Weekly News Clippings (March 10, 2015)

SME financing hits new record (Dhaka Tribune, March 5, 2015)     

SME lending has grown by 13 percent over the last year to a reach a record level of Tk. 1,00,910 crore. Following the advice of Bangladesh Bank, banks (Tk. 98,032 crore) and non banking financial institutions (Tk. 2,877 crore) have increased their lending program for the SME sector which has created around 1.5 million new jobs across the country. The quality of SME financing has also improved due to constant and more effective monitoring of SME loans by Bangladesh Bank with loan recovery also improving.

Remittance drops for second month (Dhaka Tribune, March 3, 2015)

Remittance inflow continues to fall as February saw a 5% decrease over the previous month (which also saw a decline). The remittance amount for February stood at USD 1.17 billion.  Interestingly, remittance for January and February (USD 2.42 billion) was only slightly lower than the amount received in the same period in 2014 (USD 2.43 billion). Reasons for this drop include the ongoing political unrest and a fall in manpower export in the global market - mainly in the Middle East - which saw a decline of 23.38 percent in October last year.

IMF offers recipe to fuel economic growth (The Daily Star, March 5, 2015)

The International Monetary Fund has identified 6 areas that the government should focus on improving, in order to boost economic growth. These are: 1) prioritizing major infrastructure projects 2) making land available for investors 3) reforming the financial sector 4) revenue collection 5) enacting and implementing effective policies on power and energy 6) combating the impact of climate change.

Rice imports rise to high four-year (The Daily Star, March 5, 2015)

Traders have resorted to cheaper rice from India which has led to a four year high in rice imports. In addition to factoring price, traders and millers have made the most of the zero-duty facility for rice imports as well as the higher production of medium quality of rice in India. The import cost for one kilogram of Swarna - a medium-quality rice variety which is also grown locally – lies between Tk. 24.5 and Tk. 25.20 compared to the local wholesale price of Tk. 27.

Bangladesh becoming a top spot for Muslim travelers (The Daily Star, March 5, 2015)

MasterCard’s Global Muslim Travel Index of the top 20 destinations sees Bangladesh come in at number 18 (index score of 60.2), ahead of Algeria (58.5) and Azerbaijan (58.2) and just behind Kazakhstan (60.5) thanks to its availability of Muslim-friendly services and facilities. Malaysia leads the way with an index score of 83.8.

Exports rise 5 pc in Feb (The Daily Star, March 5, 2015)

Exports saw a 5.46 percent year-over-year rise to USD 2.51 billion in February attributed to shipment of garments, according to Bangladesh Bank. However, the negative impact of the political turmoil will likely be felt in the next two to three months in light of the fewer orders from retailers.

Natural disasters to threaten Bangladesh manufacturing (The Daily Star, March 5, 2015)

With 8 Bangladeshi cities featured among the top 100 cities most exposed to natural shocks, Bangladesh’s propensity for natural disasters could hamper its potential to become a manufacturing hub for investors leaving China. Dhaka came in at 35 below Barisal (24), Chittagong (27), Khulna (28) and Narayanganj (33). The index ranks cities over 1,300 cities from 198 countries, based on the combined risk posed by tropical storms and cyclones, floods, earthquakes, tsunamis, severe storms, extra-tropical cyclones, wildfires, storm surges, volcanic eruptions and landslides.

Accord garment makers warns of severing ties with 14 (Financial Express, March 5, 2015)

The Bangladesh Accord on Fire and Building Safety – a consortium mostly comprised of European buyers – has issued non-compliance letters to 14 factories which did not comply with the fire, electrical and structural requirements it had set in its inspections. One factory does not wish to do business with the Accord because of relative cost implications and as such have refused to comply with the requirements. The other 13 however, are taking immediate measures to do so. 

Eurozone prices, remains jobs firm but deflation threat (The Daily Star, March 3, 2015)

The 19-nation eurozone saw mixed results for its economic performance as the fall in consumer prices eased and unemployment fell but there remain fears of a deflationary spiral. Consumer prices fell 0.3 percent in February (compared to a drop of 0.6 percent in January) as tumbling energy prices (down 7.9 percent in February compared to a fall of 9.3 percent in January) lowered the cost of living.  Unemployment declined to 11.2 percent in December – the lowest since April 2012. 

Tk 10,000 crore loss a year for delay in Dhaka-Ctg highway upgrade: DCCI (The Daily Star, March 3, 2015)

Delays in upgrading the Dhaka-Chittagong highway (from 2 lanes to 4) have resulted in losses of Tk. 10,000 crore a year, according to the Dhaka Chamber of Commerce and Industry (DCCI). At a meeting between the DCCI President Hossain Khaled and the Planning Minister AHM Mustafa Kamal, the latter stated that the highway will be completed in the next six months.