Banking sector plagued by scams: UN
Bangladesh's banking sector has been plagued by financial scams, non-performing loans and poor monitoring, posing a macroeconomic risk, said a United Nations report launched in Bangkok on Monday.
The country's robust growth has been supported by domestic demand, especially large infrastructure projects and new energy sector initiatives, it said.
Remittance flows also started rising with increase in global oil prices, says the Economic and Social Survey of Asia and the Pacific 2018.
The region's robust growth in 2017, forecast to continue this year, gives the scope to meet this objective, it said.
The report advises the region's countries to take advantage of the current favourable economic conditions to address vulnerabilities and enhance resilience, inclusiveness and sustainability of economies. Implementation of several policy initiatives requires mobilising domestic public financial resources and leveraging private capital, the report noted.
According to the report, developing economies were estimated to have sustained a relatively high economic growth rate of 5.8 percent in 2017 compared with 5.4 percent in 2016.
About two thirds of the regional economies, accounting for over 80 percent of the region's GDP, achieved faster economic growth in 2017 than in the previous year.
The recent recovery in global manufacturing, investment and trade is providing a tailwind to the already steady expansion of economic output in the region.
In addition to robust consumption, investment expenditures and trade volumes, which showed lukewarm growth in recent years, showed signs of recovery in 2017.
Firmer global demand and increased public infrastructure outlays supported the uptick in trade and investment.
The report points out that due to robust domestic demand and improved global economic prospects, developing economies in the region are projected to grow by 5.5 percent in 2018 and 2019, with a slight moderation in China offset by a recovery in India and steady performance in the rest of the region.
However, this diagnostic does not imply that there are no risks or challenges.
Potential financial vulnerabilities along with high private and corporate debt, particularly in China and some countries in South-East Asia, declining or low foreign exchange reserves in a few South Asian economies and uncertainty concerning trends in oil prices must be closely monitored.
“With regard to the medium-term outlook, potential economic growth is on a downward trend in several countries owing to population ageing, slower capital accumulation and modest productivity growth,” said UN Under-Secretary-General and ESCAP Executive Secretary Dr Shamshad Akhtar during the launch of Survey 2018.
Simultaneously rapid technological advancements, while promising immense opportunities, are also posing considerable challenges in terms of job polarisation and income and wealth inequalities, Akhtar added.
“The bottom line is that the prospects for mobilising financing for development purposes are promising,” Akhtar concluded.
Comments