Building Economic Progress in Bangladesh.pdf

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INTERNATIONAL MONETARY FUND Building Economic Progress in Bangladesh By Misuhiro Furusawa, IMF Deputy Managing director Dhaka University, Bangladesh February 28, 2017 I am honored by this opportunity to speak with the faculty and students of the University of Dhaka. This institution has a rich history that is closely identified with the history of this country. I would like to start today’s conversation with a brief overview of recent global economic developments, including in Asia. After that, I will offer some perspectives on the impressive economic performance of Bangladesh in recent years, and the work of the IMF in your country. Global Outlook In January, we released an updated forecast for the global economy. It was contained in an update World Economic Outlook—our flagship publication on the global economy that is released twice a year, in April and October. Our update projected global growth in 2016 of 3.1 percent. That was the weakest growth rate since 2009, because of a challenging first half last year that reflected difficulties in financial markets. Among the advanced economies, activity rebounded in the United States after that weak first half. But output remained below potential in a number of other advanced economies, especially the euro area. Among the emerging market and developing economies, we saw some signs of a rebound after a weak 2015. The growth rate in China was a bit stronger than expected. But activity was weaker than forecast in some countries, especially those that have been dealing with recessions. Looking ahead, economic activity is expected to accelerate in 2017 and 2018. Our central projection is that global growth will rise to 3.4 percent in 2017, and 3.6 percent in 2018. This improved outlook reflects faster growth in advanced economies and in emerging and developing economies. Growth is projected to remain strongest in emerging and developing Asia. SPEECH
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But there is still reason for caution. We still see downside risks. Uncertainty has risen, in particular about the policies of the new U.S. administration. As these policies become clearer, we may adjust our forecast. China is expected to remain a major driver of global economic developments in the coming year. This reflects an expectation of continued government support for the Chinese economy. But we cannot rule out the risks of a slowdown that could affect other countries. One key risk is rapid credit expansion—particularly government support for inefficient state-owned companies—and the overall accumulation of corporate debts. Risks to the Outlook Let’s take a closer look at some of the other risks that could affect the global outlook. I would like to emphasize that these are only risks. The first is political. I am sure you are very aware of recent developments in advanced economies that reflect discontent with globalization. If this important political trend leads to increased protectionism, there could be implications for productivity and incomes, market sentiments and economic growth.
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