Presentation on theme: "1 Selected Macroeconomic Indicators 29 August, 2012 Bangladesh Bank Monetary Policy Department."— Presentation transcript:
1 Selected Macroeconomic Indicators 29 August, 2012 Bangladesh Bank Monetary Policy Department
Greater stability but challenges remain… Exchange rate has stabilized in mid February and remained almost stable till to date due to higher remittances and aid, lower import pressures and close market monitoring by BB. Domestic liquidity pressures have eased reflected in a fall in the call money market rate from around 18% in February to 12.23% in August (upto 26 August)2012 because of BB’s prudent liquidity operation and monetary policy implementation. External sector indicators are smoothening gradually. Current Account balance is still in positive zone. Overall inflation is in downward trend, but non-food inflation remains a major policy concern. 2 Rabiul_MPD
3 Rabiul_MPD Broad Money(M2) (In crore taka) June 2011June 2012 440320.10 (+21.36) 516865.60 (+17.38) Broad money growth path has been around the program level reflecting a restrained monetary stance. Programme & actual development : Growth
4 Rabiul_MPD Domestic Credit (In crore taka) June 2011June 2012 430221.90 (+28.25) 513201.90 (+19.29) Year on year domestic credit growth remained more than 25 percent until December 2011 but became 19.3 percent in June 2012 which touched the program path. Programme & actual development : Growth
5 Rabiul_MPD Public sector credit Public sector credit growth in FY12 remained below the programme target because Govt. borrowed Tk.171billion which was less than the revised budgetary target of Tk.291.0 billion for FY12. Govt. start FY13 with a repayment of loan, as a result, credit to Govt.(net) stood at Tk.-16.53 billion in 31 st July 2012 against the credit of Tk.19.16 billion of the corresponding time of FY12. Programme & actual development : Growth
6 Rabiul_MPD Private Sector Credit (In crore taka) June 2011June 2012 340712.70 (+25.84) 407771.1 (+19.68) Programme & actual development : Growth Private sector credit growth in June 2012 was higher than May 2012, but it is well below the growth rate of June 2011.
7 Rabiul_MPD CPI inflation (Base : FY96=100) CPI inflation at national level (Base : FY96=100) June 2011July 2011June 2012July 2012 On Average Basis8.809.1110.6210.37 On Point to Point Basis10.1710.968.568.03 The annual average rate of inflation (12-month annual average) and the rate of inflation on point to point decreased in July 2012. Both measures of inflation declined due to slowing down of food inflation for the last few months.
Headline and Food CPI inflation (p to p) are already in single digits, non–food CPI inflation (p to p) is also on declining trend since April 2012. CPI inflation (Base : FY96=100) 8 Rabiul_MPD
Interbank Call Money Rates 9 Rabiul_MPD Domestic liquidity pressure have eased reflected in a fall in the call money rate from around 18 % in February to 10.58% in July 2012 showing prudent liquidity management by BB.
Interest rates spread 10 Rabiul_MPD Interest rate spread remained widened slightly to 5.6% in June 2012 after 3 months of continuous fall.
11 Rabiul_MPD Public Finance : NBR Tax Revenue During FY12 NBR has collected revenue of Tk.94457.37crore which is 18.96 percent higher than the tax received over FY11 and 2.8 percent above the annual target for FY12.
12 Rabiul_MPD Public Finance: NSD certificates (In crore taka) July-June, 2010-11June 2011July-June, 2011-12June, 2012 Net sale2056.90-386.10479.02-98.33 Outstanding63438.32 63917.34 Government borrowed less through NSD certificates in June 2012.
14 Rabiul_MPD Sectors/Commodities July-June, 2010-11 July-June, 2011-12% changes A. Consumer goods 4934.294243.27-14.00 B. Intermediate goods 2785.733342.7520.00 C. Industrial raw materials 15033.3014455.40-3.84 D. Capital machinery 2778.822189.04-21.22 E. Machinery for misc.industry 3192.703653.6614.44 F. Petroleum & petro.products 3085.454671.2551.40 G. Others 6772.064480.45-33.84 Total 38582.3537035.82-4.01 ( In Million US$) LC opening for petroleum & petro. products registered the highest y-o-y growth (51.40%) during July-June, 2012 due to sharp increase in import for power plants Largest decline in LC opening was in capital machinery (-21.22%) followed by consumer goods(-14.00%).
15 Rabiul_MPD Export Shipments (In Million US$) July-June 2010-11July 2011July-June 2011-12July 2012 22928.22 (+41.49) 2339.52 (+28.63) 24287.66 (+5.93) 2439.08 (+4.26) Export growth slowed to single digit (5.93%) in FY12. Except of few, all the export items registered positive growth in FY2012 with some high value items including woven garments and leather.
Movement of Taka and Indian Rupee against US$ 16 Rabiul_MPD Exchange rate has stabilized since mid February 2012. Taka looks more stable than the Indian rupee in recent time.
17 Rabiul_MPD Remittances (In Million US$) Jul.-June 2010-11July 2011Jul.-June, 2011-12July 2012 11650.32 (+6.03) 1015.58 (+18.46) 12843.42 (+10.24) 1193.77 (+17.55) Remittance receipts during FY12 increased by 10.24 percent compared to the same period of FY11. Remittance in July 2012 increased by 17.6 percent riding on the upcoming Eid festival.
18 Rabiul_MPD FOREX Reserves of BB (Million US$) June 2011July 2011June 2012July 2012 10911.5510381.2610364.4310569.76 The gross foreign exchange reserves, without ACU liability is equivalent to 3.45 months import cover based on the preceding 12 months import payments average.
Items July-May, 2010-11 R July-May, 2011-12 P Trade balance -7498-7957 Services -2200-2374 Primary Income -1290-1452 Secondary Income 1135312537 Current account balance 365754 Capital account 443429 Capital transfers 443429 Financial account -1853-641 i) Foreign direct investment(net) 7031061 ii) Portfolio investment(net) -22157 iii) Other investment(net) -2534-1859 MLT loans 9011236 MLT amortization payments 665728 Errors and omissions 298-531 Overall balance -74711 Reserve assets 747-11 Bangladesh Bank(net) 747-11 Assets -967-545 Liabilities -220-556 Balance of Payment (BoP) 19 Rabiul_MPD (In million US$)
Balance of Payment (BoP) contd.. Trade deficit increased to USD7957 million during July-May, FY12 compared to the deficit of USD7498 million during the same period of FY11. Due to a increased inflow of workers remittances the current account balance recorded a surplus of USD754 million during the first eleven months of FY12. Despite a financial account deficit of USD641 million, a capital account surplus of USD429 million and a current account surplus resulted in a surplus of USD11 million in overall balance during July-May, 2011-12. 20 Rabiul_MPD
Looking ahead Inflation is expected to ease in coming months aided by the reasonable price of food in the international markets, and expected successive good production of food grains along with high level of stock holding. In parallel, restrained monetary stance will continue until average inflation is in single digits; As public sector credit growth declined sharply, there is scope for increasing private sector credit growth for productive investment. BB has already ensured liquidity support for banks, so that productive credit growth is not crowded out; 21 Rabiul_MPD
Looking ahead contd.. Remittance inflow is expected to maintain growth as out-of- country jobs for Bangladeshi workers increased in recent time; The Govt.’s expected release of Sovereign Bond & increased the rate of interest on existing Wage Earners’ Development Bonds. These steps will improve BOP situation as well as investment scenario. BB is going to be started road shows to encourage the expatriate Bangladeshi to send home more money. The road shows will also display bonds meant for Non -resident Bangladeshi (NRBs). 22 Rabiul_MPD