The World Bank has predicted that economic growth in Bangladesh will decrease by 4 percent in the current financial year. The multilateral lender expects weak growth in investment and industry due to "significant uncertainties" and moderate growth in agriculture due to recent floods.
But the World Bank's earlier growth forecast for South Asia, the institution says, will be higher than that.
According to the World Bank's South Asia Development Update released on Wednesday, 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. The World Bank had in April forecast growth of 5.7 percent for the current fiscal year 2024-25.
In the budget of the current financial year, the previous Awami League government had set a target of achieving 6.75 percent growth. As such, the World Bank's forecast is significantly lower than the government's target.
If the economic growth in Bangladesh slows down as per the World Bank forecast, it will be the slowest growth since the Covid pandemic. In the fiscal year 2019-20, the country had a growth of 3.45 percent.
Besides reducing the forecast for the current fiscal year, the World Bank has also reduced the growth estimate for the last fiscal year 2023-24 to 5.2 percent. The government's provisional estimate for the last financial year was 5.82 percent growth.
In the report, the World Bank said its forecasts reflect the lack of reliable data in recent months and the uncertainty surrounding the political and economic outlook. In the short term political uncertainty will not boost investment and growth in the industrial sector. On the other hand, agricultural production will be slightly affected due to floods.
However, the World Bank expects economic growth to increase in the medium to long term. The organization believes that the growth will increase as a result of the reform programs undertaken by the government in various fields.
In this regard, reforms in the financial sector, measures to increase revenue from internal sources, improvement of business environment and strengthening of trade have been specially mentioned by the World Bank.
The World Bank believes that economic growth will increase in South Asia as a whole. The firm says growth in the region will be 6.4 percent this year, higher than its previous forecast. As a result, the region will continue to be the fastest growing region in the world in terms of economy.
The World Bank believes that if more women are brought into the workforce and trade and investment are liberalized, economic growth in the South Asian region will be strengthened. As a result, the countries of the region will be able to achieve their development goals.
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