The Asian Development Bank (ADB) projects that Bangladesh’s economy will expand by 6.1 per cent in fiscal year 2023-24, driven by exports, as outlined in the Asian Development Outlook released on Thursday.
Looking ahead, the ADB forecasts GDP growth could accelerate to 6.6 per cent in the following fiscal year.
Despite subdued global demand, Bangladesh’s exports of traditional low-end garments are expected to continue growing as exporters increasingly rely on local yarn and fabrics due to the dollar crisis.
The projected GDP growth rate for 2024 exceeds the 5.8 per cent expansion recorded in the fiscal year ending June 2023.
Additionally, the ADB anticipates that average inflation will moderate to 8.4 per cent in the current fiscal year, which should support growth in private consumption.
Within South Asia, Bangladesh is poised to achieve the second-highest GDP growth rate after India’s 7 per cent for the current year.
The ADB’s forecast follows recent data from the Bangladesh Bureau of Statistics, which indicated that economic growth in the October-December quarter of fiscal 2023-24 slowed to 3.78 pe rcent, marking the slowest pace in three quarters.
This slowdown was primarily driven by a sharp decrease in manufacturing output due to reduced domestic consumption.
The services sector also experienced a notable slowdown during the quarter, offsetting a marginal increase in agricultural production.
Earlier this month, the World Bank projected subdued growth for Bangladesh in fiscal 2023-24, citing reduced private consumption affected by high inflation.
The GDP is expected to expand by 5.6 per cent, which is below the average annual growth rate of 6.6 per cent observed in the decade leading up to the Covid-19 pandemic.
Looking ahead to the subsequent fiscal year of 2024-25, the World Bank anticipates relatively slower growth at 5.7 per cent, driven by a modest recovery in private consumption supported by a moderation in inflation.