Bright signs to shine on

In its year-end review, Standard Chartered Bank gauges economic indicators, mostly bright. The bank predicts that 2010 will be an even more successful year if the ambitious budget, power and infrastructure investments can be implemented.
The listing of Grameenphone shares has galvanised the market. While many participants had feared it might cause overly speculative disruptions, the market has proved more mature than thought. This will encourage more multinational and state-owned enterprises to list on the capital markets.
This is a positive development and is expected to help channel funds to productive sectors in the economy and attract more foreign investment.
By September, there have been signs that output activities should pick up in the second half of the current fiscal year. Growth is still stagnant in the industrial sector, as both import of capital machinery and the disbursement of industrial term loans remain slack.
Also, the overall growth of private sector credit has slowed with a sharp fall in fresh investment initiatives, a lag effect of which will likely be felt in the first quarter of FY10.
However, the investment climate may be improving gradually fuelled by the global recovery with signs of strengthened economic activities in the US and European countries.
Furthermore, the government has announced financial stimulus packages to boost certain priority sectors with special support for the industrial sector. The central bank has also taken measures like relaxing conditions for borrowing, lowering policy interest rates, as well as widening the range of financial assets admissible as collateral to maintain adequate liquidity and credit flow to the markets.
Excess reserves of the banks with Bangladesh Bank have started to decline and interbank call money rates have turned around from their near zero levels.
The government has also been taking significant steps to plug the growing power and energy shortages and develop infrastructure. Steps such as private-public partnership will hopefully attract sufficient investments to lay the foundation for a stronger performance in FY10.
Finally, the economy performed well in 2009, and if the ambitious budget, power and infrastructure investments can be implemented, 2010 will be more successful year.