The Asian Development Bank (ADB) has revised Bangladesh’s economic growth projection for the current fiscal year ending in June 2024. Initially, the ADB anticipated a 6.5% GDP growth but now expects it to be 6.2%.
Citing reasons for this downgrade, the ADB pointed out moderate growth in exports and manufacturing. They highlighted economic slowdowns in key export markets and challenges in the power and energy sectors, along with persistently high inflation.
Earlier, the International Monetary Fund (IMF) had also reduced its growth forecast for Bangladesh’s economy, anticipating a 6% growth rate for the same fiscal year, down from its initial 6.5% projection in October.
Preceding the IMF, the World Bank had downgraded Bangladesh’s economic growth forecast to 5.6% for the 2023-24 fiscal year. The World Bank attributed this reduction to continuous high inflation and difficulties in external payments.
The ADB report emphasized the issue of inflation in Bangladesh, stating that despite efforts to curb it, the monthly inflation rate was nearly in double digits between July and October. However, the bank predicts a gradual decrease in inflation in the upcoming months.
To address inflation, the ADB highlighted the implementation of contractionary monetary policies, measures to stabilize the exchange rate, declining global commodity prices, and an optimistic outlook for crop production.
Despite these challenges, the ADB identified potential upside risks to the growth forecast, particularly related to reduced uncertainties concerning the upcoming elections in January.