Bangladesh is facing many challenges after the corona epidemic. These include high inflation, financial sector weakness and global sector pressures. These challenges or crises have not yet been overcome. As a result, financial growth will slow down in 2024. Actual growth will be 5.2 percent.
This information was given in the ‘Bangladesh Development Update’ report published in the press conference at the World Bank office in Agargaon, capital, on Tuesday (October 15).
In the report, the organization says that the trend of growth is decreasing in Bangladesh. However, the company predicts a growth of 5.8 percent in 2023. The company also predicts a 4 percent growth in 2025.
The World Bank has said that the economy of Bangladesh will remain under pressure for another year. They say that the gross domestic product (GDP) of Bangladesh will decrease by 4 percent in the current financial year. However, it may increase to 5.5 percent in FY 2025-26.
It has been said about the financial sector, there are various types of crisis in the banking sector. In particular, defaulted loans are high. Despite many efforts of the government, it cannot be controlled. Besides, Bangladesh Bank has increased the loan interest rate to reduce inflation. This has reduced borrowing in the private sector.
In the report, the World Bank said, Bangladesh’s growth will slow down to between 3.2 percent and 5.2 percent. According to the World Bank, the intermediate point would be 4 percent. However, the World Bank last April had forecast 5.7 percent growth for the current fiscal year 2024-25.
The recently collapsed Awami League government had set a target of 6.75 percent growth in the budget of the current fiscal year. Accordingly, the World Bank’s forecast will be 2.75 percent less than the government’s target.
If the economic growth in Bangladesh falls according to the World Bank forecast, it will be the lowest growth since the corona epidemic. In the fiscal year 2019-20, the country had a growth of 3.45 percent.
Besides reducing the growth forecast for the current fiscal year, the World Bank has also reduced the growth estimate for the fiscal year 2023-24 to 5.2 percent. The government’s provisional estimate for the last financial year was 5.82 percent.
Regarding employment, it was said in the press conference that there is a gap between demand and supply in the labor market of Bangladesh. That’s a big problem. In this regard, diversification of exports, increase in foreign investment and increase in quality of education should be done. There is a ‘mismatch’ of technical education in Bangladesh with skills. Special importance should be given to these issues to increase employment in the institutional sector. The report also mentioned that the situation of internal revenue collection is bad.
World Bank Country Director Abdoulaye Sek spoke online from Washington at the press conference. World Bank Senior Economist Dhruv Sharma, Economist Nazmus Khan and World Bank Senior Communication Officer Mehreen A Mahbub were present on this occasion.
Abdoulaye Sek, Country Director of the World Bank, said that Bangladesh’s growth in recent years has not contributed much to job creation. However, a significant number of young people are entering the labor market every year. In particular, increasing educated and urban unemployment is one of the challenges.
He also said that high inflation is one of the challenges for Bangladesh. It cannot be reduced even with various initiatives. In particular, food inflation is high, which is dragging down the standard of living of the common people. In addition, discrimination is also increasing in Bangladesh. Initiatives need to be taken to reduce discrimination. Inclusive growth and various reforms in the financial sector must be expedited.
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