2024-09-28 22:06:28
The Asian Development Bank (ADB) has predicted that economic growth in the country may slow. According to the forecast of the organization, the economic growth of Bangladesh may decrease in the current financial year 2024-25. This growth may be 5.1 percent. At the same time, the company believes that inflation will increase. The agency cited political unrest and floods as reasons.
The forecast was made in the September issue of ADB’s flagship publication ‘Asian Development Outlook’ on Wednesday. Earlier in last April’s forecast, ADB had said that the growth would be 6.6 percent. Now it is said to be reduced to 5.1 percent. ADB said inflation will come down to 7 percent in the current fiscal year. Now it is said that this inflation will increase to 10 percent.
ADB also offered an explanation for the lower GDP growth. They said that economic activities were disrupted due to the country’s political unrest in July and August. Along with that, the economy has been affected by the recent floods. The growth rate of Bangladesh will slow down due to these two reasons.
According to the ADB report, demand will be subdued due to high inflation, a slowdown in the global economy and other macroeconomic challenges. Inflation has been on the rise due to rising commodity and energy prices and devaluation of the currency. However, the current account deficit has decreased due to decrease in imports and exports.
ADB believes fiscal and monetary policy will continue to tighten. Besides, purchases and investments will further decrease. Macroeconomic forecasts are highly uncertain due to downside risks. Ongoing political instability, fragile law and order situation and financial sector weakness will further increase the risks.
Macroeconomic stability will depend on increasing revenue collection, stabilization of interest and exchange rates, and economic reforms, ADB said.
Bangladesh’s growth in the last two fiscal years has been below 6 percent due to persistently high inflation, pressure on the foreign account, import controls and slow private investment. In the fiscal year 2022-2023, the growth was 5.78 percent; In the fiscal year 2023-2024 it was 5.82 percent.
It should be noted that the GDP growth in the 2024-2025 financial year has been projected to be 6.75 percent. Economists termed it ‘ambitious’ given the ongoing challenges.