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Bangladesh economy to grow at higher 6.5pc in FY24: ADB

by tbhdesk

Asian development Bank predicts a higher 6.5 GDP growth for Bangladesh in FY24, up from FY23’s estimate of 6 percent growth, driven by rise in domestic demand and export growth.

The manila-based lender made the forecast in its latest, Asian Development Outlook (ADO) September2023, released on Wednesday.

“The slightly faster growth forecast reflects an improvement in domestic demand and better export growth due to economic recovery in the euro area,” ADB said in a statement.
Inflation is projected to ease from 9 percent in FY2023 to 6.6 percent in FY2024.

The current account deficit is expected to slightly narrow from 0.7 percent of GDP in FY2023 to 0.5 percent of GDP in FY2024 as remittance growth improves.

ADB cited a further deterioration in export growth due to weaker global demand than expected as the main risk to its growth projection.

“The government is managing relatively well against the external economic uncertainties, while advancing infrastructure development and critical reforms to improve investment climate,” said Country Director Edimon Ginting.

“These key structural reforms include to strengthen public financial management, enhance domestic resource mobilization, improve logistics, and deepen financial sector, which are critical for private sector development,export diversification and productive job creation in the medium term,” said Ginting.

“Continued high oil prices also provides a good incentive to accelerate reforms to expand domestic renewable energy supply and achieve the country’s climate change goals.”
The ADO September2023 states that moderate inflation and an increase in remittances will contribute to reviving private consumption, while the completion of a number of major government infrastructure projects will increase investment.

Private investment, however, may be dampened by the initial higher interest rates following the enhancement in the country’s monetary policy framework.

Inflation is expected in FY2024 with some fall in global non-fuel commodity prices, expected higher agricultural production, and the initial tightening of monetary policy under the new framework.

Source: The Daily SUN.

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