Bangladesh economy showed its mettle in 2009 when it passed one of the toughest tests triggered by the global financial meltdown, which significantly impacted performances in the major Asian nations and most of the developed countries, officials said Thursday.

They said almost all the major sectors including exports, imports, remittance and the stock market of the South Asian country have performed well in 2009 despite the shocks of global recession.

The country’s central bank Thursday said Bangladesh attained a 5.9 percent GDP (gross domestic product) growth in the first half of the current fiscal year 2009-10 (July 2009-June 2010), leaving six more months to achieve the 6 percent target.

“Our GDP target growth will be achieved by the end of the fiscal year as all the key indicators of the economy are showing positive trend,” Bangladesh Bank (BB) governor Atiur Rahman told reporters Thursday.

Briefing journalists on the economy in the outgoing 2009 Thursday, he said this year began with fear of global recession shocks but the Bangladesh Awami League-led newly elected government after coming into power in January this year set right kind of directions to safeguard the country’s economy from the shocks of recession.

As a result of the time befitting measures, the governor said growth in the country’s two major sectors — export and agriculture– was satisfactory in the outgoing year 2009. Bangladesh’s export earning grew at a rate of 10 percent in 2009 and agriculture by 4.8 percent, he added.

The BB governor said imports including capital machinery are also on rise, indicating that the domestic business and investments are gaining momentum.

The central bank data showed Bangladedsh’s capital machinery import surged by 24 percent in July-November of this fiscal year while imports of consumer goods in the same period rose by 44 percent year on year.

Rate of inflation, a major concern of the country, was at 5.1 percent in October, the BB governor said and expressed the hope that it would not go beyond this fiscal year’s target of 6.5 percent.

An economist on condition of anonymity said political stability, which is very rare in the South Asian, also contributed to achieve steady economic growth in 2009.

Bangladesh maintained a steady growth in 2009 despite global financial turmoil but growing power and energy shortages and poor infrastructure remained as a major hurdle to the country’s industrial activities, Annisul Huq, President of Bangladesh’s apex trade body, was quoted as saying in a report of leading English newspaper The Financial Express Thursday

The BB governor, however, differed from the arguments that the inadequate energy supply would hinder the employment and eventually the poverty reduction initiatives.

Production of electricity in the public sector in Bangladesh in2009 stood reportedly at about 4,300 MW per day against the daily demand for about 7,000 MW.

The BB governor also referred to the highest ever foreign exchange reserves, remittances despite huge fall in overseas jobs, stable exchange rates, adequate liquidity in the banking sector and increasing revenue earnings.

Bangladesh’s foreign exchange reserves hit a record high of 10.36 billion U. S. dollars at the end of the last month from 9.54 billion U.S. dollars at the end of October.

The BB data showed in July-November, the first five months of Bangladesh’s financial year 2009-10 (from July 2009 to June 2010),remittances totaled 4.67 billion U.S. dollars, registering a 24.40percent growth over the corresponding period of the previous fiscal year.

It showed domestic investment increased by 15 percent during January-October this year despite the foreign direct investment registered fall to some extent.

Listing future challenges of the economy, Atiur said the impact of climate change would remain the main challenge to the development of the country as the number of man-made disasters are on rise in the recent years.

Bangladesh suffered a big blow due to cyclone Aila in May, 2009,which was the biggest natural calamity in the country after a powerful cyclone Sidr that battered its southwestern coastal belt on Nov. 15, 2007 and claimed lives of over 4,000 people.

source : http://news.xinhuanet.com/english/2009-12/31/content_12736663.htm

Bangladesh asked developed economies on Monday to ensure the world’s poorest countries get enough help in countering the global financial crisis.

Of the additional $1.1 trillion (666 billion pound) programme committed by the Group of 20 major advanced and emerging economies, only $50 billion was targeted specifically at low income countries, the government said.

“The resources must be distributed adequately for the benefit of the poor nations and that needs strong commitment from the developed world,” said Finance Minister Abul Maal Abdul Muhith.

The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and Bangladesh Bank, the central bank, organised a four-day meeting on strengthening the response to the global financial crisis in the region.

Noeleen Heyzer, the Under Secretary General of the United Nations and Executive Secretary of UN-ESCAP, also called for a larger share of additional resources for both short term liquidity and long term development financing.

“With over four trillion dollars in foreign exchange reserves, the Asian region now has the resources to foster a major programme of generating additional demand through investments in regional infrastructure development,” Noeleen said.

He said the global crisis, billed as the worst since the Great Depression of the 1930s, could cost as many as 24.8 million people in the Asia Pacific region their jobs.

“Millions more will experience rising income insecurity,” Noeleen said in the meeting attended by senior central bank and government financial officials from most of the countries in the region including China, India, Malaysia, Pakistan, Philippines, Republic of Korea, Russian Federation, Thailand and Vietnam.

“The region’s dynamism that helped in lifting millions of people out of poverty over the past decade is now under threat with the average growth rate for developing Asia-Pacific coming down from 8.8 percent in 2007 to 5.8 percent in 2008 and to just 2.8 percent this year,” he said.

He said that experience from Asia’s 1997 economic crisis indicates that while economic growth may resume relatively quickly, it could take up to 10 years to recover the ground lost to poverty and social breakdown.

“Demand weakness in North America and Europe caused by chains of insolvencies and wide-scale job losses sharply weakened exports from manufacturing hubs in our region,” said Bangladesh’s central bank governor Atiur Rahman.

Workshop On Global Financial Crisis To Begin In Bangladesh Monday
A high profile international workshop will begin in the capital, Dhaka on Monday where participants will brainstorm on the global financial crisis, officials said on Sunday.

The workshop has been organized by the macroeconomic policy and development division of the Economic and Social Commission for Asia and the Pacific (ESCAP), the regional arm of the United Nations headquartered in Bangkok, and hosted by the Bangladesh Bank, the central bank of Bangladesh.

Senior finance and central bank officials from 17 Asia-Pacific countries will meet in the four-day workshop titled “Strengthening the response of the global financial crisis in Asia-Pacific: the role of monetary, fiscal and external debt policies,” to look at various economic policies used by regional governments in dealing with the global crisis.

“Participants are expected to share how conditions in their countries, and their ability to respond, determined the different economic approaches governments ultimately used,” the central bank of Bangladesh said in a press statement.

Sharing of best practices in implanting effective macro-economic polices and identifying key areas for regional cooperation and coordination will also be a common thread for discussion throughout the meeting, the statement added.

Finance Minister Abul Maal Abdul Muhith is scheduled to inaugurate the workshop, followed by an opening message from Dr. Noeleen Heyzer, under-secretary-general of the United Nations and executive secretary of ESCAP. The governor of the Bangladesh Bank, Atiur Rahman, will deliver the keynote address.

The participating countries are Bangladesh, Bhutan, Cambodia, China, Fiji, India, Lao PDR, Malaysia, Maldives, Nepal, Pakistan, Philippines, Republic of Korea, Russian Federation, Sri Lanka, Thailand and Vietnam

Bangladesh as a developing contry has to has much concious stepping considering the Global recession.

They said all indicators relating to monetary policy and exchange rate will be included in the new monetary policy statement.

Under the new monetary policy, the central bank will ask the banks and non-banking financial institutions (NBFIs) to strengthen internal control to avert any financial risks.

“The BB will also gear up its monitoring and supervision aiming to keep unhurt the country’s banking system from the global financial crisis,” the BB official added.

To keep economy sound with the effect of world recession Bangladesh Bank took many innitiative.
The central bank of Bangladesh purchased over $1.50 billion from the commercial banks in the fiscal ended on June 30 to keep the inter-bank foreign exchange market stable.
As part of the move, the central bank of Bangladesh purchased $37 million from four commercial banks on the day on the same ground,
The central bank has continued its intervention in the inter-bank foreign exchange market through selling and buying of the US currency directly besides providing overdraft facilities to the banks for keeping the overall market stable.
total of $1.511 billion was bought in fiscal 2008-2009 (FY09) against only $202.50 million of the previous fiscal, according to the central bank statistics.

Market players, however, welcomed the BB’s move saying that such intervention is needed to keep the market stable.

“The central bank is playing its regulatory roll giving comfort to us,” Vice-Chairman of the Bangladesh Foreign Exchange Dealers’ Association and Chief Executive Officer of the Janata Bank Limited S.M. Aminur Rahman told the AHN in Dhaka on Monday.

A senior treasury official of a foreign commercial bank said such measure will benefit both exporters and migrant workers who send home billions of U.S. dollars each year.

United States is the undeclared king of world economy. In recent world recession US kingship is followed little weaker than any other time , To rescue the political – economic and other relation worlwide US innitiated the diplomatic activities more conciously.
Barak Obama the new leader of US is trying to lead the world with some new visions. preliminary all are good and appreciated. In part of this mission
 U.S. Assistant Secretary of State for South and Central Asian Affairs Robert O. Blake will arrive in Dhaka on Saturday for a two-day official visit to Bangladesh.
“This is his first visit to Bangladesh as Assistant Secretary,” a U.S. embassy press statement said in Dhaka on Thursday.
The U.S. envoy will meet with Prime Minister Sheikh Hasina, Foreign Minister Dr. Dipu Moni, Home Affairs Minister Advocate Sahara Khatun and opposition leader and former Prime Minister Khaleda Zia.
“In each of these meetings, the Assistant Secretary will discuss new opportunities for cooperation between the United States and Bangladesh,” the statement added.
He will also meet with parliamentarians, business people, and members of the civil society.

Its expected that the visit will bring many opportunity for both contry win win factors

World recession impact on Bangladesh is soft and mind!!!!!

Bangladesh growth would be moderate: IMF

The International Monetary Fund (IMF) has predicted a moderate growth rate for Bangladesh in view of the global economic slowdown, which has dented the country’s exports.

At the same time, the IMF said Bangladesh seems to have benefited too from the global fall in prices of oil, food and other commodities as a result inflation in the country has come down to six percent, a two-year low.

“Overall, Bangladesh’s economy has so far remained relatively robust,” it said in a statement at the conclusion of its mission to Bangladesh from March 30 to April 2.

The IMF said the domestic economy has retained momentum from a favourable agricultural performance and it continues to benefit from the fall in food, fuel and other commodity prices.

Limited capital account dependence has largely protected the country’s banks and stock market from the first round impact of the global crisis.

However, pressures from the global slowdown continue to build and it is likely that growth will moderate, IMF said.

“Garment and other exports are slowing and garment export orders are now declining. Any significant slowdown in the export sector is likely to weigh heavily on the domestic economy through a reduction in demand for services, transport and construction,” it said

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Detail:

The following statement was issued today in Dhaka after the conclusion of an International Monetary Fund (IMF) staff visit to Bangladesh:

“A team led by Mr. Masato Miyazaki, Advisor in the Asia and Pacific Department of the IMF, visited Dhaka March 30 – April 2, 2009 to discuss recent economic developments with the government and other stakeholders. The team was privileged to meet with Finance Minister AMA Muhith, Planning Minister AK Khandker, Advisor for Finance and Planning Dr. Mashiur Rahman, Bangladesh Bank Governor Dr. Salehuddin Ahmed, Finance Secretary Dr. Mohammad Tareque, NBR Chairman Md. Abdul Mazid, other senior government officials, and members of the private sector and civil society. The team expresses its deep appreciation to the authorities and others for sharing their valuable time for discussions.

“Overall, Bangladesh’s economy has so far remained relatively robust. The domestic economy has retained momentum from a favorable agricultural performance. Bangladesh continues to benefit from the fall in food, fuel and other commodity prices and this has helped bring inflation down to 6 percent, a two-year low. Limited capital account dependence has largely protected the country’s banks and stock market from the first round impact of the global crisis.

“However, pressures from the global slowdown continue to build and it now seems likely that growth will moderate. Garment and other exports are slowing and garment export orders are now declining. Any significant slowdown in the export sector is likely to weigh heavily on the domestic economy through a reduction in demand for services, transport and construction. Remittances remain robust but in recent months the number of workers leaving Bangladesh for employment abroad has declined and the number of workers returning from abroad has risen. These factors may put downward pressure on the current account of the balance of payments and increase the need for policies to maintain the momentum of domestic demand.

“The revised budget for FY2009 (July-June) and the budget for FY2010 should be formulated with a view to create the fiscal space necessary for contingent actions that may become necessary to help ease economic challenges to the population. This will be difficult in light of likely shortfalls in revenue in FY2009 and the fact that revenue prospects are likely to be very weak in FY2010 and future years without appropriate changes in tax policy and revenue administration. The upcoming budget provides the opportunity for the government to signal its major economic policy intentions. In this context, the new government should consider carefully revenue reforms to support government spending for infrastructure and social investment that, in turn, will boost the economy’s medium-term growth potential and accelerate poverty reduction. Further support for increased public investment should come through steps to develop a robust and transparent framework for public-private partnerships and strong efforts to streamline the project approval process and project implementation.

“Improving efficiency of financial markets is vital to bringing down the cost of financing growth. Recent expansion in the secondary market for government paper is an encouraging sign and should help with the emergence of a yield curve that can be used to help develop corporate bonds and other debt instruments. Dealing with distressed assets and enhancing the capital base of the state-owned commercial banks is needed to build and maintain confidence in the overall financial system. The government should assist these banks to clean up and strengthen their balance sheets while ensuring strengthened oversight of these banks.

“The mission looks forward to returning to Dhaka for the annual Article IV Consultation later in 2009.”

Based on a real good governance philosophy “the equitable distribution of wealth.” described by Prof. Syed Ahsanul Alam Parvez. Through which prof Ahsan described the primary guideline for innitiative or awareness to overcome the global recession and to overcome the political demand of Bangladeshi Citizen. 
A Cautionary Note to Bangladesh’s Prime Minister Sheikh Hasina- -Prof. Syed Ahsanul Alam Parvez.

After a landslide victory you are assuming the premiership of Bangladesh when the world is facing one of the worst recession of contemporary history. There are good reasons to believe that Bangladesh will face the trauma of the global recession by late 2009. The have-nots and the poor people of our country will not be able to bear it. So you have no option but to be proactive and act in time to surprise the world. Your and our creator gave you a lifetime chance to write your name in gold as the world’s most benevolent lady prime minister by turning Bangladesh to a middle income country during your office this time as prime minister. You have to address the issue of income distribution and social justice in our country very thoughtfully. You should be the first Prime minister of Bangladesh with the aim of raising awareness and creating framings and visions that promote equal dignity for all citizens in the country you govern. (more…)

Bangladeshi commercial banks have started slashing their interest rates on deposit this month in line with the central bank’s latest interest rate policy.while interest rates on lending remained almost the same in the country’s banking sector.

Bangladesh Bank (BB), slashed its interest rate on repurchase agreement (repo) and reverse repo after nearly seven months aiming to offset the ongoing global financial recession through boosting fresh investment.

“Slashing interest rates on deposit by the commercial banks will encourage investment of fresh funds in different sectors that would also help offset the impact of ongoing global economic recession on the country’s economy” Analyst.

Market is now having more liquidity than the end of the last calendar year because of falling trend of import payments and export performances recently,” the chief executive officer of a private commercial bank said, adding that more banks might also cut their interest rates on deposit in the next months in line .

Meanwhile, only one commercial bank reduced its interest rates on lending this month, while two banks raised interest rates on lending for different sectors, the BB officials said.

The country’s commercial banks are now offering interests in the range between 5.25 per cent and 13.50 per cent on fixed deposit schemes, while the rates for saving accounts varies between 2.50 per cent and 8.00 per cent, according to the central bank statistics.

Currently, the banks provide loans to large and medium scale industries at interest rates ranging between 11 per cent and 15 per cent and to small industries between 10 per cent and 16.50 per cent.

Interest rates on housing loans range between 11.50 per cent and 16.00 per cent and consumer credits 10.50 per cent and 19.00 per cent.

The banks lending rates on working capital to large and medium scale industries range between 10.50 per cent and 16.00 per cent and for small industries between 10.50 per cent and 16.50 per cent, the BB data showed.

Bangladesh world banking :

The central bank of Bangladesh purchased $15 million more in U.S. dollars from two commercial banks on Tuesday to keep the inter-bank foreign exchange market stable.to help Banks comply with the net open position (NOP) rules for holding the foreign currency fund properly.The central bank continues its intervention in the inter-bank foreign exchange through selling and buying of the U.S. currency directly and providing overdraft facilities to the banks.

-Back Story :

17th March, 2009 the BB similarly purchased $18 million from two private commercial banks on the same ground.

The central bank of Bangladesh started the intervention in the market by buying the U.S. currency directly from the commercial banks on Jan. 15. to keep the market steady.

Since then, the BB has bought $307.20 million from commercial banks as part of its intervention in the market, they confirmed.