From economic miracle to IMF bailout in two months, what happened to Bangladesh?

[Imran Khan]

From economic miracle to IMF bailout in two months, what happened to Bangladesh?​

In November, the International Monetary Fund approved loan assistance worth $4.5 billion to Bangladesh after its economy declined to levels that has now led people to protest against the country’s administration​

FP Staff December 16, 2022 15:53:17 IST

The IMF assistance comes as a surprise to many as the country was hailed as a ‘South Asian economic miracle’. AFP


In November, Bangladesh sought International Monetary Fund’s assistance in the form of loan assistance. According to a statement released by IMF, the country will receive a loan worth $4.5 billion.
The IMF assistance comes as a surprise to many as the country was hailed as a ‘South Asian economic miracle’ for showing remarkable growth in per capita Gross Domestic Product starting in 2020.
Bangladesh is now the third South Asian country to receive an IMF bailout package after Sri Lanka and Pakistan. The total amount will be disbursed in seven instalments and the first one will be cleared in February 2023.
Bangladesh’s Finance Minister AHM Mustafa Kamal said in a press briefing that the loan’s interest rate will depend on the country’s market conditions at the time of maturity.
In 2021, IMF predicted that Bangladesh’s GDP would exceed that of Denmark and Singapore. Last year, its GDP even surpassed India’s, a phenomenon that was described as a “bottomless basket” by US Secretary of State Henry Kissinger who said at the time that the country is steadily emerging as a bull economy.
Its GDP grew by 3.4 per cent in 2020, by 6.9 per cent in 2021 and was expected to grow by 7.2 per cent in 2022.
A short-lived success
A global economic slowdown hit Bangladesh’s steady growth too.
The IMF said, “Bangladesh’s robust economic recovery from the pandemic has been interrupted by Russia’s war in Ukraine, leading to a sharp widening of the current account deficit, rapid decline of foreign exchange reserves, rising inflation and slowing growth.”
According to a report by NPR, Bangladesh’s economic growth rests mainly on exports, remittances and fuel prices – all of which have recently taken a severe blow. Farria Naeem, an economist from the International Growth Centre and London School of Economics said, “Things have gone from bad to worse, given the current volatility in the global economy.”
In August this year, the country’s inflation rate hit a whopping 9.52 per cent, the highest in more than a decade.
Bangladesh’s largest economic driver is its ready-made garment industry which accounts for more than 80 per cent of the country’s exports. The COVID-19 pandemic had a devastating effect on the industry with at least a quarter of its workforce losing jobs as factories pulled down their shutters.
However, as consumer spending increased in the subsequent years, export orders also started to increase. But this year, orders plummeted by almost 30 per cent owing to worldwide inflation.
Lastly, the Russia-Ukraine war has shaken the country’s power grid and for a country that mainly relies on imported fuel, the blow caused by the conflict was rather severe.
Ahmed Mushfiq Mobarak, professor of economics at Yale University said, “While Bangladesh’s amazing growth was going on, what it was hiding is that infrastructure was always a problem. Power is always in deficit. So, when any kind of shock that happens — Russia invades Ukraine, thousands of miles away from us — we’re already on edge and suddenly our bills go up.”
Protests across the country
All of this accounted for an increase in bus and taxi fares overnight and food items got expensive.
Thousands took to the streets to protest against the administration’s response to the economic crisis.
Protestors now demand the resignation of Prime Minister Sheikh Hasina and called for new elections.
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

From economic miracle to IMF bailout in two months, what happened to Bangladesh?

In November, the International Monetary Fund approved loan assistance worth $4.5 billion to Bangladesh after its economy declined to levels that has now led people to protest against the country’s administration

www.firstpost.com

 

[Homo Sapiens]

There was never any economic miracle. Bangladesh was just growing at a steady, healthy pace. Some foreign media hyped up things and dubbed it as economic miracle because they never ever could imagine that Bangladesh could survive as a state let alone flourish. Remember all those dire warning in 1970s about massive die-off in Bangladesh by 1980s. They had full confidence that nothing good can come out from that wretched land and when Bangladesh prove them wrong with continuously improving socio-economic condition they were bewildered and termed it as 'Bangladesh miracle', 'Bangladesh paradox' etc.

 

[Flight of falcon]

Lesson:

Don’t cook books and fudge numbers…. Sooner or later you will be caught.

 

[-blitzkrieg-]

But but but Bangladesh was better than pakistan in ALL fields. And better off after 71..

 

[AmiEktaKharapChele]

Coping to he

 

[epebble]

But but but Bangladesh was better than pakistan in ALL fields. And better off after 71..

But there is simply no comparison between temporary setbacks of Bangladesh economy and structural problems of Pakistan economy. The problem with Pakistan is no economist can see a way to prevent collapse. The previous finance minister Miftah Ismail seems the best trained economist in Pakistan today and he is being very candid about it.

Shortage of essential goods feared​

Shortage of essential goods feared

Unavailability of dollars with banks is seen as another factor holding up imports.

www.dawn.com

 

[Abu Shaleh Rumi]

But but but Bangladesh was better than pakistan in ALL fields. And better off after 71..

We are better than Pakistan in HDI field. But, we never surpassed Pakistan in STEM education and military field.

Our problem comes from global high energy price, inflation and recession. Else, even with our massively corrupt government we could have achieved a stable ~7% GDP growth.

 

[Horse_Rider]

From economic miracle to IMF bailout in two months, what happened to Bangladesh?​

In November, the International Monetary Fund approved loan assistance worth $4.5 billion to Bangladesh after its economy declined to levels that has now led people to protest against the country’s administration​

FP Staff December 16, 2022 15:53:17 IST

The IMF assistance comes as a surprise to many as the country was hailed as a ‘South Asian economic miracle’. AFP


In November, Bangladesh sought International Monetary Fund’s assistance in the form of loan assistance. According to a statement released by IMF, the country will receive a loan worth $4.5 billion.
The IMF assistance comes as a surprise to many as the country was hailed as a ‘South Asian economic miracle’ for showing remarkable growth in per capita Gross Domestic Product starting in 2020.
Bangladesh is now the third South Asian country to receive an IMF bailout package after Sri Lanka and Pakistan. The total amount will be disbursed in seven instalments and the first one will be cleared in February 2023.
Bangladesh’s Finance Minister AHM Mustafa Kamal said in a press briefing that the loan’s interest rate will depend on the country’s market conditions at the time of maturity.
In 2021, IMF predicted that Bangladesh’s GDP would exceed that of Denmark and Singapore. Last year, its GDP even surpassed India’s, a phenomenon that was described as a “bottomless basket” by US Secretary of State Henry Kissinger who said at the time that the country is steadily emerging as a bull economy.
Its GDP grew by 3.4 per cent in 2020, by 6.9 per cent in 2021 and was expected to grow by 7.2 per cent in 2022.
A short-lived success
A global economic slowdown hit Bangladesh’s steady growth too.
The IMF said, “Bangladesh’s robust economic recovery from the pandemic has been interrupted by Russia’s war in Ukraine, leading to a sharp widening of the current account deficit, rapid decline of foreign exchange reserves, rising inflation and slowing growth.”
According to a report by NPR, Bangladesh’s economic growth rests mainly on exports, remittances and fuel prices – all of which have recently taken a severe blow. Farria Naeem, an economist from the International Growth Centre and London School of Economics said, “Things have gone from bad to worse, given the current volatility in the global economy.”
In August this year, the country’s inflation rate hit a whopping 9.52 per cent, the highest in more than a decade.
Bangladesh’s largest economic driver is its ready-made garment industry which accounts for more than 80 per cent of the country’s exports. The COVID-19 pandemic had a devastating effect on the industry with at least a quarter of its workforce losing jobs as factories pulled down their shutters.
However, as consumer spending increased in the subsequent years, export orders also started to increase. But this year, orders plummeted by almost 30 per cent owing to worldwide inflation.
Lastly, the Russia-Ukraine war has shaken the country’s power grid and for a country that mainly relies on imported fuel, the blow caused by the conflict was rather severe.
Ahmed Mushfiq Mobarak, professor of economics at Yale University said, “While Bangladesh’s amazing growth was going on, what it was hiding is that infrastructure was always a problem. Power is always in deficit. So, when any kind of shock that happens — Russia invades Ukraine, thousands of miles away from us — we’re already on edge and suddenly our bills go up.”
Protests across the country
All of this accounted for an increase in bus and taxi fares overnight and food items got expensive.
Thousands took to the streets to protest against the administration’s response to the economic crisis.
Protestors now demand the resignation of Prime Minister Sheikh Hasina and called for new elections.
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.

From economic miracle to IMF bailout in two months, what happened to Bangladesh?

In November, the International Monetary Fund approved loan assistance worth $4.5 billion to Bangladesh after its economy declined to levels that has now led people to protest against the country’s administration

www.firstpost.com

It's called a "Bear Market Rally"

 

[chinasun]

Pakistan started the process of "deindustrialization" early in its economy. It seems that the proportion of the tertiary industry in the economic structure is high, showing a consumption driven "post industrialization" state. In fact, the main industrial categories and consumer industries are closely related to agriculture. In the case of low level of agricultural modernization, Pakistan's economy is still in a state of "eating from the sky" to a large extent. For example, the statistics of the Ministry of Finance of Pakistan show that agriculture contributes 19.2% to GDP, providing employment opportunities for about 38.5% of the labor force. More than 65%~70% of the population live on agriculture, which is closely linked with the secondary and tertiary industries and plays a key role in stimulating the economy, but is still restricted by climate, temperature, water shortage, precipitation changes, etc. At the same time, Pakistan's manufacturing industry is not fully developed, and it occupies a low-end position in the global industrial chain and value chain. Economic growth lacks momentum. Inadequate employment and insufficient labor force constitute a two-way constraint on economic development. Moreover, the local manufacturing industry is underdeveloped, most industrial products rely on imports, and the ability to earn foreign exchange through exports is poor, which leads to frequent balance of payments crises, and the macro-economy is vulnerable to external shocks.
Bangladesh has a single economic structure and relies heavily on natural gas and diesel for power generation. 63% of its electricity comes from natural gas. 10% comes from diesel and 25% from India. The infrastructure is relatively backward, and the cost advantage is lost in the competition with Vietnam due to the impact of energy prices. Bangladesh clothing orders plummeted by 30%.
As a result of the increase in world currency interest rates, countries have suffered from devaluation of their own currencies, as well as the rise in energy and food prices caused by the war between Russia and Ukraine.All countries are facing difficulties in their economies, so we should not blame the government too much.It should also be noted that ASEAN and other regional economic alliances have played a role in maintaining independence and resisting economic risks.

 

[bluesky]

From economic miracle to IMF bailout in two months, what happened to Bangladesh?​

In November, the International Monetary Fund approved loan assistance worth $4.5 billion to Bangladesh after its economy declined to levels that has now led people to protest against the country’s administration​

Our BAL party just created a myth of development with borrowed money. About my other posts, I was always skeptical about this so-called development.

A country can develop only with the participation of its own people and with its own money. BD's Hasina Bibi created a myth by playing India, China, and America against each other.

Now, when BD has little money, China is willing to extend it loans on various projects. Had it materialized like that, our Hasina Bibi would still be claiming a Great Development.

But, India hates this Chinese involvement in BD and now, our great Hasina Bibi cannot ask for more Chinese money. So, BD and Hasina both are in deep trouble. It has now little money to pay back the already matured $100 billion loan money.

The repayment this FY is $2.7 billion and it will increase to $5 billion when it is FY2030. Why so high? It is because more loan money will get matured by that time.

So, what do you expect? BD is following the way of Pakistan and SL.

 

[epebble]

Pakistan started the process of "deindustrialization" early in its economy. It seems that the proportion of the tertiary industry in the economic structure is high, showing a consumption driven "post industrialization" state. In fact, the main industrial categories and consumer industries are closely related to agriculture. In the case of low level of agricultural modernization, Pakistan's economy is still in a state of "eating from the sky" to a large extent.

Complicated words to describe simple concepts: Pakistan's economy consists of borrowing money, importing stuff and consuming. What is not borrowed comes from remittances. No meaningful production happens in Pakistan. Military, religion and politics are the largest 'industries'.

 

[Indos]

Tough situation for all countries. The Fed and European Central Bank keep raising interest rate. Yesterday both of them raise again interest rate 50 basis points. Developing countries bond market gets effected heavily since early 2022 when The Fed keep raising its interest rate. Foreign bond holders leave developing countries market. This results in weakening of developing countries currency.

Commodity prices have also been raising since middle of 2021 and exacerbated by Russia/ Ukraine war. Higher inflation has also been started in 2021 due to supply chain problem, now it is getting pushed by higher commodity prices as well.

Countries with power plant using gas will be much effected since gas price is the one that become the most expensive compared to other fossil fuels like oil and coal.

Even South Korea gets trade deficit this year around 68 billion USD. India trade deficit is 198 billion USD in the last 8 months.

 

[Catalystic]

WEF and its global chaos creation in process……

 

[fallstuff]

Lesson:

Don’t cook books and fudge numbers…. Sooner or later you will be caught.

Like a clockwork !
Problem is poor people pays the price while thives live large.

 

[chinasun]

you plagiarist, you! give a reference to where you got this from.

anyhoo Pakistan has always had far too many crooks. it is essentially more hindu banya than Muslim in its mindset.

there was a time when Gen. Ayub khan (and amreeka) tried to industrialize it. land was granted huge amounts of loans were made. when the time for accounting came it was discovered that it had all been stolen by waderas, bankers, patwaris/gardawars/tehsildars and muhajirs.

when attempts were made to recover the stolen land and cash, they trotted out Fatima Jinah to discredit and topple the gormint

The section on Pakistan. I have read some articles of Chinese think tanks. About a month ago.