Bangladesh Perks Up!

Bangladesh’s economy performed well in FY12 (July 2011-June 2012), with preliminary estimates pegging growth at 6.3 percent. Inflation pressures have eased, given moderate monetary tightening and lower food price inflation. The current account deficit has narrowed and foreign reserves have rebounded as a result of policy adjustments and remittance flows that compensated slowing export growth. To ensure stability, the government has pursued appropriate fiscal restraint, limiting its budget deficit (excluding grants) to an estimated 4.1 percent of GDP in FY12. Underpinning this has been strong revenue collection efforts and containment of fuel and electricity subsidies, as administered price increases helped narrow losses at energy-related state-owned enterprises.