Home ›› 03 Oct 2022 ›› Front
The South Asian economy including Bangladesh is expected to grow 4.9 per cent this year, as inflation soars on the back of high energy prices, said United Nations Conference on Trade and Development (UNCTAD).
The UN agency in its Trade and Development Report 2022 projected the region’s economic growth.
“The South Asia region is expected to expand at a pace of 4.9 per cent in 2022, as inflation increases on the back of high energy prices, exacerbating balance of payment constraints and forcing several governments including Bangladesh and Sri Lanka to restrict energy consumption,” said the report.
Moreover, the limited and delayed progress in relaxing vaccine-related intellectual property (IP) rights continues to leave the region vulnerable to future outbreaks, it added.
UNCTAD also forecast the region’s growth rate may decelerate slightly to 4.1 per cent in 2023.
On the other hand, the world economy is expected to grow 2.6 per cent in 2022, which is 0.9 percentage points below the rate projected in the last year’s report and broadly in line with its March update.
But prospects appear to be worsening, with growth expected to decelerate further next year to 2.2 per cent, leaving real GDP below its pre-Covid-19 trend by the end of 2023, said UNCTAD.
While the Asian region has exhibited relatively dynamic growth rates over the last decade, it’s by no means immune to these deteriorating global conditions.
“The economic slowdown will set back the realisation of the 2030 Agenda for Sustainable Development,” said UNCTAD Secretary-General RebecaGrynspan.
From the end-2020, when the Covid-19 crisis was seen by some to gradually come under control, through to the first quarter of 2022, South Asia was the recipient of the largest cumulative net capital inflows, equivalent to $179 billion and led by large inflows of other investments.
East Asia and the Pacific (excluding China) recorded net inflows of $70.3 billion, linked mainly to high FDI inflows during this period.
Net inflows to the Middle East and North Africa were smaller, amounting to $36.2 billion, mainly as a result of inflows in other investments.
In the case of South-East Asia, UNCTAD estimates the growth of 4.1 per cent in 2022, yet growing inflationary pressures and a subsequent tightening of domestic monetary stances, along with more costly international financing conditions, are dampening activity.
For 2023, the region’s growth rate to decelerate to 3.8 per cent in the context of sluggish growth of global trade and the anticipated effects of a tightening in domestic monetary policy, as the region’s historic vulnerability to financial and exchange rate instability weighs on policymakers’ minds, according to UNCTAD.