Greater reliance on fiscal policy
Tuesday, 25 August 2009
Continued from page 9
review period.
This was facilitated by relatively favorable weather conditions as well as productivity support programmes coordinated by the Ministry of Agriculture.
Growth in the agriculture sector was reflected in an increase of 8.11 percent in primary commodities exports, (mainly raw jute) compared to 3.12 percent increase recorded in the corresponding quarter of FY2008. However, domestic market oriented agriculture production registered a slower expansion in the review quarter.
According to the provisional data, agricultural output in the whole of FY2009 displayed a 5.1 percent growth compared to 2.7 percent in FY08. Yields of rice crop increased significantly while the increase in fish production marginally decelerated to 4.0 percent in FY09 from 4.2 percent in FY08, Against the actual production of 29.77 million MT of rice in 2007-08, the production of Aus for 2008-09 has been estimated by BBS at 1.89 million MT and that of Aman at 11.61 million MT.
According to the latest available data, industrial production grew by 6.8 percent in Q3FY09 (January-February), higher than 4.8 per cent growth in Q2FY09. There is, however, no signal as yet that the upward trend continued in industry in the review quarter, i.e., Q4FY09.
The manufacturing QIP grew by 6.8 per cent in January-February, Q3FY09, compared to 4.5 per cent in Q2FY09.
Classification of industry by export ratios reveals that the production of Woven garment, Knitwear, footwear and terry towels displayed a positive growth in Q4FY09 while the growth in petroleum by-products, chemical products, leather, textile fabrics, home textiles, and ceramic products significantly decelerated from the robust growth witnessed in the same quarter of the previous fiscal.
The growth rate of electricity production was slightly higher at 7.9 percent in Q3FY09 compared to 7.5 percent in Q2FY09, but the mining sector growth decelerated from 9.2 percent to 4.8 percent in Q3FY09.
Data on industrial term lending is not available beyond the third quarter of FY09. Available statistics shows that the disbursement of industrial term loans during Q3FY09 was Tk.42.34 billion, which was 6.1 percent higher than that in Q2FY09.
In Q2FY09, the disbursement of industrial term loan was Tk.39.90 billion and the recovery was Tk.29.85 billion. In Q3FY08 the disbursement was Tk.49.10 billion.
The rate of collection of tax revenue slowed down significantly in the review quarter.
In Q4FY09, total tax collection (NBR portion) grew by 6.5 percent compared to 10.7 percent in Q3FY09 and 33.1 percent in Q4FY08. The lower growth in revenue collection was largely due to the decline in import-related revenues.
Revenue collection from customs duties registered a negative growth, while the growth of revenues from domestic VAT, income tax and non-NBR sources decelerated considerably, reflecting a slowdown in overall economic activity.
Total budget financing of the government through borrowing was Tk.176.57 billion during July-April FY09, which is 88 percent of the total target (revised) of Tk.200.31 billion for the entire fiscal year.
Outstanding domestic debt of the Government at the end of April 2009 increased by Tk.167.58 billion to Tk.1050.38 billion, or by 19.0 per cent over April 2008. Some 52.4 percent of this domestic debt was in the form of borrowing from the banking sector and the rest was borrowed from non-bank sources.
On the external front, export earnings in April-June of Q4FY09 contracted by 0.6 percent from the same period last year, following a slowdown in trading partners' economies. Exports contracted in almost all categories of goods other than woven & knit garments in manufacturing sector, and in some primary agricultural products including raw jute.
After experiencing an expansion of 6 percent in the previous quarter, exports contracted by 0.6 percent in the quarter under review. In the same period of the previous year, the export sector experienced a 25.6 per cent growth.
Total import payments further contracted by 11.4 percent in April-May of Q4FY09 from the corresponding period of the previous year after 4.8 percent contraction in Q3FY09. Declines occurred in all major imports, viz., industrial raw materials, capital goods, intermediate goods, and fuels, reflecting partly a fall in global prices but mainly a slowing down of domestic economic activity.
The deficit in commodity trade balance in April-May 2009 was 658 million US dollars as against 1083 million US dollars in April-May 2008. The balance of services trade recorded a deficit of $226 million in the review period compared to the deficit of $301 million in the corresponding period of fiscal 2008.
In the quarter under review, the growth of inward remittances stabilized at a low level after falling sharply in the previous quarter due to weak global economic conditions. The growth rate of remittance was 17.2 percent in the Q4FY09 compared 14.5 percent in the previous quarter.
The foreign exchange market remained relatively stable throughout the review period. The stability in the market was underpinned by the growth in receipts from remittances, as well as lower demand for foreign currency for purpose of imports. There were also other favourable developments in the market during the quarter, principally associated with an increase in net private capital inflows.
Average inflation rate in the review quarter was 7.2 percent compared to 8.1 percent in the preceding quarter, and 9.9 percent in the Q4FY2008. On point to point basis, the inflation rate in June was only 2.2 percent compared to 5.0 percent in March 2009 and 10.0 percent in June 2008. The overall fall in the inflation in the review period was caused by the significantly low month-on-month price growth in June (2.25 percent as against 10.04 percent in June 2008).
review period.
This was facilitated by relatively favorable weather conditions as well as productivity support programmes coordinated by the Ministry of Agriculture.
Growth in the agriculture sector was reflected in an increase of 8.11 percent in primary commodities exports, (mainly raw jute) compared to 3.12 percent increase recorded in the corresponding quarter of FY2008. However, domestic market oriented agriculture production registered a slower expansion in the review quarter.
According to the provisional data, agricultural output in the whole of FY2009 displayed a 5.1 percent growth compared to 2.7 percent in FY08. Yields of rice crop increased significantly while the increase in fish production marginally decelerated to 4.0 percent in FY09 from 4.2 percent in FY08, Against the actual production of 29.77 million MT of rice in 2007-08, the production of Aus for 2008-09 has been estimated by BBS at 1.89 million MT and that of Aman at 11.61 million MT.
According to the latest available data, industrial production grew by 6.8 percent in Q3FY09 (January-February), higher than 4.8 per cent growth in Q2FY09. There is, however, no signal as yet that the upward trend continued in industry in the review quarter, i.e., Q4FY09.
The manufacturing QIP grew by 6.8 per cent in January-February, Q3FY09, compared to 4.5 per cent in Q2FY09.
Classification of industry by export ratios reveals that the production of Woven garment, Knitwear, footwear and terry towels displayed a positive growth in Q4FY09 while the growth in petroleum by-products, chemical products, leather, textile fabrics, home textiles, and ceramic products significantly decelerated from the robust growth witnessed in the same quarter of the previous fiscal.
The growth rate of electricity production was slightly higher at 7.9 percent in Q3FY09 compared to 7.5 percent in Q2FY09, but the mining sector growth decelerated from 9.2 percent to 4.8 percent in Q3FY09.
Data on industrial term lending is not available beyond the third quarter of FY09. Available statistics shows that the disbursement of industrial term loans during Q3FY09 was Tk.42.34 billion, which was 6.1 percent higher than that in Q2FY09.
In Q2FY09, the disbursement of industrial term loan was Tk.39.90 billion and the recovery was Tk.29.85 billion. In Q3FY08 the disbursement was Tk.49.10 billion.
The rate of collection of tax revenue slowed down significantly in the review quarter.
In Q4FY09, total tax collection (NBR portion) grew by 6.5 percent compared to 10.7 percent in Q3FY09 and 33.1 percent in Q4FY08. The lower growth in revenue collection was largely due to the decline in import-related revenues.
Revenue collection from customs duties registered a negative growth, while the growth of revenues from domestic VAT, income tax and non-NBR sources decelerated considerably, reflecting a slowdown in overall economic activity.
Total budget financing of the government through borrowing was Tk.176.57 billion during July-April FY09, which is 88 percent of the total target (revised) of Tk.200.31 billion for the entire fiscal year.
Outstanding domestic debt of the Government at the end of April 2009 increased by Tk.167.58 billion to Tk.1050.38 billion, or by 19.0 per cent over April 2008. Some 52.4 percent of this domestic debt was in the form of borrowing from the banking sector and the rest was borrowed from non-bank sources.
On the external front, export earnings in April-June of Q4FY09 contracted by 0.6 percent from the same period last year, following a slowdown in trading partners' economies. Exports contracted in almost all categories of goods other than woven & knit garments in manufacturing sector, and in some primary agricultural products including raw jute.
After experiencing an expansion of 6 percent in the previous quarter, exports contracted by 0.6 percent in the quarter under review. In the same period of the previous year, the export sector experienced a 25.6 per cent growth.
Total import payments further contracted by 11.4 percent in April-May of Q4FY09 from the corresponding period of the previous year after 4.8 percent contraction in Q3FY09. Declines occurred in all major imports, viz., industrial raw materials, capital goods, intermediate goods, and fuels, reflecting partly a fall in global prices but mainly a slowing down of domestic economic activity.
The deficit in commodity trade balance in April-May 2009 was 658 million US dollars as against 1083 million US dollars in April-May 2008. The balance of services trade recorded a deficit of $226 million in the review period compared to the deficit of $301 million in the corresponding period of fiscal 2008.
In the quarter under review, the growth of inward remittances stabilized at a low level after falling sharply in the previous quarter due to weak global economic conditions. The growth rate of remittance was 17.2 percent in the Q4FY09 compared 14.5 percent in the previous quarter.
The foreign exchange market remained relatively stable throughout the review period. The stability in the market was underpinned by the growth in receipts from remittances, as well as lower demand for foreign currency for purpose of imports. There were also other favourable developments in the market during the quarter, principally associated with an increase in net private capital inflows.
Average inflation rate in the review quarter was 7.2 percent compared to 8.1 percent in the preceding quarter, and 9.9 percent in the Q4FY2008. On point to point basis, the inflation rate in June was only 2.2 percent compared to 5.0 percent in March 2009 and 10.0 percent in June 2008. The overall fall in the inflation in the review period was caused by the significantly low month-on-month price growth in June (2.25 percent as against 10.04 percent in June 2008).