World Bank global report forecasts 6.7 percent GDP growth for Bangladesh in 2015-16

The World Bank has forecast that Bangladesh’s gross domestic product will grow by 6.7 percent in the current 2015-16 fiscal year.

It credits increases in infrastructure spending and the hike in wages in the public sector for the acceleration in growth.

The bank also says that growth will be pushed further by laws strengthening worker rights that are expected to boost exports as the country seeks to maintain US trade preferences.

Political tension has eased and exports have rebounded in the country, the global lender observes in its biannual report on economic prospects.

It published a report entitled ‘January 2016 Global Economic Prospects’ early on Thursday.

It readjusted Bangladesh’s estimated growth for the 2014-15 fiscal year from 6.3 percent to 6.5 percent in its June 2015 report.

The review had also been published in its ‘Bangladesh Development Update’ report in October last year.

The January 2016 report says that achievement of the projected growth will be at risk if there is a resumption of political turmoil in the country.

The government has targeted 7 percent growth in the current fiscal year.

Zahid Hussain, the Lead Economist at the World Bank’s Dhaka office had earlier said that investment in the private sector will have to increase in order to fulfill the target.

According to the World Bank’s latest report, growth in the South Asia region rose from 6.8 percent in 2014 to 7 percent in 2015, the fastest among developing regions.

The reasons given for this growth were recovery in India, benefit from lower oil prices, and resilience to external shock.

“More than 40 percent of the world’s poor live in developing countries where growth slowed in 2015,” World Bank Group President Jim Yong Kim said in a media release.

"Developing countries should focus on building resilience to a weaker economic environment and shielding the most vulnerable,” he added.

World Bank Group Vice President and Chief Economist Kaushik Basu said, “There is greater divergence in performance among emerging economies".

“Compared to six months ago, risks have increased, particularly those associated with the possibility of a disorderly slowdown in a major emerging economy,” he said.

“A combination of fiscal and central bank policies can be helpful in mitigating these risks and in supporting growth,” he added.