Country Report Bangladesh December 2008

Outlook for 2009-10

• Assuming that a parliamentary election goes ahead as planned, the caretaker government is expected to hand over power to a democratically elected government by the start of 2009.
• Despite the introduction of a range of electoral reforms, the poll is expected to be fought between the countrys largest political parties, the Awami League (AL) and the Bangladesh Nationalist Party.
• The Economist Intelligence Unit expects the budget deficit in fiscal year 2008/09 (July-June) to rise to the equivalent of 5.3% of GDP, compared with the official target of 5% given in the 2008/09 budget.
• Following downward revisions made to our growth forecasts for the Middle East, we now expect real GDP to grow by 4.1% in Bangladesh in 2009/10, down from 4.5% previously.
• Inflationary pressures are expected to ease over the forecast period, averaging 7.1% in 2009, compared with an estimated 9.4% in 2008.
• The merchandise trade deficit will be substantial in 2009-10 as the external environment becomes more challenging.

Monthly review

• The caretaker government and the Election Commission have continued to prepare for the parliamentary poll, due on December 18th.
• The return of the leader of the AL, Sheikh Hasina Wajed, from a trip to the US to receive medical treatment has fuelled speculation that the leaders of the two main political parties will be allowed to contest the election.
• Relations with Myanmar were strained in November by a maritime border dispute, which was sparked by Myanmar's decision to conduct gas exploration work in disputed waters in the Bay of Bengal.
• The government sanctioned a cut in domestic petrol, diesel and propane prices in late October, as international oil prices continued to fall.
• In October and November international donors pledged their support to a variety of projects in Bangladesh, ranging from infrastructure to education.
• Signs of weakness in the most dynamic areas of the economy began to emerge in November. The knitwear sector reported a 10% year-on-year fall in overseas orders in September.
• Remittances from Bangladeshis working overseas, which had grown at an annual rate of around 48% in recent months, slowed to 17.4% in October.

Source: Country Report

This report covers the following industry codes:
SIC Code: 49;60
NAICS Code: 22;52