Macroeconomic Forecast Bangladesh

In line with our expectations, Bangladesh's cumulative current account balance for the ongoing fiscal year (FY2011/12, July-June) has entered into deficit territory - the first time since November 2008. The latest data showed a cumulative deficit of US$372mn through the first four months of FY2011/12. Export growth has substantially weakened, falling to 1.9% y-o-y in November (from 16.7% in the previous month). Similarly, remittances are starting to show clearer signs of fragility, with the latest growth figure coming in at -9.0% y-o-y in November (down from 12.5% in October). We are pencilling in a nominal current account deficit of US$1.3bn (or 1.1% of GDP) this fiscal year.

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