Dhaka, 6 March 2024 (TDI): The World Bank report, in its recent Global Economic Prospects report released on Tuesday, announced a forecast of slower economic growth for Bangladesh in the fiscal year 2023-24 (FY24).
The World Bank report predicts a growth rate of 5.6%, citing challenges such as elevated inflation and low foreign exchange reserves, which are expected to hinder private consumption and investment.
Factors Hindering Growth
The World Bank report highlights that import restrictions, likely to persist due to low foreign exchange reserves, will impede private investment. This, coupled with elevated inflation levels, is projected to weigh on private consumption, thereby contributing to the slowdown in economic growth.
While private investment faces impediments, The World Bank report notes that public investment is anticipated to remain resilient. Despite the challenges, public investment is expected to sustain economic activity to some extent.
The World Bank forecasts a slight improvement in Bangladesh’s economic growth, with a projected growth rate of 5.8% in the next fiscal year, FY25. The World Bank suggests a potential rebound in economic activity, although challenges persist in the near term.
Performance of South Asian Region
Moreover the report also highlights the performance of the South Asia region, which remains the fastest-growing among emerging market and developing economy regions. However, growth in the region is expected to slightly slow down to 5.6% in 2024, before firming to 5.9% in the following year.
India continues to play a significant role in driving the growth of South Asia, with robust expansion driven by public investment growth and vibrant services activity. However, growth in other regional countries, such as Pakistan, remains subdued.
Also Read: Bangladesh’s BRICS Bid: A Challenge to the West
Global uncertainties and Economic Challenges
The World Bank report underscores various downside risks and uncertainties, including heightened uncertainty around elections in some countries in 2024. However, it suggests that implementing growth-friendly policies post-election could improve growth prospects.
Amidst slower global growth projections and mounting geopolitical tensions, The World Bank report emphasizes the need for comprehensive policy measures to address challenges such as slowing growth, sluggish global trade, and tight financial conditions.
Global Development Goals
To tackle climate change and achieve key global development goals by 2030, The World Bank report emphasizes the need for a significant increase in investment, particularly in developing countries. Without comprehensive policy packages, prospects for such an increase remain uncertain.
In conclusion, the World Bank’s Global Economic Prospects The World Bank report highlights the challenges and opportunities facing Bangladesh and the broader South Asia region.
Despite the near-term challenges, there is optimism for a potential rebound in economic growth, contingent upon implementing growth-friendly policies and measures to address existing challenges.
){kind=link}