World Bank retains Bangladesh’s growth forecast at 5.7% for FY25

The World Bank has kept its economic growth forecast for Bangladesh unchanged at 5.7 percent for the upcoming fiscal year although the government is shooting for a much higher GDP expansion. The projection from the Washington-based lender comes a couple of days after the government targeted a 6.75 percent growth of the gross domestic product — the final value of goods and services produced in an economy in a certain period — for 2024-25. Bangladesh’s economy is likely to grow 5.7 percent in FY25, supported by increased private consumption for easing inflation and a pick-up in overall investment for implementation of large investment projects, the WB said yesterday in its Global Economic Prospects. The agency said overall output would expand 5.6 percent in the current fiscal year, which ends this month. The Bangladesh Bureau of Statistics provisionally estimates the GDP growth to be at 5.82 percent in 2023-24. Among the South Asian nations, the multilateral lender raised its growth outlook for India, Bhutan, and Sri Lanka and lowered projections for Nepal, Pakistan and the Maldives. It now expects the world economy to grow by 2.6 percent this year, up 0.2 percentage points from its last update in January.

Source: https://www.thedailystar.net/business/economy/news/wb-retains-bangladeshs-growth-forecast-57-fy25-3632791

Bank deposits drying up as inflation bites

Banks seem having hit the brakes on deposit mobilisation as the January-March first quarter of this year frustrated their expectation, in a rare development that analysts blame on persisting higher inflation on the economy. The deposit receipt contracted 0.75 per cent to Tk 17.62 trillion at the end of March over its preceding quarter, according to Bangladesh Bank statistics. These exclude interbank items, meaning that these are purely customer deposits. However, the customers’ deposits grew by 0.57 per cent to Tk 14.91 trillion in the urban areas from where around 85 per cent of the money comes. And the rural deposit growth increased by 1.8 per cent to Tk 2.71 trillion. In the meantime, overall deposit growth was recorded 2.1 per cent to Tk 17.49 trillion in the October-December period. At the end of March 2024 bank deposits registered an increase of 9.25 per cent or Tk 1.49 trillion on a year-on-year basis. Senior central bankers told the FE that this slow growth is mainly due to stubbornly higher inflation, national elections in January and Ramadan spending. Emranul Huq, managing director and CEO of another private commercial bank – Dhaka Bank – told the FE that inflation is the main culprit behind it. “Many savers withdraw funds to compensate for the price surges in the market,” he said. “Usually, bank deposits used to come from the middle-income group of people through DPS and yearly savings schemes, but the middle-income people are in trouble due to the inflation.” Economists, however, put stress on the year-on-year growth figures as quarterly data often have seasonality matters. But they say the deposit growth of 9.25 per cent y-o-y is also alarming for the economy as the government has planned to borrow Tk 1.375 trillion.

Source: https://thefinancialexpress.com.bd/economy/bank-deposits-drying-up-as-inflation-bites

Revenue from property registration jumps, set to double in 2 years

The government’s revenue from property registration is set to almost double in two years at the end of the current fiscal year which officials attribute to increased monitoring and measures taken to make the registration-related services easy and accessible. Real estate investors hope the proposed budgetary provision to allow investment of undisclosed income in plot and flat will give a further boost to the growth of property registration revenue, a major source of tax income beyond the National Board of Revenue. The revenue from the sector, which already surpassed the FY23 amount of Tk15,124 crore in the first nine months of FY24, is likely to reach Tk22,000 crore at the end of the fiscal year. This will be a significant growth from Tk11,600 crore in FY22, official data show. The government has set a revenue collection target of Tk5,41,000 crore in the proposed national budget for the fiscal 2024-25. Of this, it proposed collecting Tk4,80,000 crore through NBR taxes, Tk15,000 crore from non-NBR taxes, and Tk46,000 crore from non-tax revenue.

Source: https://www.tbsnews.net/nbr/revenue-property-registration-jumps-set-double-2-years-874961

SME Foundation extends low-cost funds to small and medium entrepreneurs

The SME Foundation plans to offer low-cost funds at 6% interest – much lower than the current bank rate of over 13% – to small and medium enterprises facing multifaceted challenges in accessing loans to expand their businesses. For the revival of SMEs, which were the worst affected by Covid, the state-run institution will provide Tk450 crore from a revolving fund created under a government stimulus package and its own sources to help navigate the challenges of the pandemic. Under the plan, small and medium entrepreneurs can receive a minimum loan of Tk1 lakh and a maximum of Tk25 lakh. However, for the purchase of capital machinery, entrepreneurs can receive a maximum loan of Tk50 lakh.

Source: https://www.tbsnews.net/economy/sme-foundation-extends-low-cost-funds-small-and-medium-entrepreneurs-874906

Bankers can now go abroad for important official purposes

From now on, bank officials can travel abroad to participate in business meetings with foreign banks and attend meetings crucial for official work. The central bank issued a circular on 11 June, 2024 slightly relaxing the policy for bank officials travelling abroad. However, officials must obtain permission from the appropriate authorities at their banks for such travel. In 2022, the Bangladesh Bank restricted bank officials from going abroad to reduce dollar spending.

Source: https://www.tbsnews.net/economy/banking/bankers-can-now-go-abroad-important-official-purposes-874771