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Sunday, August 7, 2022

Bangladesh will attain 6.8pc GDP growth this fiscal: ADB

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Bangladesh economy is projected to grow by 6.8 per cent in the current fiscal, says the Asian Development Bank (ADB) in a report released on Wednesday.

The growth projection for the current fiscal reflects a strong recovery supported by strengthening manufacturing, continued expansion in the global economy and effective government recovery policies, the ADB says in its latest Asian Development Outlook (ADO) 2021.

On the other hand, the ADB says that inflation is expected to slightly edge up to 5.8 per cent in FY2022 and current account deficit to narrow down to 0.6 per cent of GDP in the fiscal 2022. Continued implementation of the increased fiscal and monetary stimulus measures is expected to create inflationary pressures.

However, growth is expected to remain below pre-pandemic levels, as per the ADO 2021 report.

The main risk is the re-escalation of Covid infections in Bangladesh or major advanced economies, clipping domestic and external demand, cautions the global lender.

“The government’s policies for saving lives, while protecting livelihoods underpinned the recovery process in Bangladesh, making it one of the few countries in the world sustaining commendable economic growth in recent difficult times,” said ADB Country Director Manmohan Prakash.

Prakash said prudent macroeconomic management, and efficient implementation of stimulus measures and social protection programmes have helped. “Continued efforts for job creation, quick vaccination, and improving domestic resource mobilization will further accelerate the recovery process.”

Appreciating recent initiatives in the areas of financial inclusion, and expanding social protection, Prakash said, “Sustained reforms to increase business competitiveness, foreign investment, export diversification, skills development, and technology adoption will stimulate private sector investments and hasten economic recovery.”

In FY22, improving consumer confidence and the government’s fiscal and monetary stimulus measures are expected to boost private and public investment.

The central bank’s expansionary and accommodative monetary policy is expected to support the projected growth while keeping inflation contained. Strong remittances will stimulate private consumption, the ADB said.

A good crop outlook, consumer caution and underutilized production capacity should mitigate any upward pressure on prices. Domestic administered prices for fuel may cushion the impact of increased crude oil prices, the report said.

The report noted that in FY 2022, improving consumer confidence and the stimulus measures of the government are expected to boost private and public investment. Strong remittances will stimulate private consumption, the ADB report observed.

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