| AGRICULTURE |
| Agricultural production declined in
1997-98.,owing largely to decreased crop production (in particular rice).The growth rate
of agriculture sector was 3.1% in 1997-98 compared to 6.4% in 1996-97. Even the volume
growth in agriculture was somewhat offset by lower agricultural commodity prices. The
target for foodgrains production during 1997-98 was 21.1 million tons: due to unfavorable
weather conditions actual foodgrains production, according to the latest estimate, would
be 20.5 million tons, as against actual production of 20.34 million tons in
1996-97,showing an increase of about 0.79%. |
|
| INVESTMENT
AND SAVINGS |
| Gross investment as percent of GDP declined to
16.3% from 17.3% in the previous year. Both public and private investment shared in the
decline. National savings as percentage of GDP remained unchanged but the domestic savings
GDP ratio rose slightly i.e from 7.5% in 1996-97 to 7.9% in 1997-98. |
|
| MONETARY
DEVELOPMENT |
| Total domestic credit rose by 12.6% to Tk.556.40
billion compared to 13.7% increase in 1996-97 to Tk.493.96 billion. In 1997-98,net credit
to government increased by 15.7% to Tk. 92.72 billion, compared to a 27.1% increase
1996-97 to Tk. 80.17 billion. Credit to other public sectors increased by 6.4% to Tk.
62.50 billion, compared to 7.1% increase in 1996-97 to Tk. 58.74 billion. Credit to
private sector increased by13.0% to Tk. 401.18 billion compared to 12.1% increase in
1996-97 to Tk.355.05 billion. Net domestic assets of the banking system increased by 11.0%
compared to 13.2% increase in the previous year. while net foreign assets of the banking
system increased by 3.8% in contrast to 2.8% decline in the previous year. Total liquidity
grew by 10.1% to Tk. 557.24 billion in 1997-98,compared to 10.8% increase to Tk.506.28
billion in 1996-97. The bank rate was raised to 8.0% from 7.5% in 1996-97.The interest
rate band remained between 8% in 1997-98. |
|
| BALANCE OF
PAYMENTS |
| The current account deficit increased by 13.1%
to US $604 million (1.8% of GDP) in the preceding year. Trade deficit declined by 19.1% to
US$2,219 million (6.7% GDP) from US$2,744 million (8.3% of GDP) in the previous
year. |
|
| EXPORTS |
| Total export earnings for 1997-98 amounted to
US$5,161 million (15.5% of GDP) compared to US$4,418 million (13.4% of GDP) in
1996-97.This indicates an increase of 16.8% compared to 13.8% in 1996-97.Garments had the
major share (55.1%) followed by knitwear and hosiery (18.2%), frozen food (5.7%), jute
goods (5.5%), leather (3.7%), raw jute (2.8%). Chemical products (1.4%) and tea
(0.9%). |
|
| IMPORTS |
| Total import payments for 1997-98 amounted to
US$ 7,380 million (22.2% of GDP) compared to US$7,162 million (21.8% of GDP) in
1996-97.This indicates an increase of 3.0% compared to 4.1% growth in 1996-97.Capital
goods (29.2%), yarn (4.7%), petroleum products (4.0%), cotton (2.9%), edible oil
(3.3%),cement (2.1%),crude petroleum (2.6%),wheat (2.1%),fertilizer (1.8%),oil seeds
(1.1%) and rice (0.3%) had the major shares in imports. |
|
| WAGE EARNERS REMITTANCES |
| Remittances of Bangladesh nationals working
abroad amounted to US$1,433 million as against US$1,475 million in the preceding year,
indicating a decrease of 2.8%, compared to 21.2% growth in the previous year. Number of
workers in overseas employment in 1997-98 decreased to 218.000 from 228.000 in 1996-97. A
huge amount of 20% to 30% of official remittances was missing due to use of illegal 'Hindi
' channel. |
|
| FOREIGN
ASSISTANCE |
| In 1997-98 foreign aid disbursement amounted to
US$1350 million compared to US$1481 million in 1996-97.It indicates a decrease of 8.8%
compared to 2.6% increase in the previous year. The disbursed aid amount included US$562
million as grants and US$788 million as loans. Total aid commitment for 1997-98 amounted
to US$1900 million compared to US$ 1661 million in 1996-97. |
|
| FOREIGN EXCHANGE RESERVES |
| Foreign exchange reserves increased to US $
1,787 million in 1997-98 from US $1,719 million (equivalent to 2.4 months of imports) in
1996-97, indicating an increase of 4.0%. |
|
| PRICE SITUATION |
| Due to Unfavorable food production and increased
production cost relative to productivity, the general price level registered a rising
trend during 1997-98, with the inflation rate increasing by 2.4 percentage point to 6.3%
from 3.9% in 1996-97, and from an average of 4.3% during the period 1990-97 |
|
| BUDGET FOR
1998-99 |
| The government budget for 1998-99 envisages
revenue receipt of US $4,155 million and revenue expenditure of US $3,187 million. In
1997-98 revised budget, revenue receipts amounted to US $4,055 million as against the
revenue expenditure of US $ 3,132 million. In 1998-99 budget gross revenue surplus is
projected at US $ 968 million. After adjusting the capital and food accounts and non (ADP)
project, the net contribution to the annual development program (ADP) from the revenue
budget is expected to be US $ 1,251 million. The annual development program (ADP) for
1998-99 has been projected at US $2,720 million indicating a 3.2% increase over the
revised development budget of US $2,635 million in 1997-98. Domestic resources are
expected to finance more than 46% of development budget of 1998-99 compared to 45% during
the previous year. The 1998-99 budget calls for an increase in development expenditure on
projects in economic and social sectors with an emphasis on reactivating work in rural
areas and poverty alleviation. For industry-led growth and distribution of the fiscal
burden more equitably, efforts are being made to improve tax administration, reduce duties
on raw materials and intermediate goods, lower the corporate tax rate from 40% to 35%
withdraw duties and VAT from computer and its accessories and offers other investment
incentives. |
