Business Bulletin (June 03, 2018; Number: 60)

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1 Dear Sir/Madam, The Bangladesh Rating Agency Limited (BDRAL) is pleased to bring to you the Business Bulletin for the month ended in May 31, The bulletin tracks the month s key events and trends in the commodity and currency markets along with a round-up of regional and global news. We hope you enjoy reading this issue and look forward to your comments/suggestions. Thank you. Best regards, The Bangladesh Rating Agency TEAM Business Bulletin (June 03, 2018; Number: 60) Inflation Dips Slightly in April The point-to-point inflation of the month April, current fiscal (FY18) dropped by 0.05 percentage points compared to that of the previous month of March, showed official data. According to Bangladesh Bureau of Statistic (BBS) data, unveiled on 8 May 2018, showed that the p-t-p inflation decreased to 5.63% in April compared to 5.68% recorded in March, The data also showed that the p-t-p inflation rate in April of last fiscal (FY17) was recorded even lower at 5.47%. Emerging from the Executive Committee of the National Economic Council (ECNEC) meeting, Planning Minister Mr. AHM Mustafa Kamal unveiled the quarterly data of the inflation. BBS showed that the (p-t-p) inflations in both food and non-food have also dropped. The food inflation was recorded at 7.03% in April compared to 7.09% in the previous month. The non-food inflation also fell to 3.49% last month from that of 3.51% in March. The inflation in both urban and rural areas of the country has also dropped in April. Rural areas inflation decreased to 5.59% in April, which was 5.63% in March. In the urban areas inflation dropped to 5.70% in April from 5.76% of the previous month. INFLATION TRENDS in %, SOURCE: BBS Stock Market Indices Index 31-May May-18 Change DSEX % CSCX % Currency Market Pair 31-May May-18 Change BDT/USD % GBP/USD % EUR/USD % JPY/USD % Commodities 31-May May-18 Brent (US$/bbl) Gold (US$/troy ounce; LBMA) Copper (US$/tonne; LME) Aluminium (US$/tonne; LME) Please follow the below link to get the pdf version of the bulletin for previous month: Credit Rating Section What is SME Credit Rating? SMEs are an important source of investment, employment, entrepreneurship and innovation. A vibrant SME sector leads to a vibrant economy. However, in developing countries, SMEs find it difficult to access finance, even at a high cost.

2 Exports Climb on Apparel Boost Exports grew 7.11% (y-o-y) to $2.95 billion in April riding on the higher shipment of garment items. Although the receipt is 0.51% higher than the monthly target of $2.94 billion. Overall, exports rose 6.41% (y-o-y) to $30.40 billion in the July-April period. Garments exports grew 9.37% (y-o-y) to $25.30 billion in the first 10 months of the fiscal year. Knitwear exports rose 11.43% to $12.54 billion and woven garments exports were up 7.42% to $12.76 billion. On 9 May 2018, the interbank exchange rate was Tk per US dollar, up from Tk a year earlier, according to BB. Frozen and live fish exports grew 2.32% to $ Shipment of agricultural products was up 16.77% to $ million. Cement, salt and stone fetched $11.08 million, up 33.01%, and pharmaceuticals brought home $85.96 million, an increase of 14.84%. Cotton, cotton products, and yarn exports went up by 19.01% to $ million. In July-April, jute and jute goods fetched $ million, up 7.66%. Home textile export rose 13.07% to $ million, footwear 5.29% to $ million and furniture 21.86% to million. Exports of plastic goods fell 19.92% to $81.19 million in July-April. Leather and leather goods sector, the second largest export earner after garments, fetched $ million in the 10-month period, down 10.02%. EXPORT EARNINGS in billions of dollar SOURCE: EPB Jul'17 Aug Sep Oct Nov Dec Jan'18 Feb Mar Apr Banks Waive Huge Interest Interest waivers against bad loans more than doubled to Tk 1,753 crore in 2017, with National Bank alone accounting for 37.13% of the sum. Of the banks that offer the facility to defaulters, National Bank, which topped the list for loan rescheduling last year, was on the top of the list as well. It is followed by Bangladesh Krishi Bank (Tk crore), Rupali Bank (Tk 184 crore), Social Islami Bank (Tk crore) and Sonali Bank (Tk crore). Banks were allowed to give exemption to borrowers in line with the central bank directives but such facilities were usually managed by the wilful defaulters, said a BB official. Private banks waived interest of Tk 1,234 crore last year, up from Tk 451 crore a year earlier, according to data from the BB. Interest waived by the six state-owned banks Sonali, Janata, Agrani, Rupali, BASIC and Bangladesh Development Bank soared 61% (y-o-y) to Tk 319 crore last year. The two specialised banks, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank, waived interest of Tk 194 crore last year, up 78.27% from a year earlier. Interest waived by the nine foreign banks increased 4.45% to Tk 6.80 crore in In Bangladesh, about 90% of private-sector businesses are SMEs. They contribute between 80 to 85% of industrial employment and 23% of total civilian employment. To progress further, the SMEs need to attract talent, get international visibility and easier access to finance. The stumbling block is a lack of transparency and trust. All these lead to the need for a Credit Rating System. SME Credit Rating is a comprehensive and independent third-party evaluation of the SME. It takes into account the financial position and several qualitative parameters of the SME that have a bearing on the creditworthiness of the entity. It conveys the probability of the subjects ability to pay back a loan or obligation to the lender or the investor. BDRAL and Bangladesh Bank have jointly developed a rating methodology for the SME which is also followed by SMERA Ratings Limited in India with whom we have technical collaboration. Why SME Credit Rating? Adequate credit flow to SMEs helps in driving the overall growth of the economy. Banks and Financial Institutions in Bangladesh receive support in SME financing initiatives from Bangladesh Bank, Government of Bangladesh and development partners like IDA, ADB and JICA. But, the Banks & Financial Institutions (FIs) are compelled to depend on non-core skill-sets leading to assumptions based accounting and increased dependence on inconsistent Data Collection. The absence of industry benchmarks, inadequate industry understanding and an irregular system of monitoring combine to increase the problems. The resulting Market Gap calls for an experienced and competent SME rating agency, which can deliver detailed credit Rating Report with scoring/rating, research assistance on SME cluster, overall sector based studies and Product Portfolio Guide (PPG) on all SME banking products. Banks and other financiers need tools to assess credit risk for SMEs in a scientific manner. In the developing world, subsidies or interest rate and tax concessions have not succeeded in building a strong and transparent SME sector.

3 Banks waived most interest in 2017 in tk (cr) SOURCE: BB 651 An international Credit Rating Agency brings in globally recognized research and benchmarks, supports financial innovation and deepens the credit culture and risk management in the Bangladesh SME sector. Thus, addressing the stumbling block which is lack of transparency and trust. All these lead to the need for a Credit Rating System National BKB Rupali SIBL Sonali Country News BDRAL News Current activities of our research department: Publications: SMEs of Bangladesh Training Program Cluster Analysis Customized Research Monthly Business Bulletin Quality Data Collection Secondary Research Bangladesh's current account deficit recorded an all-time high of $7.08 billion in the first nine months of the fiscal year as the country's capacity to export is failing to keep up with the appetite for imports. At this point last fiscal year, the deficit was $1.37 billion. In July-March, imports surged 24.50% (y-o-y) whereas exports grew 6.98%. In July-March of , remittance posted 16.42% growth from a year earlier, but it is not sufficient considering the large import payments, according to the central banker. The trade deficit widened by 87.55% (y-o-y) to $13.20 billion in the first nine months of the fiscal year, according to data from the BB. The government should take immediate measures to boost the export earnings in order to narrow both the trade deficit and the current account, another BB official said. Private sector credit growth saw a dramatic fall in April as banks put the brakes on their lending activities to adjust their loan-deposit ratio ceiling as per the central bank's instruction. Last month, credit growth stood at 13.6%, down 4.33 percentage points from the previous month, according to data from the central bank. The growth rate was far below the monetary target of 16.3% set for the second half of the fiscal year and a stark contrast to the preceding nine months. At the end of April, total outstanding private sector credit stood at Tk 8.81 lakh crore. In January, Bangladesh Bank instructed banks to bring down their loan-deposit ratio to 83.5% by June this year to curb aggressive lending. The interest rate on industrial loans went up to 16% in recent months, up 4% from last year, according to different banks. The inter-bank exchange rate of dollar increased Tk 3.20 this year and stood at Tk on May 31, according to BB. Meanwhile, public sector credit growth continues to flit in the negative territory: in April it was 20.63% in the negative, way off the central bank target of 8.30% set for June. BB recognizes BDRAL as a specialized rating agency to have a partial access to the CIB Information of the SME borrowers through banks/fis for the sake of calculating Default Matrix & Transition Matrix and also bank relationship risk measurement- as indicated by BB in its Credit Rating Methodology for SME enterprise. The Bangladesh Rating Agency Limited (BDRAL) signed a MoU with Bangladesh University of Business & Technology (BUBT) for academic cooperation between the institutions to promote entrepreneurship and development of the small and medium enterprises (SME) through resource sharing by holding joint seminars, workshops and training programs, including facilitating internships and placement opportunities for the BUBT students. Prof. Md. Abu Saleh, Vice Chancellor of BUBT and Mr. Sayed Javed Ahmad, CEO of BDRAL signed the memorandum of understanding on behalf of their respective institutions. Prof. Dr. Md. Harun-ur-Rashid, Registrar; Prof. Dr. Syed Masud Hosain, Dean, Faculty of Business and Mr. Md. Masudur Rahman, Director, Career Guidance along with few other officials of BUBT were also present in the signing ceremony. BDRAL CEO s Interview with ICE Business Times (December, 2015): Get Rated, Get Recognized

4 Country s merchandise trade gap with the rest of the world crossed $13 billion in the first nine months of the current fiscal year. Latest statistics, released by the central bank, showed that deficit in merchandise trade stood at $13.20 billion in July-March period of FY18. The amount was $7.04 billion in the same period of the past fiscal year. Thus trade deficit registered 87.5% growth during the period under review. The Bangladesh Bank data also showed that exports registered around 7.0% growth in the first nine months of the current fiscal year while imports surged by 24.50% in the same period. The central bank has asked the five state-owned commercial banks (SoCBs) to submit their action plans as early as possible to improve financial health through reducing the volume of classified loans. The instruction was given at a meeting held at the Bangladesh Bank (BB) headquarters in the capital on Monday to review the memorandums of understanding (MoUs) of the five SoCBs - Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank and BASIC Bank. Recovery of classified loans through strengthening recovery drives along with the mechanism to improve capital shortfall by the end of this calendar year will be included in the plan, meeting sources said. The total amount of NPLs with six SoCBs rose to Tk billion as on December 31, 2017 from Tk billion a year before. It was Tk billion in the Q3 of The SoCBs have also been advised to be more careful in case of borrower selection and exercise due diligence while sanctioning fresh loans. The overall capital shortfall of the four SoCBs out of six rose to Tk billion as on December 31, 2017 from Tk billion three months before. The NBR plans to fully automate the tax collection system by making use of electronic cash register mandatory for businesses in a year, its chief said on 8 May 2018.The vendors will have to purchase the machines on their own as it would be difficult for the tax administrator to take the load, said Mr. Mosharraf Hossain Bhuiyan, chairman of the National Board of Revenue (NBR).The automation of the tax collection is needed, as many persons and businesses with taxable incomes are still there to be brought under the tax net, Mr. Hossain added. The NBR chief said he would formulate stringent rules to make ECR mandatory.theuse of the cash register was made mandatory in 2007 and 2008, but there was laxity. In the next fiscal year, an additional Tk 70,000 crore would be needed to implement the budget. The NBR chief called for raising the contribution of the industrial sector to 35% from the current 29%. Shenzhen Stock Exchange (SZSE) and Shanghai Stock Exchange (SSE) has become the strategic partner of The Dhaka Stock Exchange. The Chinese consortium, which will ink the deal to purchase 25% stake in the DSE on 14 May 2018, has offered to share an array of technical products and services covering all aspects of the stock exchange business. The consortium has offered to assist in mapping the information disclosure process for issuers at the DSE and share its expertise in designing an electronic information disclosure system. The platform would provide corporate BDRAL CEO s interview with Bangladesh Apparel Online: To know more about Bangladesh Rating Agency Limited - visit Our Head Office: Address: The Bangladesh Rating Agency Limited, 47 Karwan Bazar, LatifTower(12th Floor), Dhaka-1215, Bangladesh; Telephone (PABX): , Direct lines: Accounts and Billing: Client Care: General Inquiries : info@bdral.com Accounts & Billing: credit.control@bdral.com Customer Care: client.care@bdral.com Notice While we endeavor to ensure accuracy of information, we do not accept any responsibility for any loss or damage to any person resulting from it. To unsubscribeplease write to businessbulletin@bdral.com with Unsubscribe in the subject line Warning! Counterfeit BDRAL Reports! It has come to our attention that, some companies are submitting fake BDRAL credit rating reports to different banks for bank loans. Therefore, bankers are requested to cross check the validity of the reports with the BDRAL Client Care service, either by calling at or by at client.care@bdral.com. All our reports contain contact information of the analysts who worked on the report preparation and we maintain a specific format. So, please verify the reports if anything looks unfamiliar and appears doubtful. We appreciate your continuous support.

5 information of the issuing companies, simple analytical tools, interactive question and answer facility and online complaint portal with a view to enhancing transparency and corporate governance. At present, the DSE has only companies that are attractive to foreign investors, said Mr. Abu Ahmed, former chairman of the Dhaka University's economics department and a stockmarket expert. Deposit collection through agent banking rose % (y-oy) to Tk 1,633 crore in the January-March quarter this year. It reached Tk 1,399 crore in the previous quarter, according to Bangladesh Bank data. The number of accounts with the 16 banks now offering agent banking services stood at lakh as of March this year, up from lakh three months earlier. At the end of the first quarter of this year, the total number of agents rose to 3,216, up 24.79% from what was three months ago. The central bank issued an agent banking guideline in 2013 but the licensees started full-fledged operations in Agent banking offers limited banking and financial services to the underserved population by way of village variety stores. The other banks now running agent banking services include Al-Arafah Islami, Social Islami,Modhumoti, Mutual Trust, NRB Commercial, Standard, Agrani, Midland, City, Islami Bank Bangladesh and AB. Net inflow of Foreign Direct Investment (FDI) from India to Bangladesh rose by 44.76% in the past year, central bank statistics showed. The Bangladesh Bank data showed that the FDI from the neighbouring country in net terms stood at $ million in 2017, which was $79.2 million in the previous year. This is the highest amount of FDI from India in a single year. Earlier in 2015, foreign investment from India crossed $100 million for the first time and reached $ million. Gross inflow of FDI from India was, however, $ million in the past year. The BB data also showed that around one-sixth of the India FDI was injected to the banking sector. On the other hand, net inflow of foreign direct investment (FDI) from the United States of America (USA) to Bangladesh dropped by 23.50% in Latest statistics, released by Bangladesh Bank, showed that net inflow of FDI from the US declined to $ million in the past year, which was $ million in The Bangladesh Taka (BDT) has fallen considerably against the US dollar as the demand for the greenback grew to meet import payment requirements. The local currency weakened by 50 poisha in a single day in the inter-bank foreign exchange (forex) market on 15 May 2018, according to traders. The US dollar was quoted at Tk each in the inter-bank forex market on the day against Tk of the previous working day, they said. The exchange rate of the US dollar rose to maximum Tk for sale of Bill for Collection (BC) selling for importers on the day from maximum Tk of the previous working day. The BDT may get weakened against the US dollar for remitters and exporters in the coming days after such weakening, the treasury official said. It has sold $ 2.04 billion since July 01 of the fiscal year to the commercial banks as part of its ongoing support, according to BB's latest data. The demand for the US dollar is

6 gradually increasing, mainly due to higher import payment pressure, particularly of capital machinery, petroleum products and food items, traders said. The government approved the draft gold policy, as it will make the import of the precious metal easier. The cabinet committee on economic affairs gave its nod to the Gold Policy, 2018 at a meeting at the cabinet division chaired by Finance Minister Mr. AMA Muhith. According to the policy, the country's annual demand for gold ranges between 20 tonnes and 40 tonnes. Almost 80% of the demand is met with smuggled gold and the rest from recycled gold, depriving the government of a huge amount of tax. In 2016, the total export of gold ornaments was $638 billion across the globe. Of the amount, India's share was about $42 billion. Bangladesh exported gold ornaments worth only $672. To ease gold import, 11 measures have been laid out in the policy. The BB will appoint the dealers, who may be an authorized bank, an individual-owned firm, a joint venture or a limited company. The BB will also formulate a guideline for the dealers. The BB will set up a central information bureau that will keep data on the annual demand for gold, its local trade, import and export, revenue collection, seizure of gold and its sale on auction, and all other relevant data. SME News The Small & Medium Enterprise (SME) Foundation proposed withdrawal of VAT from 12 items including manually baked bread, biscuit, cake, and handicrafts. SME Foundation revealed the proposal at a press conference following a pre-budget discussion at SME Foundation office in Dhaka on 7 May SME Foundation adviser Mr. Shahab Uddin said more than three hundred proposals came from entrepreneurs. From them, 43 proposals have been sent to National Board of Revenue (NBR). Mr. Shahab Uddin also proposed withdrawal VAT from capital machinery of agro-based processing industry, polycarbonate, polymer, decalcomania transfer paper, printing ink of plastic sheet, ethyl acetate, Toluene etc. Mr. Shahab also urged to increase VAT on some products like electrical switch, plug, socket, lamp holder, cable and LED light for saving domestic industries. The Chinese consortium will work to create an SME-based board in the Dhaka Stock Exchange so that small entrepreneurs get the opportunity to raise fund from the capital market. It will help to boost the SMEs as well as the capital market, said Mr. Wang Jianjun, president and chief executive officer of Shenzhen Stock Exchange (SZSE). The consortium of SZSE and Shanghai Stock Exchange will emphasise innovation and product diversification so that investors can get a variety of options to put their money in. Only 20% of the Chinese SMEs take loans from banks. The rest turn to the capital market to raise funds, Mr. Liu Fuzhong added. In its proposal to the DSE, SZSE has offered to share its experience in market design, information disclosure, supervision, investor suitability management, IPO promotion and other areas of interest for

7 the development of an SME market in Bangladesh. SZSE has developed a financing supply chain for startups by involving venture capital firms, investment banks, smallloan companies, banks and other financial intermediaries. The government should establish a dedicated bank for small and medium-sized enterprises (SMEs) to provide hassle-free financial services for the entrepreneurs, speakers at a discussion said on 7 May Also, easy access to lowcost funds, more budgetary allocations for research and development, a long-term roadmap and tax exemption facility for the startups are needed to boost the SME sector, they said. The Foundation has proposed lowering taxes for 12 categories of products, including polycarbonate used for electronic goods, polymer for plastic goods, and decalcomania transfer paper for melamine utensils and machinery for agro-processing, to help the entrepreneurs. The SME Foundation organised the discussion on 'SMEfriendly budget proposals' at its headquarters in the city to brief reporters on the 43-point budget proposal it submitted to the National Board of Revenue (NBR) on 6 May International News Britain's annual inflation rate eased in April to 2.4%, the lowest level since March 2017, official data showed on 23 May 2018, weighing on the pound. The Consumer Prices Index 12- month rate had stood at 2.5% in March, the Office for National Statistics said in a statement. Analysts had expected the rate to remain unchanged last month, but it was helped lower by cheaper air fares, the ONS added. With inflation falling in recent months and Britain's economic growth suffering a sharp slowdown in the first quarter amid tough Brexit talks, the Bank of England decided against raising its key interest rate earlier this month. But with oil prices on the rise and the pound weakening, inflation risks picking up again in the coming months. The Bank of England looks set to keep interest rates on ice this week, capping a sharp swing in the outlook for the British central bank, which might now struggle to convince investors that it will raise borrowing costs at all this year. Unexpectedly weak economic data and cautious remarks from Mr. Governor Mark Carney have dashed what looked like nearcertain expectations of a rate increase until a few weeks ago. Since he joined the BoE in 2013, Carney has signalled several times that rates were likely to rise, only for economic data to go the wrong way, according to a Reuters report on 13 May With the prospects for Britain s economy unclear and the terms of Britain s departure from the European Union far from settled. The biggest challenge will be to keep the prospect of a further rate rise this year credible in the eyes of investors, who feel wrong-footed by a slowdown in the economy that may well prove temporary and by the BoE s shifting guidance. The eurozone economic growth slowed in the first quarter of Economists said some temporary factors help explain the slowdown and surveys suggested that growth will pick

8 back up. Seasonally adjusted Gross Domestic Product (GDP) of the euro area rose by 0.4% in the first q-o-q, slower than the growth rate of 0.7% in the previous month, according to a preliminary flash estimate published by Eurostat, the European Union s statistical agency. Temporary factors help to explain the slowdown in euro-zone GDP growth in Q1 and surveys suggest that growth will pick back up, said Mr. Stephen Brown, the European economist from Capitale Eonomics. This underscores our forecast for annual growth to slow only slightly this year from 2017 s 2.4% to 2.3%, said Mr. Brown. Eurostat figure showed that eurozone GDP rose by 2.5% in first quarter compared with the same quarter of 2017, also slowed down from the rate of 2.8% in the previous quarter. France's economy grew 2.2% in 2017, according to revised figures published on 15 May National statistics office INSEE revised its growth for last year up from 2.0%, while revising down the public debt ratio by a slight 0.2% to 96.8%. Inflation was steady in April at 1.6%, supported by a rise in energy prices, INSEE said. The eurozone's second biggest economy added 57,900 private sector jobs in the first quarter of 2018 growth of 0.3%, representing a slight slowdown from the end of 2017, according to INSEE's preliminary estimates. The United Arab Emirates has announced plans to allow 100% ownership and visa incentives to foreigners, in a bid to attract investors to boost its slowing national economy. The decision, taken by the UAE cabinet on 20 May 2018, aims to lure "international investments and exceptional talent", according to Dubai ruler Mr. Sheikh Mohammed bin Rashed Al-Maktoum. The new measures come amid signs of an economic slowdown in the oil-rich Gulf state on the back of lower oil prices, with reports showing the vital real estate and tourism sectors of Dubai struggling. The decision will allow foreign investors 100% ownership of companies, coupled with 10-year residence permits for them and their families, according to a cabinet statement cited by WAM news agency. The measures will come into force by the end of 2018, the statement said. The International Monetary Fund earlier projected that UAE economic growth would fall from 3.0% in 2016 to 1.3% in A series of measures from the Reserve Bank of India (RBI) to lure foreign buyers into the country's short-term debt market could easily backfire, investors fear, exposing the economy to volatile hot money flows. The RBI lifted a restriction limiting foreign investors to buying bonds with three years or more to maturity and also gave them access to short-term sovereign treasury bills. The RBI's lifting of the maturity restriction came after India's government bonds tanked when sovereign bond auctions failed to attract many buyers, followed by a spike in yields when surprisingly hawkish minutes of a monetary policy meeting raised fears of the RBI hiking interest rates. The rupee has fallen by 4.8% so far this year, weakening as much as to to the dollar on 7 May 2018, its lowest level since February With India importing 80% of its oil requirements, crude prices will be a key factor determining the country's current account, rupee

9 and inflation risks. India needs robust dollar inflows to help bridge its widening current account deficit and support the steep fall in the currency. Profits earned by Chinese industrial firms in April rose at their fastest pace in six months, data from the National Bureau of Statistics (NBS) showed on 28 May Profits in April rose 21.9% (y-o-y) to 576 billion yuan ($90.14 billion), the quickest since October, bringing gains for the first four months of 2018 to 15%. The data suggests China's industrial sector is still seeing solid growth momentum despite curbs on pollution and rocky trade relations with the United States. In the first four months of 2017, profits rose 24.4%. China's producer price inflation picked up to 3.4% in April from March but was much lower than 6.4% in the year-ago period. But earnings in the computer and telecommunications sector fell 5.3% over the four months, though that was a slight improvement from an 11% decline in the first quarter. Liabilities of industrial firms rose 6.1% (y-o-y) as of end- April, according to the statistics bureau. Profits at China's state-owned firms rose 26.2% to 627 billion yuan for Jan- April, compared with a 23.1% rise in the first quarter. The data includes companies with annual revenues of more than 20 million yuan ($3.13 million) from their main operations. Japan s exports likely grew 8.1% in April from a year ago, accelerating from a 2.1% rise in March, thanks to solid global demand, a Reuters poll showed on 18 May The exports are expected to have risen for a 17th straight month in the previous month, supported by shipments of autos and capital goods such as machinery, according to the poll of 16 economists. Imports of the third-largest economic country were expected to rise 9.6% in April from a year earlier after oil price gains drove up import costs, the poll showed. The trade surplus for the previous month was seen at billion yen ($3.66 billion), reports Reuters. Japan s economy shrank an annualised 0.6% in January-March, the first contraction in nine quarters, led by declines in investment and consumption as well as weaker export growth. Sri Lanka is headed for a debt crisis, the finance ministry warned on 20 May 2018, blaming a series of costly projects commissioned by the previous government for record-high repayments. Finance Minister Mr. Mangala Samaraweera said payments of capital and interest would reach $2.84 billion this year, mostly to repay loans for extravagant projects under former president Mr. Mahinda Rajapakse. The government sharply raised domestic fuel prices earlier this month following pressure from the IMF and its central bank to reduce the burden of heavy subsidies on its struggling economy. The IMF has said it will only release the next tranche of its bailout if the country adjusts fuel prices based on the cost of production. The economy has been on the mend since the IMF bailout was approved but the 3.1% growth figure for 2017 was slower than expected. Bank Indonesia (BI), the central bank of the largest economic country in Southeast Asia, has predicted 5.15% economic growth in the Q2. The economic growth in the second quarter

10 this year may reach up to 5.15% on the back of rising consumption, Indonesian central bank governor said on 25 May The bank said the rising consumption was prompted by the upcoming distribution of Idul Fitri bonus and extra annual salary for civil servants, military, police and state retirees, reports Xinhua. BI Governor Perry Warjiyo said the Q2 growth projection was higher than 5.06% attained in the Q1 and in the same period in 2017 that stood at 5.01%. The consumption surge during the holiday season would be facilitated by mild annual inflation that stood at 3.41% by April this year, holding back the prices of staple needs from increasing steeply during the festivity season, BI Governor said. The government has allocated some trillion rupiah (about $2.50 billion) for the civil servants, military, police and state retirees bonus and extra salary, which would be distributed in early June and July this year. Indonesia has set target to see 5.4% growth in 2018, slightly higher than last year s 5.07% target BDRAL Photo News The Bangladesh Rating Agency Ltd. Better Insight Better Business