We think this will be very helpful for us in our professional life. By this term paper we could able to understand and also we know about economic condition of Bangladesh. Again, we want to give thanks to you for teaching us about this subject and always- outstanding cooperation with us. Sincerely yours, Batch: 36th Finance B Acknowledgment At first we want to give thanks to our Almighty God for completing the assignment. After that, we are grateful to our honorable course instructor Dry. Shamans Islam Latin sir , for giving us a wonderful term paper. By this term paper, we have known about economic condition of Bangladesh.
Which will be helpful for our personal life as well as professional life? Really, we are grateful to you. Here we the students of the course-“Microeconomics” Course code-“ABA 1204” and also promising with emphasize that we could not involve in any plagiarism nor did not take any unfair mean for. Really, we are grateful to the following person: 1. Dry. Shamans Islam Latin The overall economic condition of Bangladesh The current issue of Bangladesh Economic Update focuses on the overall economic condition of Bangladesh particularly in the half way of FYI 2011-12.
The issue investigates the sector-wise performance of current fiscal year in light with the targets set in national budget of FYI 2011-12, Medium Term Macroeconomic Framework (MOTIF), Medium Term Budgetary Framework (MOTIF) and other national plans, policies and goals. The issue also tries to explore current implementation status and of Annual Development Programmer (ADAPT), and makes projection thereof. 2. MACROECONOMIC SCENARIO GAP In FYI 2010-11, the total amount of GAP in terms of take was 7874. 95 billion (in current market price) in which TX. 1403. 81 billion came from agricultural sector, TX. 2174. Billion from industrial sector and TX. 4037. 92 billion from service sector. The target of GAP in FYI 2011-12 is TX. 8996. 70 billion in which the contribution of agricultural sector is projected to be TX. 1506. 87 billion, while industrial and service sector might contribute TX. 2351. 10 billion and TX. 436064 million respectively. GAP Growth The government has targeted to achieve the GAP growth rate of seven percent in FYI 2011-12 based on assumptions of further improvements in the global and domestic economy and taking into account the expected impacts of reforms initiated in various sectors.
In FYI 2011-12, according to business usual scenario, the growth rate of GAP might be at 6. 82 percent but the MOTIF projection is seven percent. The gap between business as usual scenario and MOTIF projection might be 18 percentage point. In FYI 2010-11, the growth rate of GAP was 6. 66 percent that was 59 percentage points more than that of the previous fiscal year. However, in FYI 2011-12, the growth rate of GAP might be 6. 82 percent that is only 16 percentage points more than that of the previous fiscal year.
Savings and Investment The target of the government is to stimulate GAP growth rate at 8 percent by 2013 here the share of investment to GAP is required at 35-40 percent. GAP growth rate was 6. 66 percent in FYI 2010-11 with 28. 40 percent of savings and 24. 73 percent of investment. In FYI 2011-12, the targeted GAP growth rate is seven percent, whereas savings as percentage of GAP and investment as percentage of GAP is targeted at 28. 90 and 24. 86 percent respective Inflation Rate For achieving the targeted GAP growth rate, containing the rate of inflation at a tolerable limit is a prerequisite.
In FYI 2011-12, the government has targeted the rate of inflation at 7. 5 percent while it was 8. Percent in FYI 2010-11 and 7. 31 percent in FYI 2009-10. In November 2011, general inflation rate is 10. 51 percent while it was 8. 14 percent in November 2010. In FYI 2001-02, the rate of general inflation (12-month average) was 2. 79 percent and point-to-point was 3. 58 percent while consumer price index (ICP) was at 130. 26. The rate of inflation continued to increase further in the next fiscal years. In FYI 2007-08, the rate of Trade Balance general inflation (12-month average) was higher at 9. 4 percent and the rate of point- to-point inflation was 10. 04 percent. But in FYI 2008-09, the rate of point to point inflation followed a huge decline and dropped down to 2. 25 percent as well as general inflation declined to 6. 66 percent. Ely Import and Export An increasing trend has been observed in import payments and export earnings over the years. In FYI 2011-12, import payments and export earnings are estimated by the government at USED 35400 million and 25700 million respectively. However, in 2010-11, import payments was USED 33660 million and export earnings was USED 22930 million.
Budget Deficit In FYI 2011-12, total revenue and foreign grants is estimated at TX. 1233. 23 billion that s 24 percent higher than that of the previous fiscal year in which total revenue is TX. 1183. 85 billion and foreign grants is TX. 89. 38 billion. The government has estimated total revenue collection at TX. 1183. 85 billion in FYI 2011-12 against TX. 951. 87 billion of the revised budget of FYI 2010-11. The tax collection from N.B. sources is estimated at TX. 918. 7 billion in FYI 2011-12 that is about 21. 52 percent higher than that of the collection of the previous fiscal year.
Government Domestic Borrowing (net) Continuation of current trend might result into an increasing movement in domestic debt. Total estimation of government borrowing from domestic sources in FYI 2011-12 is TX. 272. 08 billion which is 23. 26 percent higher than that of FYI 2010-11 and 275. 47 percent higher than that of FYI 2001-02. In FYI 2011-12, the government has estimated to borrow 68 percent higher from banking sectors in comparison to that of FYI 2008-09 indicating a sharp crowding out effect which has dampened private investments.
The government borrowing from banking sector in FYI 2011-12 (up to September, 2011) is TX. 72. 28 billion which is 0. Percent of GAP. Government borrowing from the banking system outstanding as on 30 September 2011 is TX. 806. 65 billion which was TX. 768. 25 billion outstanding as on 31 August 2011. The government borrowing from non-banking sector in FYI 2011-12 Lully to September, 2011) is TX. 10. O billion that was TX. 17. 410 billion in FYI 2010-11. Government domestic borrowing from banking sector in FYI 2011-12 Lully-September, 2011) is 622. 57 percent higher than borrowing from non-banking sector.
Principal and Interest Payment Total payment in April 2011 amounts USED 744 million in which USED 588 million was ironical payment and USED 157 million was interest payment. Both principal and interest payment have risen at a much higher rate during the sass. In FYI 2001-02, the principal and interest payments were USED 435 million and USED 151 million respectively. Under the business as usual scenario, in FYI 2011-12, total payments might stand at USED 923. 71 million, which is 3 percent higher than that of the previous fiscal year. In the current fiscal year, principle payments might reach at USED 705. 5 million and interest payment at USED 191. 54 million, which are 80 and 20 percent of total payment. Net Foreign Aid Flow Total aid disbursements during July-October of FYI 2011-12 stood at USED 340. 86 million compared to USED 443. 25 million of the same period of FYI 2010-11. In addition, net foreign aid receipts during July-October of FYI 2011-12 also stood lower at USED 80. 54 million, against USED 216. 47 million during July-October of FYI 2010-11. In FYI 2010-11, total foreign aid amounts USED 1,777. 33 million, which was USED 387. 12 million less than that of the previous fiscal year.
Total foreign aid might reach at USED 1800. 565 million by the end of the current fiscal year that is only 1 percent higher than that of FYI 2010-11. Public Finance Balance In the budget of FYI 2011-12, the government has targeted to collect total revenue of TX. 1183. 85 billion which is 13 percent of the total GAP.
Remittance The receipt of remittances during July-November 2011 is USED 4927. 74 million which is USED 346. 31 million or 7 percent higher than that of the same period of FYI 2010-11 while the amount of total receipt of remittance was USED 4581. 43 million in that year. Number of Persons Left for Abroad on Employment and Total Workers Remittance
Therefore, it is evident that the trend of employment opportunities has been following a decreasing trend during the last few years which has resulted from the decreasing investment scenario. Conclusion In the long run after taking into account the economic situation of Bangladesh the government has targeted to achieve the GAP growth rate of 7 percent in FYI 2011-12 based on assumptions of further improvements in the global and domestic economy and taking into account the expected impacts of reforms initiated in various sectors.