World Bank lowers BD economic growth
Special Correspondent: The World Bank has predicted that the growth of Bangladesh’s gross domestic product (GDP) may be 5.2 percent in the current fiscal year 2022-23. They gave this information in the updated report on the development of Bangladesh.
Although the government has set a GDP growth target of 7.5 percent in the current fiscal year.
The World Bank has said that the growth rate of Bangladesh may increase to 6.2 percent in the next fiscal year i.e. 2023-24 fiscal year. The WB believes that Bangladesh’s growth rate will increase in the medium term if the inflationary pressure decreases. In its Global Economic Prospects report in January this year, the World Bank had made the same forecast-5.2 per cent in 2022-23 and 6.2 per cent in 2023-24.
Earlier in October 2022, the World Bank had said that the fiscal year 2022-23 could see a growth of 6.1 percent. It had forecast 6.7 percent in June. In other words, the World Bank has lowered its growth forecast.
According to the World Bank, the country’s real GDP growth rate will drop to 5.2 percent in the current financial year due to high inflation, various types of strictures in the financial sector and import restrictions. Along with that, there is the uncertainty of the global economy.
Inflationary pressure has increased due to high commodity prices, according to a release from the donor agency.
The balance of payments deficit widened to $7.2 billion in the first half of the 2022-23 financial year from $5.3 billion in the same period last year. That is, the pressure on foreign currency reserves is increasing. The World Bank believes that pressure on the balance of payments is increasing due to the multiple exchange rates of the dollar. This, they argue, is discouraging exports and reducing expatriate income. A market-based single exchange rate will bring balance to foreign trade.
Abdullaye Sek, head of the World Bank’s Bangladesh and Bhutan region, said that the Russia-Ukraine war and global uncertainty have affected many countries around the world. Rising commodity prices, rising interest rates and slowing global growth will also affect Bangladesh.
Abdullahi Sek also said that the World Bank will support Bangladesh’s efforts to maintain or turn around the pace of growth through reforms.
The news release through which the World Bank predicts Bangladesh’s growth is titled, Strong Structural Reforms Can Help Bangladesh Sustain Growth or Strong Structural Reforms Can Help Bangladesh Sustain Growth.
The World Bank says that Bangladesh can tackle the current challenges through structural reforms, such as trade reforms and export diversification. It also helps in sustaining growth momentum.
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