Country Report Bangladesh November 2008

Outlook for 2009-10

• Assuming that a parliamentary election goes ahead as scheduled on December 18th, the caretaker government is expected to hand over power to a democratically elected government before the end of the year.
• Despite the introduction of a range of electoral reforms, the election is expected to be fought between the countrys largest political parties, the Awami League (AL) and the Bangladesh Nationalist Party (BNP).
• 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% in the 2008/09 budget.
• Following the downward revisions to our forecasts for the global economy, we now expect real GDP to grow by 5.5% in fiscal year 2008/09, compared with our previous forecast of 6%.
• Inflationary pressures are expected to ease over the forecast period, averaging 7.3% 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

• In October the Election Commission (EC) made further preparations for the parliamentary election. The voter list has been finalised and the EC now has one of the largest electronic databases of voters in the world.
• In recent weeks, members of the BNP and the AL have threatened to boycott the forthcoming poll unless corruption charges filed against their respective leaders are dropped.
• In October banking officials assessed the domestic sectors exposure to banks and investment firms in the US as very low.
• Mohammad Yunus, a Nobel Peace Prize winner and a pioneer of microcredit, has warned that the domestic economy could be hit by a slowdown in global growth.
• The latest macroeconomic data point to significant weaknesses in the economy. Industrial production growth in fiscal year 2007/08 slowed to 6.8%, down from an average 10% in the previous two fiscal years.
• The latest inflation data show consumer prices stabilising in August. Although the consumer price index increased by 10.1% year on year, the rate of increase was slower than in the previous month, when prices rose by 10.8%.

Source: Country Report

This report covers the following industry codes:
SIC Code: 22
NAICS Code: 313