Macroeconomic Forecast Bangladesh

In line with our expectations, consumer price inflation came in at 11.4% y-o-y in October, down from 12.0% in September. Food inflation ticked down to 12.8% y-o-y (from 13.8%), while non-food inflation inched higher for the sixth consecutive month to 9.1% y-o-y (from 8.8%). Keeping in mind the lagged data, the growth of the broadest measure of money supply, M3, has been on an unquestionable downtrend since peaking in May 2010. Adding this to the more recent downturn of private sector credit growth, disinflation is likely to continue. Our FY2011/12 (July-June) end-year inflation forecast stands at 10.5%.

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