MasterCard Economic Institute (MEI) has forecasted a decrease in Bangladesh's Gross Domestic Product (GDP) growth to 5.7 per cent for the fiscal year 2024-25, citing challenges due to weak domestic and external demand.
According to MEI's economic outlook, persistently high inflation is eroding consumers' purchasing power. The institute anticipates inflation to rise to 9.8 per cent in the 2023-24 fiscal year, before easing to 8 per cent in 2024-25.
MEI also projected that higher US dollar rates could exacerbate vulnerabilities in the external sector.
However, the introduction of the crawling peg exchange rate regime in May, alongside better alignment between official and unofficial exchange rates, is acting as a positive force for increased remittances.
Bangladeshi consumers have doubled their spending on essentials compared to pre-pandemic levels, driven by rising prices at the expense of discretionary spending.
The report highlights that consumer spending on groceries and electronics has remained highly consistent with digital channels in the post-pandemic period.
Chief Economist for Asia Pacific and Middle East, Africa at MasterCard David Mann delivered a keynote speech and presented the latest outlook for global and Bangladeshi markets at a roundtable in Dhaka on Thursday.
