The central bank believes exports and remittance flows have helped keep the economy alive
Published : 21 Jan 2025, 08:08 AM
Bangladesh Bank believes although there is a risk of an economic slowdown due to the government's reform initiatives, it will yield medium and long-term benefits.
The country's central bank has voiced such concerns and possibilities in a report titled “Bangladesh Quarterly” for the July-September quarter on Sunday to highlight what kind of impact the ongoing economic reforms are or will have.
The report said the economy is undergoing a critical period following the interim government's assumption of office but is gradually returning to normal.
"The World Bank believes the country's economic growth may be 4.1 percent in the 2024-25 fiscal year. It indicates this slowdown due to reduced investment and industrial activity caused by political uncertainty."
In this quarterly report, the central bank says the three main sectors of the economy – agriculture, industry, and services – were significantly disrupted after the July-August 2024 uprising.
Economic activities were impacted by floods in several districts in August and September, especially as the interim government initiated economic reforms.
Even so, the central bank believes strong growth in exports and remittance flows have helped keep the economy alive.
Inflation has continued to trend upward in the first three months of the current fiscal year, the report finds.
In July 2024, inflation rose to a record high of 11.66 percent, the highest in 13 years.
In the previous fiscal year, the average inflation was 9.72 percent.
While highlighting its steps to reduce inflation, the central bank says the contractionary monetary policy has been further strengthened to reduce inflationary pressures.
The bank believes "the initiatives taken to reform banking to ensure good governance in the financial sector will soon restore stability to the macroeconomic environment."