IMF has revised down Bangladesh’s economic growth forecast for the ongoing fiscal year due to global and local challenges, including higher inflation. The GDP growth is now projected at 5.7%, down from the initial forecast of 6.5%. However, it’s expected to rebound to 6.6% in the following fiscal year. This downward revision aligns with the IMF’s gloomy forecast for the global economy over the medium term.
Various factors contribute to Bangladesh’s economic challenges, including the Russia-Ukraine war and Middle East tensions, which have led to a depletion of foreign currency reserves and escalated prices of global commodities. Inflation is projected to remain above 9.3% in the current fiscal year, affecting the buying power of the population and overall demand.
Other international organizations have slightly different growth forecasts for Bangladesh, with the World Bank forecasting 5.6% growth for FY24 and the Asian Development Bank projecting a 6.1% growth rate. Despite weaker global demand, Bangladesh’s garment exports are expected to continue growing, aided by the use of local materials amid the ongoing dollar crisis.
Persistent inflation is expected to dampen private consumption growth, while energy shortages, rising interest rates, and financial sector vulnerabilities may affect investor sentiment. The government aims to limit average inflation to 7.5% by June, but challenges persist due to both external and internal factors.
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