Private sector’s appetite for credit craters
Private sector credit growth dropped to the lowest since 2008 in December last year, in continuation of its downward trend of the previous 21 months. In December last year, the year-on-year credit growth stood at 9.83 percent, down from 9.87 percent from one month earlier, according to Bangladesh Bank data, which goes as far back as 2008. As of January 15, the government borrowed Tk 50,842 crore from the banking sector, exceeding its annual limit of Tk 47,364 crore for fiscal 2019-20. The large revenue shortfall has compelled the government to borrow so heavily from banks. As per the National Board of Revenue’s provisional data, it logged in Tk 105,161 crore in collections for the first half of the fiscal year, up 7.3 per cent year-on-year. The sum missed the periodic target by Tk 31,507 crore. The central has recently been forced to revise its key monetary and credit programmes, setting a fresh government sector credit growth of 37.7 per cent for fiscal 2019-20. In July last year, it had set the target of 24.3 per cent. Rising defaulted loans is another reason behind the declining private sector credit growth. In the first nine month of 2019, defaulted loans increased 23.82 per cent to Tk 116,288 crore. The global economy has been facing some sort of crisis for the last few months, which has hit the domestic economy adversely. The heavy government borrowing from banks and the 9-6 per cent bounds will give a signal to banks to disburse loans carefully.
Widening job market a challenging prospect
The government’s target to create 1.13 crore new jobs in the next five years does pose a significant challenge, despite the country’s high economic growth rate, according to a revised five-year plan from the planning ministry. The planning ministry will highlight their goal to inflate the job market in today’s session of the Bangladesh Development Forum, currently taking place at Bangabandhu International Conference Centre in Dhaka. Bangladesh’s tremendous economic growth has disproportionately failed to create job opportunities over the past decade, raising questions on the actual significance of economic growth for a chunk of the population. Besides, female participation in the labour market has shrivelled, especially in rural areas, in the last nine years, according to a government study on employment, productivity and sectoral investment. In the eighth draft of their five-year plan, the planning ministry said about 20-22 lakh new jobs will be created each year from fiscal 2020-21 to 2024-25. Over this course, the unemployment rate will hold at 3.1 per cent instead of the previous 4.2 per cent, according to the Bangladesh Bureau of Statistics’ 2016-17 survey. The country’s gross domestic product (GDP) rate will hit 8.23 per cent in fiscal 2020-21 and will further increase up to 8.51 per cent in fiscal 2024-25, according to the draft. To help materialise their plans, the government will require Tk 7,741,800 crore in investments in the next five years, around 75 per cent of which will come from the private sector while the rest will be publicly funded. The government aims to increase revenue collection to 16.21 per cent of the total GDP in fiscal year 2025, which is currently at 10.6 per cent higher in the current fiscal year. Tax revenue will also be increased to 14.2 per cent in fiscal year 2025, which is 9.3 per cent in the current fiscal year.
Tenure extension raises cost by 92pc
The government yesterday extended the tenure of a water supply project by three years increasing its cost by more than 92 per cent. The Tk 1,036-crore Bhandal Juri Water Supply Project will now cost Tk 1,995 crore, of which Tk 889 crore will come from Korea and the rest from the government. The new deadline of the project is June 2023, according to a decision taken at a meeting of the Executive Committee of the National Economic Council (Ecnec) held at the NEC auditorium in Dhaka. In the meeting, the planning ministry gave reasons why the project cost and deadline needed revision. The taxes to be paid by the contractors were not included in the original project cost, but now the government will have to bear Tk 291 crore more for the purpose. In the main project plan, the exchange rate of the US dollar was shown at Tk 77.8, which increased to Tk 85 in recent times. This has also raised the project cost. The Ecnec also approved a Tk 793-crore dredging project for the Mongla channel to be completed in June 2022.
Shahjalal Islami Bank gets new DMD
Nasim Sekander has recently been promoted to the post of deputy managing director of Shahjalal Islami Bank. He also served the bank as the senior executive vice president, according to a statement. Sekander started his banking career at United Commercial Bank in 1988 Sekander also worked at the National Credit and Commerce Bank, Prime Bank and Southeast Bank.
Grameenphone gets new CMO
Grameenphone yesterday announced appointing Sajjad Hasib as its new chief marketing officer (CMO), effective from February 1. Previously a senior director and head of operations, Hasib is taking over from Yasir Azman, who will be undertaking the role of CEO, the country’s leading mobile operator said in a statement.
BASIS software expo starts Feb 6
The Bangladesh Association of Software and Information Services (BASIS) is going to organise a four-day exposition on the local software market at International Convention City Bashundhara from February 6. President Md Abdul Hamid will inaugurate the event — BASIS SoftExpo — where about 300 exhibitors will showcase their products in presence of top ICT companies, personalities, key policymakers, industry leaders and other stakeholders. There will be 10 individual zones, such as an Industry 4.0 Zone and an Experience Zone, highlighting the growth and development of Bangladesh’s ICT sector, said Mushfiqur Rahman, convener of the expo and a vice president of the association. The others will focus on VAT, digital education, fintech, software, mobile innovation, digital commerce and IT-enabled services, and business process outsourcing or BPO. An ICT career camp will also be held with over 2,000 students from more than 45 universities showcasing their innovative projects.
Local and Global Stock Indices *
|Index Name||Close Value||Value Change||Percentage Change|
|DSEX||4,510.77044||↑ 17.75||↑ 0.39 %|
|↑ 187.05||↑ 0.66 %|
|FTSE100||7,480.69||↑ 68.64||↑ 0.93 %|
|Nikkei 225||23,355.47||↑ 139.76||↑ 0.60 %|
World Commodities *
|Commodity||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)||$ 54.21||↑ 0.73||↑ 1.37 %|
|Crude Oil (Brent)||$ 60.31||↑ 0.80||↑ 1.34 %|
|Gold Spot||$ 1,564.78||↓ 2.39||↓ 0.15 %|
Major Currencies Exchange Rates Movement in Last Seven Days *
|USD 1||BDT 83.2473|
|GBP 1||BDT 108.414|
|EUR 1||BDT 91.6964|
|INR 1||BDT 1.16691|
*CURRENCIES AND COMMODITIES ARE TAKEN FROM BLOOMBERG.<