World Bank (WB) keeps Bangladesh’s growth rate for the outgoing fiscal year unchanged at 7.3% with strong infrastructure spending, private investment and domestic consumption.
However, the government estimated 8.13% GDP growth for the fiscal year 2018-19 to end on June 30. In the last fiscal year, Bangladesh attained 7.86% growth.
The global lender made the estimation in its flagship report titled “Global Economic Prospects: Heightened Tensions, Subdued Investment” released Tuesday, which also projected that the global economy would slowdown in the outgoing year.
“In Bangladesh, Gross Domestic Products (GDP) is estimated to expand by 7.3% in Fiscal Year 2018-19 as a recovery in remittance inflows, stemming from improving economic activities in source countries supported private consumption,” said the World Bank report.
For India, the growth is projected at 7.5%, for Pakistan at 3.4%, for Sri Lanka at 3.5% and for Nepal at 7.1%.
Earlier in April, the bank said Bangladesh was among the five fastest-growing economies of the world, despite insufficient private sector investment, with a 7.3% GDP growth projection in the FY2019.
“While private investment benefited from improved outlook for political stability, public investment was underpinned by progress in infrastructure projects,” mentioned the report.
Activities would be underpinned by strong infrastructure spending and solid private investment with some easing of infrastructure constraints, it said, adding that slowing activities in major trade partners’ economies such as the Unites States and the Euro Area would constrain the contribution of net exports to growth next fiscal year.
Meanwhile, the global lender also warned Bangladesh about the fallout of Brexit and trade tension.
“Uncertainty about the Brexit process poses a risk to some South Asian economies including Bangladesh, India, Pakistan, Sri Lanka, which have preferential trade agreements or generalized system of preferences with the European Union and significant exports to United Kingdom,” said the WB
A no-deal Brexit could have a significant impact on exports of those countries to the UK in the absence of new trade agreements, it added.
“South Asia is also vulnerable to the effects of climate change, such as natural disasters, which tend both to increase inflation and weigh on activity through supply disruptions, especially in the agricultural sector,” it said.
South Asia, as a net oil-importing region, was vulnerable to oil price spikes, it said, adding that a sudden increase in oil prices would tend to worsen current account balances and elevate inflation in the region.
Meanwhile, the WB bank also projected that the world economy was expected to grow by 2.6% this year.
“Stronger economic growth is essential to reducing poverty and improving living standards,” said World Bank Group President David Malpass. Current economic momentum remained weak, while heightened debt levels and subdued investment growth in developing economies were holding countries back from achieving their potential, said David.
Growth in the emerging and developing world was expected to pick up next year as the turbulence and uncertainty that afflicted a number of countries late last year and this year receded, the report said.
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