The World Bank forecast that the GDP of Bangladesh is expected to decline to 5.2% in FY2022-23 but will grow to 6.2% in FY2023-24 due to the improvement of global economic conditions.
It also said that rising inflation, tighter financial conditions, disruptive import restrictions, and global economic uncertainty are expected to slow real GDP growth.
The World Bank revealed it at the release event of their latest report titled “Bangladesh Development Update April 2023,” on Tuesday.
The report stated that growth in Bangladesh is expected to accelerate over the medium term as inflationary pressures ease, external conditions improve, and reform implementation gains traction.
Bangladesh’s economy faces new challenges in the context of high global economic uncertainty, rising inflationary pressure, energy shortages, and revenue shortfalls.
Accelerating trade and financial reform and implementation can help sustain growth, according to the World Bank’s bi-annual report.
Abdoulaye Seck, World Bank’s country director for Bangladesh and Bhutan marked the introductory speech by saying Russia’s invasion of Ukraine and global uncertainty have impacted countries around the globe.
“Bangladesh’s post-pandemic recovery has been disrupted by elevated commodity prices, rising interest rates, and slowing global growth. The World Bank stands ready to support Bangladesh with reforms to accelerate growth and strengthen resilience,” he also added.
Bernard Haven, senior economist at the World Bank and co-author of the report presents the keynote presentation of the report.
He said that the RMG sector accounts for about 83% of Bangladesh’s exports but the Covid-19 pandemic underscored the risk of overreliance on a single sector.
He suggested diversifying exports and enhancing competitiveness will assist Bangladesh in reaching upper-middle income status by 2031.
Moreover, Bangladesh will need to remove both tariff and non-tariff barriers to achieve this and a comprehensive reform agenda, particularly with South and Southeast Asia, can deepen regional integration.
Bangladesh Development Update, on the other hand, is a companion article to the South Asia Economic Focus, a bi-annual World Bank report that analyzes economic developments and prospects in the South Asia area as well as policy problems faced by governments.