GDP expands at faster pace in fy2024
Bangladesh’s economy has grown at a faster pace, albeit marginally, in the current fiscal year than the previous one although the production of industrial goods and agricultural commodities recorded reduced growth.
The country registered a 5.82 percent growth in Gross Domestic Product (GDP) in 2023-24, up from 5.78 percent in 2022-23, according to provisional data released by the Bangladesh Bureau of Statistics (BBS).
The service sector, which encompasses trade, transport, hotel, IT, and financial activities, drove the overall growth of the GDP, a measure of the final value of goods and services produced within an economy during a period.
The service sector, which accounts for more than half of the economy, grew 5.8 percent in FY24 compared to 5.37 percent last fiscal year.
In contrast, the industrial sector, which makes up more than a third of the economy, expanded by 6.66 percent in FY24, which ends in June. However, the growth of industrial production was the lowest since FY2019-20 when the Covid-19 pandemic-induced slowdown wreaked havoc on the economy.
In FY24, agricultural production rose 3.21 percent year-on-year from FY23, according to the provisional estimate.
The national statistical agency’s estimate of GDP growth is almost close to the projections made by the World Bank and the International Monetary Fund (IMF) last month.
Trade, economic cooperation between China, Central Asian countries on fast lane
China’s trade and economic cooperation with Central Asian countries has been on a fast lane in recent years and has demonstrated the willingness of the world’s second-largest economy to promote common development with countries in the region, Chinese analysts said on Monday.
The remarks came as Chinese Foreign Minister Wang Yi, also a member of the Political Bureau of the Communist Party of China Central Committee, visited the Tajik capital of Dushanbe over the weekend.
China and Tajikistan are ready to explore new measures to further increase the scale of trade, expand agricultural cooperation, and speed up major connectivity projects such as the construction of key sections of the China-Tajikistan highway, Wang said, adding that China will actively consider importing more high-quality Tajik agricultural products.
Wang said bilateral trade grew by more than 50 percent in 2023 but there is still great room for development.
To speed up the two-way flow of people-to-people exchanges, China proposed plans to establish a streamlined personnel exchange platform with Tajikistan, including the issuance of 10-year multiple-entry visas for short-term visitors, such as those for business and family visits, to further facilitate personnel exchanges, according to the Xinhua News Agency.
Leading experts weigh in on growing India’s economy in 2024–25
India’s economy has been notably resilient amidst the past year’s global inflation and supply chain constraints, boasting an impressive growth rate of 7.8 percent in the 2023–24 fiscal year (FY) and exceeding the average G20 rate of 3.4 percent. Strong growth in the manufacturing sector, higher-than-expected agricultural output, and robust government spending have made India the world’s fastest-growing major economy.
However, according to the OECD’s latest figures, India’s economic growth is projected to slow to 6.6 percent in FY 2024–25, as global demand weakens and a tighter monetary policy takes shape to manage global inflationary pressures. With inflation and monetary policy expected to ease in the second half of 2024, the Paris-based think tank forecasts that India’s growth rate will remain at 6.6 percent in FY 2025–26. Although these figures are above the G20 average of 3.1 percent in both 2024 and 2025, they fall short of the Indian government’s target of 7 percent to 7.5 percent by 2030.
Russian fighter deal reflects Indonesia’s goal of a ‘sanctions-proof’ economy
Indonesian Ambassador to Russia Jose Tavares confirmed last week that a $1.14 billion contract signed for the acquisition of 11 Su-35S fighter aircraft from Russia remains in force, in spite of widespread unconfirmed reports and speculation since early 2019 that it had been terminated due to threats of sanctions by the United States Treasury Department. The ambassador added that Jakarta was waiting for the situation to become “more accommodating” before returning to implementation of the contract, stating that it was “put on hold to avoid certain potential inconveniences” – which was seen to refer to the threat of sanctions and other forms of Western pressure. The acquisition of a new generation of Russian fighters would end the hopes, widely expressed in the Western world, for the Indonesian Air Force to operate a fully NATO-compatible combat fleet. The deal has potentially significant strategic implications amid growing uncertainty regarding Jakarta’s future geopolitical alignment.
Japan’s economy skids, clouding BOJ’S rate hike plans
Japan’s economy fell faster than expected in the first quarter as the weak yen continued to batter consumers, throwing a fresh challenge to the central bank’s push to get interest rates further away from near zero.
Preliminary gross domestic product (GDP) data from the Cabinet Office on Thursday showed Japan’s economy shrank 2.0 percent annualised in January-March from the prior quarter, faster than the 1.5 percent drop seen in a Reuters poll of economists.
Downwardly revised data showed GDP barely grew in the fourth quarter of 2023, due to downgrades to capital expenditure estimates.
While preliminary capital spending data is often subject to heavy revisions in the final release, the across-the-board declines in all GDP components suggest Japan’s economy had no major growth engine in the first quarter.
That could create some hesitation for the Bank of Japan, which raised interest rates in March for the first time since 2007 and has since signalled its intention to continue tightening policy.
“It would be possible that the timing of rate hikes could be pushed back depending on how the GDP may rebound in the current quarter,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.
He said while the economy would certainly rebound in the current quarter due to rising wages, uncertainty remains around consumption in the service sector.
The latest GDP reading translates into a quarterly contraction of 0.5 percent, versus a 0.4 percent decline expected by economists. Revised first quarter figures will be released on June 10.
Malaysia’s economy grows 4.2pc y/y in Q1
Malaysia’s economy grew 4.2 percent in the first quarter of 2024 from a year earlier, beating market expectations, government and central bank data showed on Friday.
Economists surveyed by Reuters had forecast gross domestic product growth of 3.9 percent in the January to March period, matching the advance estimate by the Statistics Department.
Annual growth in the final quarter of 2023 was revised down slightly to 2.9 percent.
The critical role of SMEs in Nepal’s economic development
Small and medium enterprises (SMEs) are considered to be the foundation for sustainable, inclusive and resilient economic development, playing a vital role in maintaining stability in the economy through sustained growth, employment generation and establishment of an effective value chain.
The contribution of SMEs to Nepal’s economy is substantial. SMEs contribute 22 percent to the Gross Domestic Product (GDP) besides generating employment for 1.8 million people, especially women, making them invaluable to their empowerment; they also add to an inclusive and broad-based economy.
Despite its decade-long armed conflict with the Maoists, Nepal maintained its macro-economic stability and there was consistent moderate growth, according to Dr. Yubaraj Khatiwada, Former Finance Minister. However, SMEs are grappling with manifold challenges following the COVID-19 pandemic, as economic growth fell to -2.4 percent, a first in the 40 years the country has measured its gross domestic product.
Sri Lankan gov’t to introduce 2 bills to bolster economy
The Sri Lankan government will introduce two significant bills aimed at bolstering the country’s economy to parliament on Wednesday, a minister said on Monday.
The “Economic Transformation Bill” and the “Public Financial Management Bill” are designed to enhance public finance management and safeguard against future economic downturns, State Minister of Finance Shehan Semasinghe told a press conference.
Semasinghe said it is necessary to maintain optimal levels of public financial management to avert future economic crises, and the bills are aligned with recommendations from a collaborative program with the International Monetary Fund.
He said the legislation encompasses reforms essential for international trade, trade agreements, and climate change mitigation efforts.
In 2022, Sri Lanka’s public debt ratio stood at 128 percent, a figure slated to be reduced to less than 95 percent by 2032, said Semasinghe.
Similarly, the fiscal requirement, which was 34.6 percent of gross domestic product in 2022, aims to be lowered to below 13 percent by 2032, according to the minister.
Vietnam deputy PM: economy facing mounting pressure
Vietnam’s economy is facing mounting pressure and the government will maintain policies that support growth, Deputy Prime Minister Le Minh Khai said on Monday.
Khai said inflation is on the rise while credit growth remains weak, adding that global geopolitical situations are unfavourable and unpredictable.
“It’s a huge challenge to reach this year’s socio-economic targets,” Khai said at a month-long National Assembly meeting starting on Monday.
Vietnam is targeting economic growth of 6.0 percent-6.5 percent this year, faster than an expansion of 5.05 percent last year.
Khai said Vietnam will continue policies that are supportive for economic growth, including seeking to cut loan interest rates, restructuring loans for firms facing difficulties and boosting public investment.
He said Vietnam will stick to its target of 15 percent credit growth this year.
Thailand’s economic growth slows to 1.5 pct in q1
Thailand’s economy expanded 1.5 percent in the first quarter of 2024 from a year earlier, driven by the tourism sector and private consumption, the country’s economic planning agency said on Monday.
The gross domestic product (GDP) in the January-March period slowed from a 1.7-percent growth in the previous quarter due to declines in public investment, government spending and merchandise exports, according to the data released by the Office of the National Economic and Social Development Council (NESDC).
On a quarterly basis, the economy grew a seasonally adjusted 1.1 percent in the first three months of this year, rebounding from a revised 0.4 percent drop in the October-December quarter, the NESDC said in a statement.
RCEP, FTAs to help Cambodia attract more FDIs, boost exports
The Regional Comprehensive Economic Partnership (RCEP) agreement and bilateral free trade agreements (FTAs) are expected to help Cambodia attract more foreign direct investment (FDIs) and boost its exports, National Bank of Cambodia’s Governor Chea Serey said here on Monday.
Cambodia is a member of the RCEP agreement that engaged with 15 Asia-Pacific countries, and the kingdom also has bilateral FTAs with China, South Korea and the United Arab Emirates.
“On the back of the implementation of the RCEP agreement and other bilateral FTAs, Cambodia is expected to attract more FDI inflows and expand its exports to the region,” she said in a speech during the opening ceremony of a seminar on Cambodia’s financial stability.
These trade pacts will help boost Cambodia’s productivity and promote its economic diversification, Serey said, adding that the kingdom’s economy is forecast to grow 6 percent in 2024, up from 5 percent in 2023, driven by a rise in exports, recovery in tourism, robust growth in transport and communication, and flat growth in agriculture.