Bangladesh’s economy is expected to grow by 6.9% in FY 2022-23 on strong export growth and a rebound in domestic demand, the World Bank (WB) said in its World Economic Outlook. released on Tuesday.
“In Bangladesh, strong export growth, supported by the return of demand for garments from abroad, and a rebound in domestic demand – with improved labor incomes and remittances – have supported the recovery” , said WB.
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The multilateral lender forecast gross domestic product (GDP) to grow 6.4% in fiscal year 2021-22, up 1.3 percentage points from its June projection of 5.1% for exercise.
For the next fiscal year 2022-23, it raised the forecast for Bangladesh by 0.7 percentage points, from 6.2%.
“Both Bangladesh and Pakistan have seen their trade deficits in goods widen to record highs due to strong domestic demand and rising energy prices,” the World Bank said, adding that consumption private sector, the main engine of growth, supported by the increase in services activity and the firming up of clothing exports, has improved. prospects for Bangladesh.
He said production in South Asia is expected to increase by 7.6% in 2022, up from 7% the previous year, as vaccination against Covid-19 progresses and contact-intensive sectors recover. .
“Growth projections have been revised upward since June 2021 for each year of the forecast period, largely reflecting better prospects in Bangladesh, India and Pakistan. The return of demand should lead to a strong rebound in imports and gradually widen the region’s current account deficit.
Growth prospects have improved in the region since June 2021, reflecting upward revisions to forecasts for Bangladesh, India and Pakistan.
Production losses compared to pre-pandemic trends remain significant in the region. Fiscal policy will support growth, but will dissipate over the forecast horizon.
Per capita income growth continues to catch up to levels in advanced economies, but at about half the pre-pandemic rate.
The WB, however, said that after a strong rebound in 2021, the global economy is entering a sharp slowdown amid new threats from Covid-19 variants and rising inflation, debt and income inequality that could jeopardize the recovery in emerging and developing economies. .
“The rapid spread of the Omicron variant indicates that the pandemic is likely to continue to disrupt economic activity in the near term. In addition, a notable deceleration in major economies – including the United States and China – will weigh on external demand developing economies,” the WB said in a statement.
He said at a time when governments in many developing economies lack the policy space to sustain activity if needed, new outbreaks of Covid-19, persistent supply chain bottlenecks and inflationary pressures, and elevated financial vulnerabilities in large parts of the world could increase the risk of a hard landing.
“The global economy is simultaneously facing Covid-19, inflation and political uncertainty, with government spending and monetary policies in uncharted territory. Rising inequality and security challenges are particularly detrimental to developing countries,” said World Bank Group President David Malpass.
“Putting more countries on a favorable growth path requires concerted international action and a comprehensive set of national policy responses,” he added.