The World Bank forecasts a slowdown in Bangladesh’s economic growth to 5.6% in the current fiscal year (FY24), citing elevated inflation impacting private consumption and low foreign exchange reserves leading to continued import restrictions. Public investment, however, is expected to remain resilient. The country’s economy is projected to pick up at 5.8% in the next fiscal year (FY25).
In South Asia, despite a slight slowdown to 5.7% in 2023, the region remains the fastest among emerging markets. India plays a significant role, contributing over three-fourths of the regional output. The report notes a contraction in Pakistan’s economy during FY23, with an expected growth rate of 5.6% in 2024 before firming to 5.9% the following year. The outlook for Sri Lanka remains uncertain, while growth in Maldives and Bhutan is expected to receive support from tourism and a new hydro plant, respectively.
Risks to the forecast include higher energy and food prices due to conflicts in the Middle East and potential adverse spillovers from larger-than-expected increases in policy rates in advanced economies. Elections in 2024 pose uncertainty, but growth-friendly policies post-election could improve prospects. The World Bank emphasizes the need for a major course correction to avoid a decade of missed opportunities and highlights global challenges, including slower GDP growth, geopolitical tensions, and a subdued outlook for developing economies.
The report calls for increased investment to tackle climate change and achieve global development goals by 2030, estimating a required annual investment of $2.4 trillion. Without comprehensive policy measures, per capita investment growth in developing economies is expected to average 3.7%, emphasizing the need for sustained efforts to spur investment.