'Impact in Bangladesh’s Economy After the Budget of Export Import\r'

'Assignment On Impact in Bangladesh’s thriftiness after the figure of tradeation outcome on diet and Garments descriptor Name: Financial Management Course enrol: Bus-302 Section- 01 Submitted To Sumaiya Zaman Lecturer & Co- Ordinator ULAB indoctrinate of Business Submitted By Tamim Hossain Turjo Id. 092011100 Md. Masud Rana Id. 092011084 Sony Saha Id. 092011090 Mst. Tazmina Afrin Nipu Id. 092011096 Atiker Nesa Chowdhury Id. 093011101 University of Liberal arts BangladeshDate Of Submission: 18-08-2011 INTRODUCTION The national figure of FY2011-12 has been announce at the midpoint of the take place in judicature activity’s pentad twelvemonths occupancy, spoiled by challenges to concord the balances and the performance of the maneuvers for which it was voted to spot. The current military post of macroeconomic balances, specially triggered by in perceptual constancy of values and contractionary financial policies, whitethorn be notwithstanding pr essurized by the possibility of fiscal compress.These larnments of maintaining the balances may put the g overnance on the edge of achieving the target of ontogenesis, re screen doory from lethargic improvement in indigence improvement and the reversing the rising trend of divergence. The investment scenario is thus far to take the desired path, particularly being underpinned by blue provoke count, first FDI inflow, acute exponent crisis, poor governance, and political instability. The inflationary pressure has been ascent at a rising localize broadly speaking through nutrition inflation in the country.Furthermore, soaringer(prenominal) trade deficit and the stagnated remittance inflow atomic number 18 putting pressure on the balance of salary situation. The financial space squeeze has emerged by ripening burden of financial support requirements especially to the power and energy bea driven by the government to finance the private generators and the global fuel harm hike. The limitation of fiscal space might shake it difficult for the government to seek remedy to refreshment required for revamping the economy.In addition to that, IMF’s loan with inapplicable conditionality might create severe pressure on the overall macroeconomic strength as hearty as fall uponing the targeted result path. The government might expression extraordinary challenges to wee-wee the increment target as quoted in the cypher document of FY2011-12 collect to the overlook of supporting base in the overall economy of Bangladesh. The fiscal space squeeze and IMFs conditions for accessing one one thousand thousand dollar loan to Bangladesh might also cover the way for increasing different types of inequality; such(prenominal) as †geographical inequality, income inequality and social inequality in the country.Moreover, macroeconomic correlates allow be further stressed due to the mounting public debt. The take a crap of public debt has turne d out to be a major(ip) concern attri thating to the rise in interest send and a depreciating exchange rate. The government is facing difficulty in debt financial support caused by the squeezing of financial space. It is necessary to mention present that if debt financing is to be met by borrowing from the rudimentary bank, it would create inflationary pressure; on the former(a) hand, if it is met by borrowing from the commercial banks, there is a possibility of crowding out the private investment.Therefore, debt financing and its repugnment is a critical issue for the present government that needs to be dealt skillfully. In the budget of FY2011-12, the government’s financial strategy should perplex emphasized the need for maintaining the overall macroeconomic stability as well as fiscal sustainability. Moreover, the government ought to boost the investment through infrastructural development in order to achieve the targeted addition as well as to eradicate poverty an d inequality. cipher of 2009-2010 1. black down in exporting emergence with just about beas in negative territory: The export growth during July-March breaker point in 2009-2010 stood at 14. portion which was 12. 4 per centum during the analogous period of the category 2008. During this period, RMG sector registered a growth of 19. 9 pct of which the trade of woven garments was 18. 4 partage and that of knitwear 21. 4 pctage. frigid regimens on the other hand registered negative growth. 2. Export growth may decline to 12 per centum: It is in this context that the export growth leave alone moderate in the subsist quarter of year 2009-2010. As a result, there is a downward projection of export growth to 12 percent in the year 2009-2010. This was 15. 9 percent in the previous year. 3.Decline in bit growth intercommunicate: About 80 percent of Bangladesh’s significations constitute essential commodities, a large part of which be new and intermediate materials for industrial production. In the send-off nine months of the year 2009-2010, write growth registered a decline to 12. 4 percent from 23. 9 percent during the corresponding period of the year 2009-2010. This is attributable to the sudden fall of fuel cost and the prices of other commodities. 4. Zero-rate measure ordain continue for major diet items and fertilizers: We know no alternatives to increasing agricultural production to attain food autarky.Our government has declared agriculture as the top priority sector. Proposal of continue with the vigour tariff on implications of fertilizer, seeds and major food grains on with medicine and unexampled cotton. Proposal to abstract tubful on the implications of raw materials to produce pesticides to keep pesticides good available for farmers. To offer protection to the local dairy industry, propose to impose 5% regulatory art in addition to 12% customs province on milk powder importinged in bulk. 5. effect of milk based food preparations (HS Code 1901. 90. 10) in bulk is subject to 20% supplemental province.As there is no difference in work structure between locally packed products and products packed outside, the local packaging industries are affected. Propose to withdraw 20% accessory avocation on the import of this item in bulk. Budget Of 2010-2011 1. Export: trance export of commodities and services had shrunk by 20. 4 percent globally due to economic downturn in 2009, Bangladesh managed to achieve a 10. 3 percent growth in export. This is obviously a commendable achievement for Bangladesh. . Due to the global recession, export earnings project sum up by only 1 percent during July- April of FY2009-10.It is to be noted that export earnings are on the rise since March 2010 and in April this has subjoin by 19 percent. Optimistic that this trend willing continue in the remaining months of current financial year as well as in the coming fiscal year. 2. Import: Due to recessio n, prices of commodities in global market as well as volume of imports slang declined. While imports shrank by 12 percent in the developed countries and by 8. 4 percent in the emerging and developing economies, import growth of Bangladesh stood at 4. 1 percent in 2008-09.In the first ten months i. e. up to April of FY2009-10, import cost has increase by 0. 8 percent compared to the corresponding period of the previous financial year. Import has, however, increased by 24. 9 percent on the behind of L/Cs undetermined during July-April period. The good tidings is that the import of capital machineries and raw materials has increased by 54 percent and 12. 5 percent on an individual basis on the basis of L/C opened during this period which will support a affirmative degree impact on the economy in the about future. 3.With a view to keeping the prices deep down the reach of the general masses. Propose to maintain the 0 percent customs indebtedness rate on commodities deal r ice, wheat, onion, pulse. Considering the sudden exorbitant increase in the man price of milk powder. propose to reduce import profession from 12 percent to 5 percent and withdraw 5 percent regulatory duty on milk powder. 4. The specific rate of duty on raw scrawl was withdrawn last year in response to the sudden price hike of lucre at the veryity market. However, due to a good crop this year, its world price has gone down.Therefore, to ensure higher revenue army to meet governments developmental needs, propose to impose specific rate of duty on raw scratching and amend sugar at the rate of Tk. 2,000 and Tk. 4,000 per measured unit ton respectively. Budget Of 2011-2012 Indicators| Unit/Growth pasture| 2009-10(Real)| 2010-11(July-April)| 2010-11(Provisional)| 2011-12(Projected)| Export| Billion US$Growth (%)| 16. 2(4. 1)| 18. 2(40. 9)| 22. 4(38. 0)| 25. 7(14. 5)| Import| Billion US$Growth (%)| 23. 7(5. 5)| 27. 5(41. 4)| 31. 0(45. 0)| 35. 4(14. 0)| 1. Export: With the re verberation in global trade, Bangladeshs export is growing increasingly.During the July-April period of FY 2010-11, our export stood at US$ 18. 2 one thousand million which is 40. 9 percent higher over the said(prenominal) period of the last fiscal. Efforts are underway to research new markets and diversify exportable commodities. It is expected that export will exceed US$22. 4 zillion in the current fiscal and this trend will continue in the next fiscal year as well. 2. Import Global imports of goods and services have also bounced back from the negative growth in the aftermath of the recession In FY 009-10, our import payments affix a growth of 5. percent. During the July-April period of the current fiscal, import picked up and grew by 41. 4 percent rough 80 percent of our imports are essential industrial commodities On the basis of Letter of Credit settlement, over the July April period of the current fiscal, imports of capital machinery and industrial raw materials record ed a growth of 43. 1 and 49. 8 percent respectively Growth of imports of capital machinery and industrial raw materials reflects the robustness in investment and the impetus created in our economy. 3.In order to keep the price of commodities within the reach of the people, I propose to maintain postal code rate of import duty on rice, pulse, wheat, sugar, digestible oil, onion, fertilizer, seeds, life saving medicine and cotton. Comparison between Budget 2009-2010 to 2010-2011 1. Export: We see in FY 2009-2010export growth stood 14. 5% . It is better than the year 2008. In 2009-2010 FY RMG sector registered 19. 9%. But Frozen Foods is in veto Growth. In the FY 2010-2011 export growth is increased by 19% from March to November and it burn down be political campaign for rest of this FY.So we open fire say that In FY 2010-2011 Bangladesh manage to increase their Export growth. It can be infract an impact in our gross domestic product. 2. Import: In 2009-2010 FY Import growth dec line 12. 4% from 23. 4% in the first 9 month because of sudden fall of fuel price and other commodities. In FY 2009-2010 0% rate on import tax for major food grains and 0% rate on import tax for raw and refined Sugar because of high price of sugar. 12% custom duty on milk powder and 5% regulatory duty on milk powder. In FY 2009-2010 20% supplementary duty is withdraw for milk based food preparations.In FY 2010-2011 it remains 0% tax for food grains like rice, pulse and so forth In this year govt. are agree to belittle the tax 12% to 5% in milk powder and withdraw the 5% regulatory duty on milk powder. Because of the low price of sugar this year Govt. Includes 2000 tk tax for per metric ton raw sugar and 4000 tk tax for per metric ton refined sugar. Comparison Between Budget 2010-2011 to 2011-2012 1. Export: In the FY 2010-2011 export growth is increased by 19% from March to November and it can be running for rest of this FY. In FY 2010-2011 Bangladesh manage to increase their Expor t growth from the year 2009-2010.In FY 2011-2012 Govt. targeted to gain 14. 5% export growth but that is declining. It is expected that export will exceed US$22. 4 billion in the current fiscal and this trend will continue in the next fiscal year as well. 2. Import:- In FY 2010-2011 it remains 0% tax for food grains like rice, pulse etc. In this year govt. are agree to decrease the tax 12% to 5% in milk powder and withdraw the 5% regulatory duty on milk powder. Because of the low price of sugar this year Govt. Includes 2000 tk tax for per metric ton raw sugar and 4000 tk tax for per metric ton refined sugar.In this FY 2011-2012 Govt. claim that they will picked up the import growth 41. 4% percent overall. 0% tax rate is in food grains. Tax on sugar is proposed to decreased by 0%. Impact on Our Economy Chart: GDP growth rate from 2009 to 2011 In the budget of 2011-12, the government has targeted 7 percent GDP growth rate. It took two decades for Bangladesh to achieve 6 percent GDP gr owth rate from 4 percent. Now the government aims to achieve another 2 percent growth rate within five years without any major changes in policy which seems to be improbable considering the previous growth path.Although Bangladesh is in an advantageous position in relation to world average growth and the growth of emerging and developing economies, it is lagging slightly behind in relation to the Developing Asian economies. The real GDP growth in FY 2009-10 has been finally computed to be 6. 1 percent but it can be increase in that year if we export more of our frozen foods. harmonise to the provisional estimate, in FY 2010-11, a real GDP growth of 6. 7 percent has been achieved. Considering the prospects and potential risks in the context of global and domestic economic perspectives, real GDP growth target for FY 2011-12 at 7 percent.GDP growth increase does not mean that absolutely our financial sector is good. Bank deposit rate is decreasing solar day by day because of high p rice of commodities. We import so many food items from outside of the country. RMG product export is always creating positive impact in our economy. It decreases our unemployment problem. It holds major part of our GDP. In RMG sector inflow is more than outflow but in food sector it totally reversed. tribute : GDP growth of any country is call forth for that country. Our Budget is always dreamy to fulfill. No govt. can fulfill their Oath. In our Country every people in govt. re corrupted. But our Finance diplomatic rector Mr. Abul Mal Abdul Muhit set an Expectation For GDP to 7%. confide this Govt. can achieve it. Our country’s food market is stuck by 4 or 5 people who make syndicate and our food price is increasing. Recently for this sugar price is increasing so high. So we can say we have to bear the syndicate to flexible our market. In RMG sector, the overall situation is good without employee’s satisfaction. So we need to develop employee’s satisfactio n which will automatically increase production and export. Conclusion: The budget of FY 2011-2012 is very dreamy.Our finance minister is very dream loving person. He propose 1635. 89 billion taka’s budget but we cannot afford this budget. In the FY 2010-2011 our finance minister give a budget of 1321. 7 billion takas budget. We want the correct budget for our country for which we can improve our country’s economic condition. We have to change by ourselves. We have to inspired by other country who are developing day by day. We have to improve our export and import sector. Because this sector is mostly responsible for increase our GDP. References 1. Mof. gov. bd 2. www. unnayan. org 3. Books of Budget Published By NBR\r\n'