Good morning. Here's what happened overnight and what you need to know today.
1.
IMF Slashes Growth Forecast to 4.5%: After the World Bank, the International Monetary Fund has now brought down Bangladesh's growth forecast for this year as political uncertainty, industrial unrest and floods weigh heavily on economic activities. In its flagship World Economic Outlook, IMF slashed Bangladesh's growth projection by 2.1 percentage points to 4.5 percent, the lowest since fiscal 2019-20, when the global coronavirus pandemic hit. In fiscal 2019-20, the GDP growth was 3.4 percent. Earlier in June, the IMF forecasted Bangladesh's GDP growth for this fiscal year to be 6.6 percent. (The Daily Star)
2.
Economic Uncertainty Impacts Domestic Revenue Mobilisation: The ongoing economic uncertainty has affected domestic revenue mobilisation in Bangladesh, resulting in negative growth in the first quarter of the current fiscal year (FY). According to provisional data from the National Board of Revenue (NBR), revenue mobilisation decreased by 6.07 per cent or Tk 45.84 billion in the July-September period compared to the same time last year. For the months of July and August, revenue collection showed negative growth rates of 0.50 per cent and 10.97 per cent respectively. (The Financial Express)
3.
Rate Hike Further Dampens Investment Mood: In an effort to curb stubbornly high inflation, the central bank's latest interest rate hike has sparked concerns among the business community as they argue that the increased cost of borrowing will strain their existing ventures and dampen future expansion plans. The Bangladesh Bank yesterday raised the policy rate by 50 basis points to 10 percent, marking the fifth increase this year and the third under Governor Ahsan H Mansur. This hike places the repo rate, the interest rate at which commercial banks borrow money from the central bank, above the inflation rate for the first time in many years. (The Daily Star)
4.
6 Troubled Banks Get Tk50b in Liquidity Support:
The Bangladesh Bank, in the last 30 days, has issued liquidity guarantees amounting to nearly Tk 5,000 crore for six struggling banks weakened by financial irregularities and loan frauds. Islami Bank Bangladesh Limited (IBBL) received Tk1,495 crore, Social Islami Bank Tk1,000 crore, Global Islami Bank Tk295 crore, First Security Islami Bank Tk775 crore, Union Bank Tk150 crore, and National Bank Tk820 crore, according to central bank sources. These troubled banks were given liquidity support from Sonali Bank, Dutch-Bangla Bank, Eastern Bank, City Bank, and Mutual Trust Bank. (The Business Standard)
5.
300 Bank Accounts Frozen: The Bangladesh Financial Intelligence Unit (BFIU) has frozen nearly 300 bank accounts since August 5 as part of an intensified effort to combat money laundering. Significant sums of money are involved, according to officials, who noted that this move forms part of a broader initiative aimed at identifying and halting the illegal outflow of funds from the country. Sources at the central bank's financial intelligence division revealed that the ongoing investigation is focused on tracing funds laundered abroad. (The Business Post)
6.
Pressure Piles on President to Step Down: The walls seemed to be closing in on President Mohammed Shahabuddin as calls for his resignation grew louder yesterday. As more and more people joined demonstrations for his resignation, the government yesterday called him out on his "lies" about Sheikh Hasina's resignation as prime minister. It all began after Manab Zamin on Sunday published an exclusive interview of him saying that he only heard that Hasina had resigned, but there was no evidence of her resignation. (The Daily Star)
----Saju Sarker
BBN/SSR/AD