INTRODUCTION

According to the topic of this project Economic Conditions of Bangladesh during April
2013-June 2013, we are interested in the scenario of the overall economy of the country. To
find out this scenario, we need to analyze some indicators and these indicators are called
macro aggregates. Macro aggregates refers to the indicators that reflects the overall economy
of a country.
As per the requirement of the project, four macro aggregates had to be selected. For the
purpose of this project, the four macro aggregates that I have selected are

Inflation
Export
Import &
Remittances

The purpose of the project is to analyze the state of the economy in the reference period of
April 2013-June 2013 (Q4FY13) with analyzing these four macro aggregate data. A
comparative analysis is also done with the same quarter of the previous year i.e. April 2012June 2012 (Q4FY12) based on the same macro aggregates.

INFLATION
Inflation refers to the sustained rise in the cost of living. It is influenced by interactions
between product market, factor market, money market, foreign exchange market etc. the
inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket
of goods.
The figures for inflation in Q4FY13 & Q4FY12 is as followingPoint to Point

2011-2012

April

May

Inflation
(General)
Food

9.93
8.12

9.15
7.46

Non-Food

13.77

12.72

2012-2013

June
8.56
7.08
11.7
2

Source: Monthly Fiscal Macro Update-Ministry of Finance

April

May

June

8.37
8.68

7.98
8.13

8.05
8.26

7.91

7.76

7.75

INFLATION (Point to Point)

10
9.5
9
8.5
8
7.5
April

May
2011-12

June
2012-13

First of all, before analyzing the two quarters one thing should be mentioned here. From
different analysts point of view, month-to-month inflation is much more important than that
of the point-to-point basis, which makes comparison between the same periods of two
consecutive years. According to Dr Zaid Bakht, head of research of the Bangladesh Institute
of Development Studies (BIDS), inflation on monthly basis is important. (FE
In Q4FY13, as we can see the inflation declined slightly month by month. This small decline
in inflation happened due to a drop in the price of some everyday essentials on the world
market and stabilization of fuel prices in both local and international markets.
On the other hand, in Q4FY12, food inflation started to somewhat slow down since April
2012 after the Aman harvest. Non-food inflation was on the rise and basically it was on the
rise since July 2011 mainly due to the upward adjustment in the administered prices of fuel
and electricity, and falling value of Bangladeshi Taka (BDT) against the United States Dollar
(USD), leading to imported inflation.

EXPORT
Exports measure the amount of goods or services that domestic producers provide to foreign
consumers. It is a good that is sent to another country for sale. Bangladesh mainly exports
readymade garments including knit wear and hosiery. Others include mainly Shrimps, jute
goods, leather goods and tea.

The export figure for Bangladesh in Q4FY12 & Q4FY13 is as below(Figures in USD Millions)
April
1890.9
Export
Growth in Export (%)

8
-7.13%

2011-2012
May
June
2199.42
-4.17%

April
2079.1

2223.5
-3.1%

5
9.95

2012-2013
May
June
2538.81
15.43

2696.36
16.31

Source: Monthly Fiscal Macro Update-Ministry of Finance

*Growth over the same period of the previous fiscal year.

EXPORT
2900
2700
2500
2300
2100
1900
1700
1500
April

May
2011-12

June
2012-13

As seen from above table and graph, the export during Q4FY13 had a higher growth than the
Q4FY12. If we see the growth rate, it can also be seen that there was a positive growth
scenario in April, February and June of 2013 compared to the same quarter of 2012.
If we take account of the Q4FY13, we can see that in May the export suddenly declined but
in the following month it recovered slightly. Growth of exports rose in June from May 2013
but still the amount is less than April. This poses a negatively affected picture of the export
scenario. Opinions from experts suggest that export from Bangladesh is going to be affected
in the current calendar year. According to a latest forecast by the Economist Intelligence Unit
(EIU), exports from Bangladesh are likely to be affected in the current calendar year due to
poor global economic growth and the ongoing recession in the euro zone.

According to Export Promotion Bureau (EPB) export earnings increased by 16.2 during
Q4FY13 against the corresponding quarter of FY12. This growth was possible mainly due to
increased exports of jute goods, leather, woven garments, knitwear products and terry towels.
On the contrary, some of the items experienced a negative export growth like raw jute, tea
and frozen food. Export Growth of these items recorded decline compared to the
corresponding quarter of FY12.

IMPORT
An import is any good or service brought into one country from another country in a
legitimate fashion, typically for use in trade. Import goods or services are provided to
domestic consumers by foreign producers. Bangladesh imports mostly petroleum product and
oil, machinery and parts, soybean and palm oil, raw cotton, iron and steel and wheat.
Bangladesh main imports partners are China, India, Indonesia, Singapore and Japan.
The export figure for Bangladesh in Q4FY12 & Q4FY13 is as belowImport payments (C & F)

Import Payments
Growth in Import

(figures in million USD)

2011-2012
April
May
June
2906.50 3093.60
2493.8
-9.99% -6.02%
-14.3%

April
2841.1
-2.3%

2012-2013
May
June
2815.8
2927.1
-8.9%
13.97%

Source: Monthly Fiscal Macro Update-Ministry of Finance

*Growth over the same period of the previous fiscal year.

IMPORTS
3200
3100
3000
2900
2800
2700
2600
2500
2400
April

May
2011-12

June
2012-13

The trend is import followed a similar pattern in both the quarters of 2012 and 2013. With
initial high amount in April, import declined in May and June and this happened in both the
years. Though in 2013, after a fall in May, import slightly gone up in June.
Overall Import payments recorded a decline during Q4FY13 compared to Q4FY12. This reflects
a scenario of higher domestic production in Q4FY13. Due to this higher domestic production,
import of rice decreased sharply as well as import of wheat also decreased by a significant
amount in Q4FY13. Import of other food items like milk & cream, spices, edible oil and sugar
also decreased during Q4FY13 compared to Q4FY13 while import of pulse increased during the
reference period.
As we closely look over the Q4FY13 scenario, we can see a fall in the import in May compared
to April. The main reason behind this was the undergoing political unrest throughout the country.
As of some officials and bankers, the country's overall import orders fell by more than 13 per cent
in May from the level of the previous month as political turmoil had gripped the country ahead of
the general elections.
According to central bank statistics, the settlement of letters of credit (LCs) against imports,
generally known as actual imports, also decreased by over 9.0 cent in the month of May last from
the level, in value terms, of that of the previous month and the reason behind this was the political
chaos.

REMITTANCES
A remittance is a transfer of money sent by a foreign worker to a home country. Remittances
are playing an important role in the economies of many developing and low income
countries. Remittance earning is one of the key drivers of our economy. It is one of the
macroeconomic factors that has helped to keep our economy booming for quite a long time.
The figures for remittance earning in Q3FY13 & Q3FY12 is as following2011-2012
2012-2013
April
May
June
April
May
June
Remittance
1082.28 1156.82
1070.8
1194.4 1087.19
1058.24
10.94%
3.00%
10.2%
-6.02%
-1.17%
Growth in Remittance 8.02%
Source: Monthly Fiscal Macro Update-Ministry of Finance
*Growth over the same period of the previous fiscal year.

REMITTANCES
1190
1170
1150
1130
1110
1090
1070
1050
April

May
2011-12

June
2012-13

If we see the tables and also the graph, we can see overall remittance inflow has been higher
in the Q4FY13 compared to Q4FY12. In Q4FY12, the remittance inflow decreased in the
following two month. Almost same thing also happened in Q4FY13 but here, in month of June,
the remittance inflow gone up compared to May. The inflow of workers remittance recorded a
7.4 percent growth rising to USD 3.72 billion during Q4FY13 compared to USD 3.46 billion
in Q4FY12. This growth was mainly due to higher remittance from Oman, Singapore and
USA.
As per the officials, the reason behind the significant fall of inward remittances in May of
Q4FY13 is due to fewer working days. We can assume that this was also the reason
responsible for decline in inward remittances in May of Q4FY12. Remittance income has
always been a strong plus points for Bangladesh as over the years this income kept growing
and helped to keep the economy booming. Despite political unrest in some Middle East
countries like Egypt, Libya, the remittance inflow has maintained an upward trend which is
positive news for Bangladesh.

CONCLUSION
In light of the four selected macro aggregates, it can be said that from the inflationary
perspective the economy was doing comparatively pretty well in the Q4FY13 as the 12month average inflation rate was lower compared to the same period in 2012 when inflation
was double digit. The decline can also be visible in terms of food inflation where in Q4FY13
the food inflation was much lower compared to Q4FY12. As said before, this was possible
due to a good harvest during Q4FY13.
From the export scenario, again the overall performance is good in Q4FY13 compared to
Q4FY12. The export growth was quite good during the reference period. Though if we
consider only Q4FY13 then the scenario is decreasing from April to June and as per expert
opinions, the export amount may get affected in the future months due to weak economic
condition in the developed world. It is also feared that the incidents like Rana Plaza and
Tazreen Garments may pose threat to the export amount in the current year.
In terms of import payments, as shown earlier, the overall Import payments recorded a
decline during Q4FY13 compared to Q4FY12 which reflects a scenario of higher domestic
production in Q4FY13. So we can say the economy was doing well in the reference quarter
Q4FY13 compared to Q4FY12.
In remittance earning, the reference period of Q4FY13 was again better compared to
Q4FY12. The overall remittance inflow was higher in Q4FY13. As per Ahsan Ullah,
executive director of BB, the overall growth of the inward remittance in FY13 was
satisfactory as it was achieved despite the global financial meltdown.
So, to sum up, based on the analysis of the selected four macro aggregates, it can be
concluded that the overall state of the economy was better in the reference period of Q4FY13
(April 2013 - June 2013) compared to Q4FY12 (April 2012 - June 2012).

REFERENCES
1. Official website-Bangladesh Bank
2. Official website-Ministry of Finance
3. Official website-Bangladesh Bureau of Statistics
4. The Financial Express, Tuesday, March 05 2013Link- http://www.thefinancialexpressbd.com/index.php?ref=MjBfMDNfMDVfMTNfMV84OF8xNjIxNzA=

5. The Financial Express, Thursday, July 04 2013

Link- http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDdfMDRfMTNfMV8xXzE3NTIyNw==

6. The Financial Express, Friday, March 08 2013

Link- http://www.thefinancialexpressbd.com/index.php?ref=MjBfMDNfMDhfMTNfMV8xXzE2MjQ2OA==

7. The Financial Express, Thursday, February 07 2013

Link- http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDJfMDdfMTNfMV8xXzE1OTM3Mg==

8. The Financial Express, Saturday, April 20 2013

Link- http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDRfMjBfMTNfMV8yXzE2NzAxMA==

9. The Financial Express, Thursday, May 09 2013

Link- http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDVfMDlfMTNfMV85MF8xNjg4NjU=

10. The Financial Express, Tuesday, March 19 2013

Link- http://www.thefinancialexpress-bd.com/index.php?ref=MjBfMDNfMTlfMTNfMV8yXzE2MzcyOA==