Country Report Bangladesh July 2009

Outlook for 2009-10

• The ruling Awami League (AL) is expected to serve a full term in office, having secured a huge parliamentary majority at the general election in December 2008. The main opposition Bangladesh Nationalist Party won just 29 seats.
• The likely monopolisation of parliament by the AL for the next few years raises the risk of large street protests, a tactic that has been used in the past to express opposition to the government.
• Given its GDP forecast for fiscal year 2009/10 (July-June), which is lower than the official projection, the Economist Intelligence Unit expects the budget deficit to widen to 6% of GDP, compared with an estimated 5.8% in 2008/09.
• Real GDP is expected to grow by 5.2% in 2009/10. Weaker inflows of workers' remittances will limit private consumption growth, while the downturn in the global economy will depress demand for Bangladeshi exports.
• Consumer price pressures are expected to moderate in 2009 on the back of lower global food and energy prices. We expect consumer price inflation to average 5.1% in 2009, before accelerating to an average of 6.4% in 2010.
• The merchandise trade deficit will be substantial in 2009-10 as the external environment becomes more challenging for exporters

Monthly review

• Preparations are under way for the establishment of a war crimes tribunal to prosecute those accused of having committed human rights violations during the liberation war of 1971.
• Recent developments suggest that the government is keen to revert to a set of values espoused by Bangladesh's first president, Sheikh Mujibur Rahman, who was in favour of secularism, democracy, nationalism and socialism.
• Relations with India have been strained by India's plans to construct a dam on the Barak river, which flows from the state of Assam into Bangladesh. Bangladeshis are concerned that this will restrict water flow into the country.
• In a bid to address energy shortages, the government introduced daylight-saving time in June. The new measure means that businesses now open and close an hour earlier, reducing the need for artificial lighting in the evening.
• The government has pressed ahead with plans to improve the highway system between the capital, Dhaka, and the country's main seaport, Chittagong. It aims to increase the number of lanes from two to four.
• According to data recently published by the Bureau of Statistics, the economy grew by 5.9% in 2008/09, bolstered by strong performances by the services and agricultural sectors, which expanded by 6.3% and 4.5% respectively.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;37;70;53;49;82;2834;80;20;22;39;48
NAICS Code: 52;336;72;44;22;61;3254;62;311;313;517