Bangladesh’s gross domestic product (GDP) is expected to grow by 6.9 per cent in fiscal year (FY) 2022, according to the latest Asian Development Bank (ADB) flagship report Asian Development Outlook (ADO) 2022 released on Wednesday.
The growth forecast reflects a rebound in external trade and recovery in domestic economic activities fuelled by the implementation of stimulus packages and increased remittance. Inflation is expected to increase to 6.0 per cent in FY2022 from 5.6 per cent in 2021.
The current account deficit is likely to widen from 0.9 per cent of GDP in FY 2021 to 2.7 per cent of GDP in FY2022 on the increase in imports and a decline in remittance growth.
The main risk to this growth projection is higher prices for oil and imports, and the loss of export sales beyond those built in the present forecasts, mainly due to the Russian offensive of Ukraine.
“The ongoing socio-economic recovery needs to be accelerated by enhancing domestic resource mobilisation, incentivising the private sector to create products and services, promoting modern green technologies, and fostering knowledge and innovation,” said ADB Bangladesh Country Director Edimon Ginting.
“Building climate-resilient infrastructure and services, introducing a carbon tax on fossil fuels, and promoting green investments will help to further advance the current policy initiatives for managing climate change for inclusive and sustainable green growth,” Ginting added.
The ADO 2022 says that private investment will get stronger, reflecting solid growth in private sector credit and imports of industrial raw materials and capital goods. With large available funding, public investment will increase to support the implementation of priority large infrastructure projects.
Growth in private consumption, however, may be affected by a decline in remittances.
ALSO READ: ADB trims Asia growth forecast as price pressures rise
Inflation is expected to reach 6.0 per cent in FY2022from 5.6 per cent in FY2021 as price pressures are increasing from an upward adjustment in domestic administered fuel prices, rising global food and fuel prices, and implementation of stimulus measures.
The ADO 2022 points out that managing climate change is critical to ensuring inclusive and environmentally sustainable growth. As part of developing a national adaptation plan by the government, a climate risk-informed master plan should be drawn up for each sector and development unit.
The capacity for better accessing and utilising climate risk analysis needs to be mainstreamed in public financial management decisions across government. Enabling policies are necessary for green investments, the development and adoption of green technologies, and for the greening of existing industries.
