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Bangladesh Development UpdateWeak exports and investments resulting from the impact of the euro-area crisis, domestic supply constraints, and intensified strikes and unrests underpin the growth slowdown. Strong remittances and robust service sector performance are expected to help maintain growth at a still healthy level. Increasingly fragile political stability does not bode well for revival of investment needed to accelerate growth. A broad-based declining inflation trend appears to be gaining ground. Average (twelve-monthly-moving) inflation has declined steadily over the past ten months, from a peak of nearly 11 percent in February 2012 to 8 percent in March 2013, reflecting declines in both food and non-food inflation. Favorable international commodity prices, a stable exchange rate and monetary tightening contributed to lowering inflation.
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Bangladesh Development Update, April 2014Bangladesh moved closer to achieving the
 sixth five year plan target of reducing extreme poverty to
 22.5 percent by 2015 as it sustained healthy gross domestic
 product (GDP) growth and moderate single digit inflation in
 FY2014. However, growth this year slowed relative to last
 year with declining remittances and losses due to political
 turmoil. Sound macroeconomic management kept inflation in
 check, although it increased somewhat due to the one-off
 effects of supply disruptions and wage increases. Official
 foreign exchange reserves increased to an adequate level as
 Bangladesh Bank intervened to keep the exchange rate stable.
 Weak demand for credit reduced interest rates. Monetary
 policy remained prudent while fiscal management challenged
 by shortfall in tax revenue, demand for support from sectors
 adversely affected by the political turmoil, and
 under-utilization of development budget. The fund's
 extended credit facility (ECF) is on track. Immediate
 challenges are to boost investments in power and roads;
 manage the transition in readymade garments; and stem the
 decline in remittances.
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India Economic Update, December 2010The Indian economy recovered from the
 slowdown at the time of the global financial crisis with
 strong Gross Domestic Product (GDP) growth, in particular
 over the first half of FY2010-11. The agricultural sector
 bounced back strongly after the 2010 monsoon brought normal
 levels of rainfall, and the industrial sector registered
 double-digit growth for three consecutive quarters.
 Inflation came down to 7.5 percent in November but then
 accelerated again to 8.4 percent in December because of a
 renewed food supply shock. The current account deficit in
 FY2009-10 was the largest ever (in US$ terms) and the
 monthly deficit widened further during the first half of
 FY2010-11, but the trend then reversed with import growth
 slowing and export growth accelerating in September-December
 2010. With the significant inflation differential between
 India and its trading partners, the rupees real effective
 exchange rate (REER) strengthened. On the fiscal side,
 massive windfall revenue from wireless spectrum auctions and
 buoyant tax revenue are likely to be offset by two
 supplementary spending bills. Monetary policy tightening
 continued with increases in policy rates. This update also
 discusses several medium-term issues: the link between the
 real exchange rate and growth, a long-term look at
 education, demographics and growth, the challenges facing
 the introduction of the Goods and Services Tax (GST), and
 the mid-term evaluation of the eleventh development plan. On
 the real exchange rate, economists have pointed out that the
 most successful emerging market economies have maintained an
 undervalued exchange rate to promote exports. In India, the
 real exchange rate has been broadly stable since the early
 1990s, and the International Monetary Fund (IMF) judges it
 fairly valued with respect to different measures of
 equilibrium. However, the growing trade deficit and a large
 fiscal deficit do not quite fit this picture. Discussing
 policies, we argue that it would be best to focus on
 policies that increase productivity and competitiveness.