The World Bank has forecasted that Bangladesh’s gross domestic product (GDP) will be 3.6% this fiscal year, revising its earlier forecast of 1.6%.
The development lender, in its flagship publication ‘Global Economic Prospects’, also said Bangladesh’s economic growth will be 5.1% in the fiscal year (FY) 2021-22, higher than the earlier growth forecast of 3.4%.
Private consumption is the main engine of growth which is supported by normalising activity, moderate inflation, and rising ready-made garment exports.
While there is uncertainty regarding the stability of private consumption, Bangladesh’s growth is expected to experience a gradual recovery.
“Recoveries in Bangladesh and Pakistan face new headwinds from a recent rise in Covid-19 cases accompanied by rising restrictions to stamp out the new surge,” stated the report.
The report also highlighted the poor performance of vaccine administration in Bangladesh with only a small fraction of people having been vaccinated.
Growth projection lower by WB while higher projection by others
The World Bank’s forecast for Bangladesh’s GDP growth is less than those projected by others.
ADB and IMF projected 6.8% and 5% growth for the country in the current fiscal year.
ADB and IMF’s growth projection for FY22 is 7.2% and 7.5%, which is also higher than that of WB’s growth projection in the next fiscal year.
In the Budget FY22, the government’s GDP growth target is 7.2%. The 8th five-year plan also targeted 7.7% GDP growth in FY22.
South Asia’srecovery remains fragile
South Asian economies are bouncing back as economic growth is set to increase by 6.8%this year after contracting an estimated 5.4% in 2020.
But the recovery remains fragile as amid this Covid-19 pandemic, the region is expected to see tens of millions more extreme poor — those living below $1.90per day — by the end of this year and to have more than half of the new global poor created by Covid-19.
The report emphasised the uncertainty of the economic recovery stating, “All regions remain vulnerable to renewed outbreaks of Covid-19, which could feature variant strains of the virus; financial stress amplified by elevated debt levels; deeper-than-expected scarring from the pandemic; and rising social unrest, potentially triggered by rising food price”
India- the largest economy in South Asia is expected to grow 7.5% in the fiscal year 2021-22 (April to March), a decline from the revised growth projection of 8.3% in FY21after contracting by 7.3% in FY20.
“India’s recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic”, stated the report.
The Maldives’s real GDP is projected to grow by 11.5% inFY2022after projected to expand by 17.1% in 2021.
Sri Lanka and Pakistan’s economy is expected to grow by 2% in FY2022 from the previous year’s growth projection of 3.4% and 1.3% respectively.
Nepal’s GDP is forecasted to grow by 3.9% in the fiscal year 2021-22(mid-July to mid-July).
In Afghanistan, 2.6% growth is expected in 2022 (December to December) compared to the previous year’s growth projection of 1%.
However, Bhutan’s GDP will rise by 5% in FY22 (July-June)after a projected contraction in FY21.
World Bank President David Malpass said, “How national governments, the private sector, and international institutions respond to the challenges of poverty, inequality, and climate change as we emerge from a crisis that has affected us all will be defining choices of our age.”