Bangladesh’s growth forecast unchanged at 6.4%

The World Bank has kept its Bangladesh gross domestic product (GDP) growth forecast unchanged at 6.4 per cent in the fiscal year 2021-22 in a new report.

Released on Wednesday, the Global Economic Prospects report also projected 6.9 per cent growth for Bangladesh in the 2022-23 fiscal year.

In the “Shifting Gears: Digitisation and Services-Led Development” report released in October last year, the global lender forecast 6.4 per cent growth for Bangladesh in FY22.

The World Bank said Bangladesh’s GDP growth in FY21 was 5 per cent. But the provisional estimation by Bangladesh Bureau of Statistics said the FY21 GDP growth was 5.43 per cent.

“In Bangladesh, growth is projected to reach 6.4 per cent in FY22, ending in June 2022, and 6.9 per cent in FY23, revised up by 1.3 and 0.7 percentage points respectively, with private consumption being the main engine of growth, supported by rising services activities and firm exports of readymade garments,” Wednesday’s report said.

It said strong export growth, supported by returning readymade garment demand from abroad, and a rebound in domestic demand – with improving labour income and remittance inflows – supported the recovery in Bangladesh.

Bangladesh saw its goods trade deficit widen to record levels on strong domestic demand and rising energy prices, according to the report.

Besides, the pandemic and the emergence of the Omicron variant could hinder economic activities by requiring additional mobility restrictions and undermining external demand, it said.

It further said growth prospects had improved since June 2021 largely because of better prospects in Bangladesh, India, and Pakistan.

South Asia growth is expected to accelerate to 7.6 per cent in 2022, as pandemic-related disruptions fade, before slowing to 6 per cent in 2023, the report said.

India’s economy, the largest in South Asia, is expected to grow by 8.7 per cent in FY22 aided by an increase in public investment and incentives to boost manufacturing.

In the Maldives, the GDP is projected to grow by 11 per cent, followed by Nepal by 3.9 per cent, Bhutan by 5.1 per cent, Pakistan by 3.4 per cent, and Sri Lanka by 2.1 per cent.