Bangladesh’s gross domestic product (GDP) is expected to grow by 6.6% in fiscal year (FY) 2023, according to the latest Asian Development Bank (ADB) report, Asian Development Outlook (ADO) 2022 Update, released on Wednesday.
The moderately lower growth forecast reflects slower domestic demand and weaker export prospects due to slower growth in advanced economies.
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Inflation is projected to rise from 6.2% in FY2022 to 6.7% in FY2023. The current account deficit is expected to narrow from 4.1% of GDP in FY2022 to 3.6% of GDP in FY2023 as imports slacken and remittances increase.
The main risk to this growth projection is a slowdown in exports caused by global uncertainty over the prolonged war in Ukraine.
“The government is navigating the prolonged external economic uncertainties relatively well and has implemented appropriate policies to reduce the external imbalance, said Country Director Edimon Ginting.
But turbulent times like these are also a good time to accelerate reforms that would improve the country’s growth prospects in the medium term, he said.
These reforms include improving domestic resource mobilization, deepening the financial market, and enhancing competitiveness to promote the creation of productive jobs in the private sector, Ginting said.
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Uncertainties in the international energy market provide a good momentum to accelerate reforms to achieve the country’s climate change goals and expand domestic renewable energy supply to reduce dependence on fossil fuels, he added.
The ADO 2022 Update states that private investment growth will be lower due to global uncertainty and energy shortages.
With slower revenue growth and higher import costs, public investment growth will also be slower as a result of government austerity measures.
Inflation is expected to accelerate from 6.2% in FY2022 to 6.7% in FY2023 as price pressures increase due to the upward adjustment of domestic administered prices for all types of fuel and rising global commodity prices.