World Bank casts doubt on Bangladesh's GDP growth forecast

The World Bank has its doubt about the Bangladesh government’s 7.65 percent economic growth projection for the ongoing fiscal year.

“Remittance inflows have recovered somewhat. But, it remains lower than expected,” said Washington-based global lender's lead economist in Dhaka, Zahid Hussain. "So, where is the source of growth?” he asked.

In sharp contrast to the government’s growth estimate, Zahid said, “Private investment did not pick up the pace of what is required to attain the government’s projection.”

Presenting Bangladesh Development Update report on Monday, he said the BBS data shows the manufacturing sector grew 13.2 percent in last fiscal year over the previous fiscal, but only 200,000 jobs were generated, and private investment remained stagnant during the period.

“How does manufacturing industry expand so fast? This is the question.”

The lender slightly raised its forecast for Bangladesh’s economic growth in the fiscal 2017-18 to 6.5 to 6.6 percent from 6.4 percent it projected in January, according to the latest report.

The World Bank's report comes a week after national statistical agency BBS published data on the sector-wise contribution to the GDP in fiscal 2017-18.

According to the data, the domestic demand grew 7.65 percent on the back of manufacturing and construction sectors.

"Higher domestic demand is the driving force of manufacturing growth, but we do not see any spike in domestic demand as growth in the employment, labour income or remittances remained subdued," said Zahid Hussain.