Bangladesh’s economic growth to slowdown amid election-related uncertainty: ADB

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Bangladesh’s economic growth to slowdown amid election-related uncertainty: ADB

The Asian Development Bank (ADB) has lowered the GDP (gross domestic product) projection for Bangladesh forecasting that the Bangladesh’s GDP will be 6.2 per cent in the current fiscal year.

The ADB also thinks that uncertainty in the Bangladesh economy persists ahead of the 12th parliamentary elections to be held in January. Besides, several other factors, including the crisis of power and energy, fall in export earnings and high inflation rate, are slowing down the economy.

The multinational agency published the December edition of the ‘Asian Development Outlook’ on Tuesday.

The ADB said in the report that the growth forecast for the fiscal ending 30 June has been lowered.

Earlier, ADB predicted a GDP of 6.5 per cent for Bangladesh in the current fiscal. Meanwhile, the government has set a target of 7.5 per cent this fiscal.

The ADB has cited several reasons behind not being able to reach expected GDP including the economic slowdown in the destination countries of Bangladesh’s product. According to the multinational agency, the economy of those countries has slowed down. As a result, Bangladesh is seeing a medium growth in export and production.

The ADB assumes a further rise in the inflation rate of Bangladesh in the current fiscal. However, it didn’t specify to what extent the inflation rate will rise. The ADB list of the countries likely to see a rise in inflation includes four countries – Kazakhstan, Myanmar, South Korea and Bangladesh.

The ADB said that among the South Asian countries, a high inflation rate is still prevailing in Bangladesh and Nepal.

Regarding the inflation in Bangladesh, the ADB said despite several initiatives of the government, the inflation rate remained near the two digit figure every month from July to October. ADB expects a more tolerable inflation rate in Bangladesh in the coming months only if the government continues with the contractionary monetary policy.

The inflation rate is also likely to fall in case the prices of the products in the international markets fall and effective measures are taken to launch a market-based monetary policy. Besides, a good production may also lead to a decline in the inflation rate, the ADB predicts.