Credit growth exceeds MPS target
Private sector credit growth rose sharply to 14.8% in the first month of current year surpassing the three year’s high of 14.2% growth achieved in December last. The new height of growth touches the credit ceiling of 14.8% set for June in the latest Monetary Policy Statement (MPS) of January-June this year. The net credit at private sector stood at BDT 6,205.0 billion in January against the ceiling of BDT 6,184.0 billion set for the month in monetary policy. The total credit rose by BDT 166.0 billion during the first month of current year from BDT 6,039.0 billion in December last year. Bangladesh Bank is not concerned about the sharp rise of private sector credit growth as public sector credit growth is still far below its target, said Allah Malik Kazemi, change management adviser to the central bank. He said though the private sector credit growth already reached the target set for June, it will not put pressure on inflation until public sector credit growth crosses the ceiling of monetary program. He assumed that the rise in credit growth will continue as economy started to move forward.
Green Delta, BD Venture to raise BDT 2.5 billion
Green Delta Capital and BD Venture Wednesday signed an agreement for raising a fund worth up to BDT 2.5 billion to facilitate fund arrangements for the prospective firms. This is the first initiative to facilitate the firms, which require fund support at early stage, after the securities regulator formulated rules for venture financing in June, 2015. Md. Rafiqul Islam, managing director and CEO of Green Delta Capital, and Shawkat Hossain, managing director and CEO of BD Venture, signed the agreement on behalf of their respective organizations. Nasir A Chowdhury, advisor and founding managing director of Green Delta Insurance, Farzana Chowdhury, managing director and CEO of Green Delta Insurance, Mohammed Nasir Uddin Chowdhiry, chairman of BD Venture, among others, were present at the signing ceremony held at the capital. As per the agreement, Green Delta Capital will act as ‘Mandated Arranger and Book Runner’ for the BD Venture to raise a fund worth up to BDT 2.5 billion. The initial target of the companies is to raise a fund worth BDT 1.5 billion.
Major nationwide Electronic Money Transfer Services (EMTS) expansion underway
The government will expand electronic money transfer services to the union level by May, considering the growing demand, a top postal official said. The official said the Directorate of Bangladesh Post Office (BPO) will appoint thousands of agents for implementing the services, known as EMTS, in every union of the country. All the retailers of Banglalink along with post-e centres and post offices will also provide the EMTS. “We hope to expand this service (EMTS) every nook and corner of the country. This may take three months,” Deputy Postmaster General of BPO Md Zakir Hasan Nur told the FE. The EMTS now covers districts, upazila and some busy post offices in rural locations. Initially, the BPO will appoint 5,000 to 10,000 agents, mostly unemployed youths, for running the EMTS, he added. In response to the growing popularity of the electronic money transfer services (EMTS), the BPO slashed the service charge to BDT 15 from BDT 27 for sending BDT 1,000 from January 3, 2016. The online-money transfer market is flourishing in the country, which has inspired the postal authorities to appoint agents for expanding the EMTS services.
Remittances drop in 8 months
Remittance inflow decreased by 1.15% to USD 9.8 billion in eight months of the financial year of 2015-16 compared with that in the same period of FY15, according to the Bangladesh Bank data released on Wednesday. The remittance inflow figure was USD 9.9 billion in the July-February period of FY15. Experts said the fall might put an adverse impact on the country’s gross domestic product. Former interim administration adviser Mirza Azizul Islam told New Age on Wednesday that it was a matter of concern that the country’s inward remittance was on the decline for the last few months. He said, ‘The economies of Arabian countries, which are our main manpower export destinations, are now facing crisis that has put an adverse impact on the country’s inward remittance.’ Besides, an anti-immigration sentiment is building up in whole Europe, forcing Bangladeshi nationals to leave the countries of the continent, he said.
USD 200.0 billion economy club beckons Bangladesh this fiscal
Bangladesh economy broadens onto the brink of ‘two-hundred-billion club’ with the GDP, by government count, totaling USD 195.16 billion as of last financial year. Officials said Wednesday Bangladesh Bureau of Statistics (BBS) in its final calculations showed the size of the economy having grown by nearly USD 0.19 billion from its earlier provisional estimation of USD 194.87 billion. In the previous financial year (FY) 2013-14, the size of the country’s GDP (gross domestic product) was USD172 billion at current price. Meanwhile, although the total GDP size has inches to cross into the USD 200-billion mark, the gross national income (GNI) went past the graduation line with an “impressive” figure of USD 207.83 billion in the last FY2015. The state-run statistical department agency, measuring the major macroeconomic indicators, also puts per-capita income (per-capital GNI) at USD 1316.0 finally from its provisional estimation of USD 1314.0 for the last fiscal. BBS officials said when they received the final crop-production estimation and income of some service sectors, the total size of the GDP increased a little bit from its provisional figure, usually prepared based on the first three quarters’ data. The final count has shown that the economy grew at 6.55% rate in the last FY. The provisional one had shown a 6.51% growth earlier.
Eyes on next budget: outlay to get bigger
Finance Minister AMA Muhith is set to kick off his dialogue series with think-tanks, trade bodies, lawmakers and media on the forthcoming budget, tipped to be about BDT 3400.0 billion — about 15.0% higher than the current year’s. The first meeting is scheduled for today with the representatives of the Policy Research Institute, Economic Research Group and Bangladesh Institute of Development Studies and Bangladesh Economic Association at the NEC. Muhith will hold nine meetings until May on the budget. The Finance Division has already started work on this year’s revised budget and the budget for fiscal 2016-17, according to a finance ministry official. The National Board of Revenue and the planning ministry have also started their work on the budget formulation. In the next budget, a big chunk will be required for paying the salaries and allowances of public servants. In the current fiscal year, the public servants’ basic salaries were paid as per the new pay scale, but from next year their allowances will also have to be according to that system. An additional BDT 159.0 billion will be required in the current fiscal year for payment of their basic salaries, according to finance ministry data.
Top global denim maker considers investment
Top global denim maker considers investing in fabrics manufacturing, but the perceived infrastructure hurdles are dampening its interest. “There is a big potential in the denim sector as the country has to import more than half of its denim fabrics requirement,” Thomas Dislich, who heads up Asia and Europe regions at Brazil-based Vicunha Textile, told the FE. “We ourselves are very interested to invest in Bangladesh, but there are some hurdles which are not easy to overcome for a foreign investor,” he said. He noted that Bangladesh is positioning itself fast in the denim sector and the development is “noticeable”. Vicunha produces 18 million meters of denim yarn every month and sell to 40 countries. The global demand for denim fabric is 6.0 billion meters and 80% of this used for making pants. He, however, identified electricity, water and energy supplies as primary obstacles in setting up a factory.
World Stock and Commodities
|Index Name||Close Value||Value Change||Percentage Change|
|Crude Oil (WTI)*||$34.65||(0.01)||(0.03%)|
|Crude Oil (Brent)*||$36.86||(0.07)||(0.19%)|
|Dow Jones Industrial Average||16,899.32||34.24||0.20%|
|USD 1||BDT 78.50*|
|GBP 1||BDT 109.55*|
|EUR 1||BDT 85.29*|
|INR 1||BDT 1.16*|
*Currencies and Commodities are taken from Bloomberg.