July 23, 2024, 11:13 am

Bangladesh’s economy to grow 5.7pc in FY25

  • Update Time : Thursday, June 13, 2024
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Bangladesh’s economy is likely to grow 5.7% in FY25, supported by increased private consumption for easing inflation and a pick-up in overall investment for implementation of large investment projects, according to the World Bank.

Shortages of inputs and imported goods are expected to ease gradually. A more flexible exchange rate policy is envisaged to help increase remittance inflows and reduce balance of payments pressures, the multilateral lender said in its Global Economic Prospects released on Tuesday.

The outlook by the World Bank came days after the government, in the budget for FY25, projected a 6.75% growth of the gross domestic product — the final value of goods and services produced in an economy in a certain period — for FY25.

The World Bank’s forecast is roughly one percentage point lower than the government’s target for the year.

The Washington-based agency in April predicted 5.7% growth for Bangladesh’s economy for next fiscal year and it kept the projections unchanged in the latest report.

The agency said overall output would expand 5.6% in the FY24 ending this June.

The Bangladesh Bureau of Statistics (BBS) provisionally estimates GDP growth at 5.82% for FY24.

The World Bank said industrial activity was disrupted in Bangladesh partly due to ongoing import restrictions, which have caused shortages of materials and intermediate goods.

The government consumption and investment have supported activity, while elevated inflation has dampened real wage growth and the purchasing power of households, and weighed on private consumption, it said in its Global Economic Prospects.

Additionally, higher borrowing costs have weighed on demand. High levels of non-performing loans in the banking sector dampened investor confidence.

The multilateral lender raised its global growth outlook on the back of resilient consumer spending in the United States, but warned that growth remains weak by historical standards, reports Reuters.

In updated forecasts, the Washington-based development lender said it now expects the world economy to grow by 2.6% this year in real terms, up 0.2 percentage points from its last update in January.

 

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