Slogging through political turmoil

Given the strong performances in past years in the face of a global slowdown, 2013 promised great things for the economy, only to be marred by the protracted political turmoil.
Still, the economy made significant progress in key areas: forex reserves reached a new high, underlying inflation has steadily eased and public debt has declined.
Progress has been made in lowering poorly targeted subsidies, raising development spending, laying the foundation for tax revenue increases, improving public financial and debt management and strengthening financial supervision.
The two-decade trend of poverty reduction continued and good progress has been made towards the country's Millennium Development Goals.
Propelled by a steady increase in remittance, foreign currency reserves hit the $18 billion-mark in December, making it the second highest in South Asia after India.
The rule of thumb is that the minimum reserves should equal three months' import bill, whereas at present the reserve is equal to six months' import bill.
Though the reserves increased, the central bank tactfully managed the exchange rate so that the exporters and expatriate Bangladeshis were not adversely affected and the price of imported goods did not advance and in turn affect inflation.
Inflation in November stood at 7.15 percent, up slightly from 7.14 percent in December 2012, according to data from Bangladesh Bureau of Statistics.
Private sector credit growth, however, marked a historical fall, as political uncertainties curbed the demand for investment, contributing to ample systemic liquidity.
Exports, too, registered a rise in 2013, but of note is the double-digit growth the garment sector registered despite being hit by several setbacks in the course of the year.
The capital market managed to buck the downward trend of the past two years, to end in the black: DSEX, the key index of the Dhaka Stock Exchange, closed off the year with 4,266 points, meaning a gain of 4.3 percent in 2013.

As for GDP growth, the most important indicator of the vigour of the economy, it was expected to hover at 6 percent this calendar year, but the International Monetary Fund (IMF) revised down this growth forecast to 5.5 percent given the disrupting political turmoil.
Looking ahead, the disruptions and uncertainty surrounding the forthcoming elections stand to seriously take off the wheels from the economy.
Export growth is expected to moderate, reflecting the supply disruptions brought about by the political unrest and some modest decline in external demand for the flagship garment products following the recent industrial disasters.
Remittances are expected to decline given the restrictions in some Gulf countries and the political unrest which is delaying the migration process. Private capital outflows are likely to increase with the escalating political turbulence.
Inflation, too, is expected to increase as a result of the non-stop blockades and shutdowns, which are cutting off the urban centres' supply chain.