World Bank forecasts 5.6% growth in FY24

The World Bank has predicted that the growth of Bangladesh's Gross Domestic Product or GDP is likely to go down to 5.6 percent in the current financial year 2023-24.

Earlier in October last year, the WB lowered its growth projection for Bangladesh to 5.7 percent, which, it forecast, will see 9 percent average inflation due to high energy cost, import curbs, insufficient dollars in banks and sluggish monetary tightening.

The Dhaka office of the World Bank disclosed the Bangladesh chapter of the report on Tuesday from a briefing where World Bank Economist Ranjit Ghosh presented the keynote. World Bank Country Director Abdoulaye Seck was also present.

According to the World Bank, the growth rate will pick up slightly to 5.7 percent in 2024-25.

However, it stated that failure to address several risks may put the economy under more pressure than the projection.

World Bank believes that prevailing inflation, balance of payment deficit and financial sector weakness are hindering the economic growth of Bangladesh. However, some positive steps have also been taken, says the organization. These include adjusting fuel prices, reducing export subsidies and tightening monetary policy.

Abdoulaye Seck said many families are suffering due to high inflation. "Import controls may create supply shortages. Bank defaults are very high. The World Bank is ready to help bring reforms in this sector."

"Proper guidelines should be carefully followed in merger of banks. Market based exchange rate should be done. All in all, Bangladesh is facing several challenges," he added.

According to the report, regional growth in South Asia in 2023-24 is likely to be 6 percent. And in 2024-25 it will be 6.1 percent. India, Bangladesh will play a key role in this. Moreover, the situation in Pakistan and Sri Lanka is also improving.

According to the World Bank, India will achieve 7.5 percent GDP growth in the fiscal year 2023-24. In Pakistan, it will be 1.2 percent in FY 2023-24.

In addition, the World Bank has predicted that in the fiscal year 2023-24, 4.9 percent growth will be achieved in Bhutan, 3.3 percent in Nepal, 2.2 percent in Sri Lanka, and 4.7 percent in the Maldives.