Published : 04 Apr 2023, 02:45 PM
Updated : 04 Apr 2023, 02:45 PM
Bangladesh's gross domestic product is expected to grow by 5.3 percent in the 2023 fiscal year, the Asian Development Bank said in a report.
The slower growth forecast reflects subdued domestic demand and weaker export expansion due to slow global growth following the Russian invasion of Ukraine, according to the report released on Tuesday.
Inflation is forecast to accelerate from 6.2 percent in FY2022 to 8.7 percent in FY2023. The current account deficit is anticipated to narrow from 4.1 percent of GDP in FY2022 to 1.6 percent in FY2023 as imports loosen and remittances grow.
The main risk to this growth projection is a greater economic slowdown in Bangladesh's major export destinations driven by global uncertainty over the prolonged political tensions, according to the report.
"The government is managing relatively well against the impact of external adversities and has embarked on the reform programs as precautionary measures," said ADB Country Director for Bangladesh Edimon Ginting.
"Accelerating key reforms during these difficult times would help the country sustain higher growth in the medium term. These reforms include strengthening public financial management and domestic resource mobilisation, deepening the financial sector, and enhancing competitiveness to promote the creation of productive jobs in the private sector," Ginting said.
"This is also a high time for enhancing resilience against the global energy market volatility by creating an enabling environment for rapid expansion of domestic renewable energy supply to reduce dependence on fossil fuels in line with the country's climate agenda," Ginting added.
The report states that private investment growth will be lower because of energy shortages and higher production costs. With a shortfall in revenue collection, austerity measures, and depleting foreign exchange reserves, public investment growth will also be slower.
Inflation is expected to accelerate from 6.2 percent in FY2022 to 8.7 percent in FY2023 as price pressures increase due to the upward adjustment of domestic-administered prices for fuel oil, gas, and electricity, and higher global commodity prices, the report says.
