Bangladesh GDP growth 2nd-best in South Asia
The World Bank yesterday upgraded Bangladesh’s GDP growth forecast for this fiscal year by 2 percentage points to 3.6 percent, making it the second best-performing economy in South Asia behind the Maldives. In fiscal 2020-21, neighbouring India’s economy is forecasted to contract by 7.3 percent, while Pakistan will register a GDP growth of 1.3 percent, according to the latest version of the Washington-based multilateral lender’s flagship publication ‘Global Economic Prospects’, which was released on Tuesday.The improved WB’s GDP growth forecast for this fiscal year is still lower than the government’s target of 6.1 percent, which is closer to the Asian Development Bank’s forecast of 5.5-6 percent.Subsequently, the Bangladesh economy is forecasted to grow at 5.1 percent in the next fiscal year that begins in July — up by 1.7 percentage points from its forecast earlier in January but once again lower than the government’s target of 7.2 percent.In fiscal 2022-23, Bangladesh’s GDP is forecasted to grow at 6.2 percent, behind India and the Maldives in South Asia. Per capita income losses will not be unwound by 2022 for about two-thirds of emerging market and developing economies. Among low-income economies, where vaccination has lagged, the effects of the pandemic have reversed poverty reduction gains and aggravated insecurity and other long-standing challenges.
BB buys record $7.7b to keep taka stable
The central bank purchased $7.68 billion from the banking system in the first 11 months of the current fiscal year, the highest on record, to contain any abnormal appreciation of the local currency. The previous highest was posted in 2013-14 when Bangladesh Bank bought $5.15 billion.The US dollar purchase is helping the export sector as local products become cheaper in foreign markets. It is also swelling the foreign exchange reserves. But it has flooded the financial sector with excess liquidity. But a lower credit demand has adversely impacted the cost of funds for banks as liquidity has largely remained idle. The excess liquidity in the banking industry stood at around Tk 200,000 crore in April.The interbank exchange rate has been hovering around Tk 84.80 per USD since July. The rate was Tk 84.95 on June 2 last year. Had the central bank had not intervened in the exchange market, local currency would have appreciated.Between July and May, Bangladesh received $22.8 billion in remittance, already the highest in a single year. The pile-up of US dollars will help the country to a large extent when imports start picking up. Foreign reserves stood at $45.08 billion on June 2, up 34.70 per cent year-on-year.
Standard Chartered ‘Best International Bank’
Standard Chartered Bank Bangladesh said to have been recently recognised as “Best International Bank” at FinanceAsia Awards 2021. This is the 11th time the bank has been recognised since 2009 while the fifth major international award in the first quarter of 2021. “As the longest-serving financial institution of Bangladesh, we have a unique perspective on the amazing growth story of Bangladesh,” said NaserEzazBijoy, chief executive officer, Standard Chartered Bangladesh. “After a decade of stellar progress, this is the time for Bangladesh to embark on the next phase of its journey of progress and prosperity,” he said. In 2020, the bank secured 25 major international awards.
How IPDC outperforms market competitors during pandemic
IPDC Finance Limited, a non-bank financial institution, has experienced the highest business growth even at the pandemic time, through lending to small ventures that are usually turned down by most lenders. The company posted a 36.61% hike in its net profit in the January-March quarter – the highest in the last six years. Not only in quarterly performance, but the IPDC has also outperformed its market competitors, such as IDLC Finance Limited, Lanka Bangla Finance and Delta Brac Housing Finance Corporation, in terms of deposit, credit, and profitability since 2015. Over the last six years, the IPDC’s annual profit grew by 24%, while the IDLC registered a 12% growth, the DBH 5.4% and Lanka Bangla negative 4.3% during the same period, according to a detailed analysis of the IPDC. The introduction of a new business concept – supply chain financing to small businesses by collaborating with corporates – helped the company achieve high growth, said Mominul Islam, managing director of the IPDC.Small suppliers and retailers are getting loans at 9% interest like corporates under the financial product, the IPDC managing director said. Default loan is zero in supply chain finance as suppliers and distributors are involved in businesses with corporates. If they fail, they will lose business. The total deposits of IPDC stood at Tk4,192 crore at the end of March this year.