest rate on lending has played an important role in the recovery of credit growth to the private sector. Provisional estimates of gross domestic product (GDP) growth rate for FY2015-16 is indicative of strong performance, although private investment (as a share of GDP) is expected to decline, and the drivers of growth to remain outside of real sectors. Moving forward, Bangladesh needs to translate this macroeconomic stability into higher investment and higher growth. Bangladesh will also need to prioritise a sustainable and inclusive growth agenda in the light of the Sustainable Development Goals (SDGs), at a time when the first year of the Seventh Five Year Plan (7FYP) comes to an end.