World Bank
World Bank managing director to arrive in Dhaka Saturday
World Bank Managing Director of Operations Axel van Trotsenburg will arrive in Dhaka Saturday on his first official visit to Bangladesh.
During his three-day visit, Axel will join a public event in Dhaka on January 22 to mark 50 years of the partnership between Bangladesh and the World Bank Group and celebrate the country's "remarkable" development achievements, said a media statement.
"Bangladesh has shown the world what can be done to dramatically reduce poverty through successful innovations in human development, women’s empowerment, and climate adaptation," Axel said.
Read more: Bangladesh wants low-interest loan from World Bank amid economic woes
"The World Bank is proud of its 50-year partnership with Bangladesh and being part of the country's remarkable development journey. I look forward to my visit and to seeing these achievements firsthand."
Axel will meet with the prime minister, finance minister, senior government officials, civil society representatives, and development partners, and visit the World Bank-supported projects.
World Bank to provide US$300 million to help Bangladesh’s pandemic responseHe will be accompanied by Martin Raiser, World Bank vice-president for South Asia.
Read more:
WB cuts Bangladesh growth target by 0.9 percent to 5.2 percent
The World Bank on Wednesday cut Bangladesh's economic growth (gross domestic product -GDP) forecast for the 2022-23 fiscal year further by 0.9 percent to 5.2 percent, due to a combination of factors including elevated inflation, energy shortages and tightening of the monetary policy.
The GDP growth has been predicted in the World Bank's 'Global Economic Prospects report released on Tuesday night.
The forecast is down from 7.2 percent growth in the previous year.
The government has set a target of 7.5 percent GDP growth in the current financial year.
The World Bank said that the growth of Bangladesh may increase slightly to 6.2 percent in the next financial year.
Read more: Bangladesh wants low-interest loan from World Bank amid economic woes
According to the report, the economy of Bangladesh is being affected due to the global context. “Bangladesh’s economy is affected by the global situation and the sharp increase in fuel prices in the international market,” it said.
As a result, there has been a disruption in power supply to industries and households. Industrial production has been disrupted. The government had to do load-shedding to deal with the situation. Apart from this, buying of cars has been stopped as well as luxury goods have been discouraged, the World Bank report said.
Earlier, the Asian Development Bank (ADB) predicted a 6.6 percent GDP growth in Bangladesh in the current fiscal year. The ADB's growth forecast was based largely on a slowdown in domestic consumption demand, a decline in exports and remittances, and a slowdown in the global economy.
Read more: Bangladesh wants open, transparent relationship with World Bank: PM
World Bank: Recession a looming threat for global economy
The global economy will come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies — the United States, Europe and China — the World Bank warned on Tuesday.
In an annual report, the World Bank, which lends money to poorer countries for development projects, said it had slashed its forecast for global growth this year by nearly half, to just 1.7%, from its previous projection of 3%. If that forecast proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020.
Though the United States might avoid a recession this year — the World Bank predicts the U.S. economy will eke out growth of 0.5% — global weakness will likely pose another headwind for America’s businesses and consumers, on top of high prices and more expensive borrowing rates. The United States also remains vulnerable to further supply chain disruptions if COVID-19 keeps surging or Russia’s war in Ukraine worsens.
And Europe, long a major exporter to China, will likely suffer from a weaker Chinese economy.
The World Bank report also noted that rising interest rates in developed economies like the United States and Europe will attract investment capital from poorer countries, thereby depriving them of crucial domestic investment. At the same time, the report said, those high interest rates will slow growth in developed countries at a time when Russia’s invasion of Ukraine has kept world food prices high.
“Russia’s invasion of Ukraine has added major new costs,” World Bank President David Malpass said on a call with reporters. “The outlook is particularly devastating for many of the poorest economies where poverty reduction is already ground to a halt and access to electricity, fertilizer, food and capital is likely to remain limited for a prolonged period.”
The impact of a global downturn would fall particularly hard on poorer countries in such areas as Saharan Africa, which is home to 60% of the world’s poor. The World Bank predicts per capita income will grow just 1.2% in 2023 and 2024, which is such a tepid pace that poverty rates could rise.
Read more: Emerging, developing economies less prepared for downturn than 10 years ago: World Bank
“Weakness in growth and business investment will compound the already devastating reversals in education, health, poverty and infrastructure and the increasing demands from climate change,” Malpass said. “Addressing the scale of these challenges will require significantly more resources for development and global public goods.”
Along with seeking new financing so it can lend more to poorer countries, Malpass said, the World Bank is, among other things, seeking to improve its lending terms that would increase debt transparency, “especially for the rising share of poor countries that are at high risk of debt distress.”
The report follows a similarly gloomy forecast a week earlier from Kristina Georgieva, the head of the International Monetary Fund, the global lending agency. Georgieva estimated on CBS’ “Face the Nation” that one-third of the world will fall into recession this year.
“For most of the world economy, this is going to be a tough year, tougher than the year we leave behind,” Georgieva said. “Why? Because the three big economies — U.S., EU, China — are all slowing down simultaneously.”
The World Bank projects that the European Union’s economy won’t grow at all next year after having expanded 3.3% in 2022. It foresees China growing 4.3%, nearly a percentage point lower than it had previously forecast and about half the pace that Beijing posted in 2021.
The bank expects developing countries to fare better, growing 3.4% this year, the same as in 2022, though still only about half the pace of 2021. It forecasts Brazil’s growth slowing to 0.8% in 2023, down from 3% last year. In Pakistan, it expects the economy to expand just 2% this year, one-third of last year’s pace.
Other economists have also issued bleak outlooks, though most of them not quite as dire. Economists at JPMorgan are predicting slow growth this year for advanced economies and the world as a whole, but they don’t expect a global recession. Last month, the bank predicted that slowing inflation will bolster consumers’ ability to spend and power growth in the United States and elsewhere.
Read more: World Bank dims outlook for global economy amid Russia war
“The global expansion will turn into 2023 bent but not broken,” the JPMorgan report said.
World Bank okays $250m for Bangladesh for better environmental management, green investments
The World Bank on Thursday (December 01, 2022) approved $250 million in financing to help Bangladesh strengthen its environmental management and promote private sector participation in green investment.
The Bangladesh Environmental Sustainability and Transformation (BEST) Project will support the Department of Environment to strengthen its technical and administrative capacity.
The project will also help improve environmental regulations and enforcement to curb pollution and improve environmental quality, according to the World Bank.
Read more: Every country is struggling to cope, and Bangladesh is no exception: WB Official
Bangladesh Environmental Sustainability and Transformation will pilot new financing mechanisms to promote green investments in targeted sectors. It will also establish a Green Credit Guarantee Scheme to incentivise the financial sector to support green investments to reduce air pollution.
Successful implementation of the project will help Bangladesh tackle key pollution issues, benefitting over 21 million people living in Greater Dhaka and beyond, the World Bank said.
"Bangladesh's rapid economic growth and urbanisation have come at a high environmental cost in terms of pollution. Not only that the pollution is impacting our health, but also it is eroding the country’s economic competitiveness," said Dandan Chen, World Bank acting country director for Bangladesh and Bhutan.
Read more: WB lauds Bangladesh development under PM Hasina's leadership
Bangladesh Environmental Sustainability and Transformation will strengthen the country's environmental institutions to better control pollution and promote sustainable development, he added.
The project will help construct four vehicle inspection centres using a private-public partnership modality to inspect about 46,000 vehicles annually.
An e-waste management facility will be set up to process 3,500 metric tons of e-waste annually.
Read More: 7.1 million Bangladeshis displaced by climate change in 2022: WHO
The project will help reduce over 1 million metric tons of greenhouse gas emissions from targeted sources, according to the World Bank.
"In newspapers, we regularly see reports on Dhaka's high level of air pollution. The World Bank estimate shows that in 2019, air pollution and lead exposure are responsible for more than one-fifth of the deaths in Bangladesh, costing about 12 percent of the country's GDP," said Jiang Ru, World Bank senior environment specialist and task team leader for the project.
"Strong environmental regulations and strict environmental enforcement will incentivise the private sector to invest in pollution control and green growth and thus help the country to achieve its target of net-zero emissions by 2050."
Read More: EU shakes up climate talks with surprise disaster fund offer
The project will also set up a first-ever network of 22 continuous surface water quality monitoring stations to start monitoring of water quality of Dhaka rivers and targeted international rivers in real-time.
It will also establish continuous water quality monitoring stations to ensure the environmental compliance of selected industrial effluent treatment plants.
The credit is from the World Bank's International Development Association, which provides concessional financing, and has a 30-year term with a five-year grace period.
Read More: UNICEF wants investment in world's first child-focused climate risk financing solution
Initiative to develop logistics industry: Baby steps taken with World Bank guidance
To gather inputs from national and international experts for an integrated and efficient Logistics Industry Development Policy and to frame a holistic system both in terms of infrastructure and service development a workshop on “Formulation of National Logistics Industry Development Policy for Bangladesh: Experience from Global Good Practices” was organized by the Ministry of Industries (MoI), Business Initiative Leading Development (BUILD), and the World Bank Group (WBG) at the InterContinental on November 16-17, 2022 in Dhaka.
The workshop aimed to present good global practices in formulating the proposed National Logistics Industry Development Policy and gathering expert opinions from national and international sectoral specialists, stakeholders, public sector representatives, and development partners.
In the first session of the closing days on 17 November 2022 titled “Balancing Multimodal Transport System for Logistics Competitiveness” two keynotes were presented by A B M Amin Ullah Nuri, Secretary of Road Transport and Highways Division, and Martha B Lawrence, Global Lead of the Regional Connectivity and Logistics Knowledge Group at the World Bank while Md. Mostafa Kamal, Secretary of the Ministry of Shipping grace the session as chair.
Read more: No alternative to synchronised multimodal logistics management system: BUILD
The Secretary of RTHD informed that initiatives need to be taken to update and implement the National Integrated Multimodal Transport Policy 2013 by portraying dedicated development strategies for different modes of transportation addressing.
WB representative in her keynote requested a comprehensive focus on logistics efficiency, quality of logistics, improvement of the logistics infrastructure, and regional connectivity while formulating the National Logistics Industry Development Policy to develop a balanced multimodal transport system.
By considering the improvement of the logistics scenario as one of the most priority issues, the government has taken several mega projects. But, without the full automation of the Customs and NBR procedure, all the initiatives will go into vain. Harmonized coordination among the public, private, and development partners is the single key to reaching the multimodal logistics management system to a global height, pointed out by Md. Mostafa Kamal, Secretary, Ministry of Shipping.
The government of India has invested 99,000 crore rupees through the Sagarmala PPD Model Project to ensure port-led economic growth by considering their potential coastal areas, informed by Abul Kasem Khan, Co-chair of LIDWC, BUILD. Policymakers should consider the global good practices and strategies of India, China, Singapore, Hong Kong, etc. to design the nation’s logistics policy and strategy. Necessary policy reforms need to be ensured by removing the regulatory bottlenecks to attract waited for domestic and foreign investment in the logistics sector. “National Forum for Formulating National Logistics Industry Development Policy” would be formed where LIDWC will provide research assistance with the support of World Bank Group, he added.
Md. Nurul Islam Sujan MP, Hon'ble Minister, Ministry of Railways graced the closing session of the workshop as chief guest. There is no alternative to ensure transport cost efficiency without the modern railway system. Ongoing projects of the Ministry of Railways will connect Bangladesh to Trans-Asian Railway Network and that will lead to exploring new export markets with diversified products. To make Bangladesh a multimodal logistics hub of the South Asian region, the Ministry of Railways will extend all possible assistance in a coordinated manner, assured by the Hon’ble Railways Minister.
Chair of the closing session, Nihad Kabir, BUILD Chairperson highly appreciated the initiatives of the Ministry of Railways for taking several policy reforms and projects to improve the freight and passenger transportation management system in Bangladesh.
Dr Shomik Raj Mehndiratta, Practice Manager, Transport, South Asia, World Bank informed that as the development partner of Bangladesh Government, they have been assisting in the infrastructure development of rail, road, waterways, bay terminal, land port modernization, etc. Now it is high time to focus on the private sector’s demanded regulatory reforms to ensure sustainable development of the logistics scenario in Bangladesh.
Martin Holtmann, Country Manager (Bangladesh, Bhutan, and Nepal), IFC, highly appreciated the improvement of the logistics environment of Bangladesh in the last few years by implementing policy reforms and infrastructure projects that will ultimately put huge momentum in GDP and economic growth of the nations by reducing the logistic cost. IFC will be glad to provide all sorts of assistance to formulate a national logistics industry development policy, he added.
An outcome report of the workshop will be prepared and presented by BUILD through the upcoming meeting of the Logistics Infrastructure Development Working Committee at the Prime Minister’s Office very soon when all the speakers of the two-day workshop will be invited to validate the placed recommendations and way forwards to formulate a visionary National Logistics Industry Development Policy of Bangladesh, addressed by Ferdaus Ara Begum, CEO of BUILD as the wrap-up remarks of the workshop.
Read more: The Emerging Logistics Tech Startups, Courier, Delivery Services in Bangladesh
Bangladesh wants low-interest loan from World Bank amid economic woes
Finance Minister AHM Mustafa Kamal on Sunday sought extensive concessional loan from the World Bank to help Bangladesh weather the economic shocks caused by Russia-Ukraine war and the Covid-19 pandemic.
Kamal sought the assistance from the International Development Association (IDA), the soft-lending widow of the bank, during a meeting with the visiting World Bank Vice President for the South Asia Region Martin Raiser at Secretariat office, the ministry sources said.
Abdoulaye Seck, WB’s newly designated country director for Bangladesh and Bhutan, was also present at the meeting.
Read more: Bangladesh's strong growth could be at risk without urgent climate action: World Bank
The WB officials arrived in Dhaka on Sunday on a 3-day visit to discuss Bangladesh’s request for a new loan to tide over the current economic woes and economic reforms.
The visit takes place close on the heels of the International Monetary Fund (IMF) agreeing to lend $4.5 billion to Bangladesh as the country strives to stabilize its declining foreign exchange reserves and the balance of payments.
During the visit Raiser will also meet Prime Minister Sheikh Hasina and other senior government officials.
Before the visit Raiser said, “I am glad to be back in Bangladesh and to continue discussing with the government the important reforms that can help the country stay on the resilient and inclusive growth path and create opportunities for the people,”
The finance minister thanked the World Bank for working on a Technical Assistance project named “Beautification of Dhaka” to ensure environmental restoration and navigability of rivers around Dhaka city and to enhance the beauty of Dhaka.
Kamal also discussed the progress of various projects under implementation with World Bank loan assistance.
Read more: World Bank Vice President Martin Raiser arrives Saturday
Bangladesh has received $1.0 billion in budget support from 2019 to April 2022. It is expected that another $500 million in budget support will be available in the current financial year. Green, Resilience, Inclusive Development (GRID) DPC is expected to get 500 million in the next 2 fiscal years, he said.
A loan proposal of $6.15 billion is in the pipeline for the period 2023-2025.
Kamal termed the World Bank as one of the important development partners of Bangladesh adding that since 1972, Bangladesh has received $37 billion in loan and grant assistance from the World Bank.
“Of which $26.6 billion have been remitted. We have paid $6.36 billion in interest and principal so far,” he added.
Fatima Yasmin, Senior Secretary of Finance ministry, Sharifa Khan, Secretary of the Economic Relations Division, Guangze Chen, Regional Director, and Dandan Chen, Acting Country Director of World Bank, were present at the meeting.
World Bank Vice President Martin Raiser arrives Saturday
World Bank Vice President for the South Asia Region Martin Raiser is scheduled to arrive in Dhaka on Saturday to discuss with the government the important reforms that can help the country stay on the resilient and inclusive growth path.
“I am glad to be back in Bangladesh and to continue discussing with the government the important reforms that can help the country stay on the resilient and inclusive growth path and create opportunities for the people,” said Raiser.
Read more: Bangladesh's strong growth could be at risk without urgent climate action: World Bank
He will be accompanied by the incoming Country Director for Bangladesh and Bhutan, Abdoulaye Seck, said the global lending agency on Friday.
During his three-day visit, Raiser will meet with Prime Minister Sheikh Hasina and Finance Minister AHM Mustafa Kamal, along with other senior government officials.
He will introduce Seck, who will assume the position of the World Bank Country Director for Bangladesh and Bhutan on January 1, 2023. They will also visit a World Bank-supported project.
“Bangladesh has an impressive record in many aspects of development, including poverty reduction, climate change adaptation and disaster-risk preparedness, and gender parity in school enrollment, to name a few, '' said Seck.
“I look forward to working closely with the government and people of Bangladesh as the country works toward the goal of achieving upper-middle income status by 2031.”
Read more: Currency depreciations risk intensifying global food, energy crisis: World Bank
A Senegalese national, Seck joined the World Bank in 1995 as an economist and has since held leadership positions in different countries.
Prior to taking this assignment, Seck served as the Country Director for Cameroon, the Central African Republic, Equatorial Guinea, Gabon, and the Republic of Congo.
He also served as the World Bank Country Manager for Afghanistan, Myanmar, and Moldova.
The World Bank was among the first development partners to support Bangladesh following its independence.
Since then, the World Bank has committed more than $37 billion in grants, interest-free, and concessional credits to the country. Bangladesh currently has the largest ongoing International Development Association (IDA) program totaling over $15.7 billion in 55 active projects.
Unprecedented shocks exacerbating challenges, dampening growth in South Asia: World Bank
Beset with Sri Lanka's economic crisis, Pakistan's catastrophic floods, a global slowdown, and the impacts of the war in Ukraine, South Asia faces an unprecedented combination of shocks on top of the lingering scars of the Covid, the World Bank said in its twice-a-year update.
Released Thursday, the latest "South Asia Economic Focus, Coping with Shocks: Migration and the Road to Resilience," projects regional growth to average 5.8 percent this year – a downward revision of 1 percentage point from the forecast made in June. This follows the growth of 7.8 percent in 2021 when most countries were rebounding from the pandemic slump.
While economic distress is weighing down all South Asian countries, some are coping better than others.
Exports and the services sector in India, the region's largest economy, have recovered more strongly than the world average while its ample foreign reserves served as a buffer to external shocks.
The return of tourism is helping to drive growth in the Maldives, and to a lesser extent in Nepal – both of which have dynamic services sectors.
The combined effects of Covid and the record-high commodity prices due to the war in Ukraine took a heavier toll on Sri Lanka, exacerbating its debt woes and depleting foreign reserves. Plunged into its worst-ever economic crisis, Sri Lanka's real GDP is expected to fall by 9.2 percent this year and a further 4.2 percent in 2023.
Read: Tier-2 cities like Gazipur, Narayanganj must promote urban growth outside Dhaka: World Bank
High commodity prices also worsened Pakistan's external imbalances, bringing down its reserves. The country's outlook remains subject to significant uncertainty after devastating climate-change-fueled floods submerged one-third of the country this year.
"Pandemics, sudden swings in global liquidity and commodity prices, and extreme weather disasters were once tail-end risks. But all three have arrived in rapid succession over the past two years and are testing South Asia's economies," Martin Raiser, World Bank Vice-President for South Asia said.
"In the face of these shocks, countries need to build stronger fiscal and monetary buffers, and reorient scarce resources towards strengthening resilience to protect their people."
Inflation in South Asia, caused by elevated global food and energy prices and trade restrictions that worsened food insecurity in the region, is expected to rise to 9.2 percent this year before gradually subsiding. The resulting squeeze on real income is severe, particularly for the region's poor who spend a large share of their income on food.
South Asia's migrant workers, many of whom are employed in the informal sector, were disproportionately affected when restrictions on movement were imposed during Covid. However, the later phase of the pandemic has highlighted the crucial role migration can play in facilitating recovery.
Survey data from the report suggests that in late 2021 and early 2022, migration flows are associated with movement from areas hit hard by the pandemic to those that were not, thus helping equilibrate the demand and supply of labour in the aftermath of the Covid shock.
Read: Without reforms, Bangladesh’s GDP could fall below 4% by 2035: World Bank study
"Labour mobility across and within countries enables economic development by allowing people to move to locations where they are more productive. It also helps adjust to shocks such as climate events to which South Asia's rural poor are particularly vulnerable," Hans Timmer, World Bank chief economist for South Asia, said. "Removing restrictions to labour mobility is vital to the region's resilience and its long-term development."
IFC pledges $6 billion to tackle food insecurity
The World Bank’s private sector arm International Financial Corporation (IFC) has launched a fresh $6 billion financing facility to strengthen the private sector's ability to respond to food insecurity crisis and help support production in countries affected by food instability, a statement said Tuesday.
A core part of the financing, which will be provided through the new Global Food Security Platform, will support sustainable production and delivery of food stocks, it said.
The $6 billion will be used to support private sector companies along the food value chain by leveraging IFC's sectoral expertise in agribusiness, manufacturing, infrastructure, and technology, as well as the financial sector and trade finance.
Read IFC-led PaCT helped factories cut carbon and water footprints: BGMEA
"By strengthening supply chains and ensuring that people have access to and can grow affordable food, this initiative will contribute to building resilient food systems in the most vulnerable regions," said Makhtar Diop, IFC’s Managing Director.
The war in Ukraine and an uneven global recovery from the COVID-19 pandemic have added to rising levels of hunger and malnourishment, which already have been worsened by climate change and increasingly severe weather events that are damaging harvests and reducing yields.
The Platform will supplement the World Bank's commitment of US$30 billion in response to the food crisis as IFC is also stepping up engagements with other partners, including development finance institutions, foundations, banks as well as a range of private companies.
Read Patenga Container Terminal: PPPA signs transaction advisory services agreement with IFC
The $6 billion support will be aimed at facilitating trade of food commodities, delivery of inputs to farmers, supporting efficient production in major origins, including Ukraine, and effective distribution of food products in destination countries, according to the statement.The money will also help improve the resilience of the global food system and lessen its climate and ecological footprint.
This includes investing in increasing efficient crop production, improving access to fertilizers, greening fertilizer production and use, reducing crop loss and food waste, improving supply chain efficiency, and mitigating infrastructure bottlenecks.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets including Bangladesh. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries.
Read Implement Teesta management and restoration master plan: IFC
Tier-2 cities like Gazipur, Narayanganj must promote urban growth outside Dhaka: World Bank
Bangladesh has made remarkable economic progress in the past five decades. To sustain and further accelerate the growth rate in the long term, the country needs a strong reform agenda, says a new report by the World Bank (WB).
The World Bank Dhaka office in a release on Thursday quoted Nora Dihel, Senior Trade Economist: “Greater Dhaka generates one-fifth of the country’s GDP and almost half of its formal employment. The already congested capital needs to be prepared to accommodate climate migrants,”
“Better urbanization and connectivity will help absorb the climate migrants and sustain fast productivity growth. Successful urbanization will mean attracting tradable activities to small and medium-sized cities,” she said.
This will require making the next tier of cities attractive to formal firms and skilled workers. Cities will need to raise their own revenues to finance infrastructure investments and the provision of services, including affordable housing. Faster broadband speeds, better access to basic services, and easier intercity transport connectivity can lead to tier-2 cities like Gazipur and Narayanganj promoting urban growth outside Dhaka.
Although digitalization of payments has increased rapidly with 34 percent of adults using digital payments in 2017 in comparison to 7 percent of adults in 2014, about 40 percent of adults do not have a bank account. Strengthening credit infrastructure and promoting further digitalization of financial services will be important to reach the most underserved population.
The report urges strong policy reforms in three areas critical to sustaining growth: stem the erosion of trade competitiveness, address vulnerabilities in the financial sector, and ensure an orderly urbanization process.
Read: Without reforms, Bangladesh’s GDP could fall below 4% by 2035: World Bank study
The report also explores the implications of digital development and climate change as cross-cutting themes in these reform areas.
“Over the past decade, Bangladesh has been among the top 10 fastest growing economies,” said Dandan Chen, World Bank Acting Country Director for Bangladesh and Bhutan.
“But there is no room for complacency. New and emerging challenges—including, advances in technology and climate change—demand new policy and institutional innovations to cater to the changing needs of a growing economy. To achieve its vision of upper middle-income country by 2031, Bangladesh will need strong and transformative policy actions.” Chen said.
The report envisages export diversification to reduce the risk of export volatility, create new sources of growth, and increase foreign exchange earnings in the long term.
The heavy reliance on ready-made garments and Bangladesh’s protective tariff regime inhibits diversified export growth. Further, with trade competitiveness based on low wages and trade preferences eroding, the country can increase the resilience of economic growth by diversifying its export basket.
The WB report said the average tariffs in Bangladesh are higher than its comparator countries: the average tariff rate on intermediate goods in Bangladesh is 18.8 percent, which is about twice the rate as in China, Thailand, and Vietnam.
Overall trade costs and inefficient border processes are major impediments to trade. Deep and comprehensive trade agreements with the European Union and India covering tariff modernization, increased trade facilitation, and services and investment reforms can boost Bangladesh’s GDP by 0.4 and 0.5 percent and exports by 1.4 and 3.9 percent, the report said.
Scaling up private sector financing is essential for sustaining economic growth. Actions to improve asset quality, increase the capitalization of banks, and address increasing non-performing loans are urgently needed to maintain financial stability and accelerate credit growth.
Read: Bangladesh made impressive achievements in economic growth: World Bank VP
Unlike Thailand, China and Vietnam, Bangladesh has an untapped domestic capital market, which is required for raising long-term finance, particularly for infrastructure and climate adaptation projects.
Unlocking private sector financing for green investments and climate risk financing will become increasingly important. The country also needs to focus on expanding access to finance in underserved segments, such as women and MSMEs.
Bangladesh also needs to source external resources proactively, including through international capital markets, by promoting local currency financing, easing external borrowing constraints, and attracting foreign direct investment.