World Bank forecasts 6.4 percent economic growth for FY 18

The World Bank projects Bangladesh's GDP to grow by 6.4 percent in the current fiscal year.

With over 7 percent growth in the last two fiscal years, the Bangladesh government has set a target for 7.4 percent for fiscal 2017-18.

In its latest report 'The Bangladesh Development Update September 2017', the lending agency said that growth remained resilient in spite of volatile export growth and shrinking remittances.

"This growth projection is higher than any other country, except for India. This is considered as very good. The forecast for India is 7.5 percent, which they may not achieve at the end," Zahid Hussain, Lead Economist at the World Bank's Dhaka office, told the media on Wednesday.

The global lender forecasts China to grow by 6.3 percent, Indonesia 5.3, Thailand 3.3 and Pakistan 5.5 percent in the FY18.

Bangladesh's growth is projected to be robust and above many developing countries in East and South Asia, driven by industry and service, it said.

It, however, said inflation is expected to be high at 6 percent considering the rise in food prices.

Price of coarse rice remains as a result of the monsoon flooding along with factors like policy indecisiveness, speculative hoarding and increased prices in India, Vietnam and Thailand, says the report.

WB expects to export growths to pick up modestly, a turnaround in remittance and boost in private investment.

The lending agency, however, finds that the rate of job creation has slowed down.

Between 2003 and 2010, total employment grew by 3.1 percent per year, which fell to 1.8 percent between 2011 and 2016.

It said stagnant private investment, weak export growth and fall in remittances have impacted the job market and that slow structural reform was hindering faster job creation.

The World Bank recommends regulatory reforms, revision of 'distortionary' industrial policies to create more employment along with planned urbanisation.

Citing that the Dhaka division accounts for 45 percent of all industry jobs and 37 percent of service job, it emphasized on creating 'strong second-tier cities'.