GDP
Bangladesh economy’s remarkable progress in 50 years
Bangladesh’s socio economic development over the past 50 years has been surprising despite problems of alleged corruption, poor intuitional capacity and natural disasters.
Dismissed as a basket case at independence in 1971, Bangladesh has braved stiff hurdles to become self-sufficient in food grains production and made good progress in manufacturing sector too.
This remarkable progress is best illustrated by a chronology of the national budgets since 1972.
Also read: PM: US$1500 million under way as budgetary support
In 1972, the budget of Bangladesh was Tk 786 crore while the gross domestic product (GDP) was USD $6.288 billion. As per the GDP, per capita income was $94.4 or Tk566 in 1972 and the population was about 70 million.
In the fiscal year 2021-22 the country’s budget size swelled to Tk 603681 crore ($ 71 billion), the estimated GDP was $465 billion. The population Bangladesh is stood at over 160 million in 2021.
The provisional estimate for per capita income in 2021-22 was $2,824, up from $2,591 in the previous year, accoding to a Bangladesh Bureau of Statistics report. “In nominal terms, Bangladesh's GDP stands at $465 billion in the current fiscal year.
Braving flood, cyclone and drought, the economy has grown steadily since the independence. Bangladesh has achieved remarkable success in food production, manufacturing and manpower export.
Bangladesh is characterized as a developing economy. It is the 41st largest in the world in nominal terms or at current prices, and 30th largest by purchasing power equivalence; international dollars at current prices.
Also read: Finance minister is set to unveil Tk6.80 tn national budget at JS on Thursday
At a glance Bangladesh’s budget:
Fiscal Year – by Whom - Annual Outlay-
1972-'73 Tajuddin Ahmed Tk 786 crore
1973-'74 Tajuddin Ahmed Tk 995 crore
1974-'75 Tajuddin Ahmed Tk 1,084.37 crore
1975-'76 Azizur Rahman Tk 1,549.19 crore
1976-'77 Maj Gen Ziaur Rahman Tk 1,989.87 crore
1977-'78 Lt. Gen. Ziaur Rahman Tk 2,184 crore
1978-'79 President Ziaur Rahman Tk 2,499 crore
1979-'80 MN Huda Tk 3,317 crore
1980-'81 M Saifur Rahman Tk 4,108 crore
1981-'82 M Saifur Rahman Tk 4,677 crore
1982-'83 AMA Muhith Tk 4,738 crore
1983-'84 AMA Muhith Tk 5,896 crore
1984-'85 M Sayeduzzaman Tk 6,699 crore
1985-'86 M Sayeduzzaman Tk 7,138 crore
1986-'87 M Sayeduzzaman Tk 8,504 crore
1987-'88 M Sayeduzzaman Tk 8527 crore
1988-'89 Maj Gen (rtd) Munim Tk 10,565 crore
1989-'90 Wahidul Haq Tk 12,703 crore
1990-'91 Maj Gen (rtd) Munim Tk 12,960 crore
1991-'92 M Saifur Rahman Tk 15,584 crore
1992-'93 M Saifur Rahman Tk 17,607 crore
1993-'94 M Saifur Rahman Tk 19,050 crore
1994-'95 M Saifur Rahman Tk 20,948 crore
1995-'96 M Saifur Rahman Tk 23,170 crore
1996-'97 Shah AMS Kibria Tk 24,603 crore
1997-'98 Shah AMS Kibria Tk 27,786 crore
1998-'99 Shah AMS Kibria Tk 29,537 crore
1999-'00 Shah AMS Kibria Tk 34,252 crore
2000-'01 Shah AMS Kibria Tk 38,524 crore
2001-'02 Shah AMS Kibria Tk 42,306 crore
2002-'03 M Saifur Rahman Tk 44,854 crore
2003-'04 M Saifur Rahman Tk 51,980 crore
2004-'05 M Saifur Rahman Tk 57,248 crore
2005-'06 M Saifur Rahman Tk 61,058 crore
2006-'07 M Saifur Rahman Tk 69,740 crore
2007-'08 AB Mirza Azizul Islam Tk 87,137 crore
2008-'09 AB Mirza Azizul Islam Tk 99,962 crore
2009-'10 AMA Muhith Tk 113,815 crore
2010-'11 AMA Muhith Tk 132,170 crore
2011-'12 AMA Muhith Tk 165,000 crore
2012-’13 AMA Muhith Tk 191,738 crore
2013-’14 AMA Muhith Tk 222,491 crore
2014-’15 AMA Muhith Tk 250,506 crore
2015-’16 AMA Muhith Tk 295,100 crore
2016-’17 AMA Muhith Tk 340,605 crore
2017-18, AMA Muhith Tk 4, 00,266 crore
2018-19, AMA Muhith Tk4, 64,573 crore
2019-20, AHM Mustafa Kamal Tk 5, 23,190 crore
2020-21 AHM Mustafa Kamal Tk 5, 68,000 crore
No need to worry about Bangladesh's debt situation right now: Official document
Bangladesh's total debt burden is currently far below the threshold level on both domestic fronts posing no threat to the economy, according to an official document.
For Bangladesh the comfortable level for total public debt is 70 per cent of GDP and external debt is 55 per cent of GDP.
The country's projected total debt (42.9 per cent of GDP) and external debt (16.4 per cent of GDP) by fiscal 2023-24 is far below the respective thresholds and do not pose any threat despite having a slight upward trend due the COVID-19 shock, according to the recent document.
Also read: No Chinese debt trap in Bangladesh: Chinese envoy
It said that prudent fiscal policy adopted by the government is expected to keep the public debt at a sustainable level over the medium term.
The country's debt sustainability analysis (DSA) by the World Bank-IMF shows that government debt remains at a low risk of debt stress despite the economic shock caused by the COVID-19 pandemic (IMF article IV report 2020).
External and domestic debt indicators are below their respective thresholds under the baseline and stress test scenarios until 2030.
The document said that composite index (CI) rating that is calculated by the above framework based on the country's real GDP growth, remittances, international reserves, world growth, and CPIA (Country Policy and Institutional Assessment) score is calculated 3.06 that suggest a strong debt carrying capacity.
The official document stated that Bangladesh has a solid and strong track record in debt service payments and the country's external debt stock is still reasonably low.
Projected external debt stock stands at 53.5 billion USD at the end of FY21, which is 14.7 per cent of the projected GDP.
The country's external debt service liability that includes amortisation of long term external debt and interest payments stands at 2.1 billion USD in FY21, which is 5.7 per cent of the projected export earnings and 3.6 percent of the projected revenue earnings in FY21.
The World Bank-IMF joint Debt Sustainability Analysis (DA) in 2019 assessed the threshold level of external debt service liability for Bangladesh is 21 per cent of its export and 23 per cent of government revenue.
This indicates that Bangladesh's external debt lies far below the danger level and the government has adequate repayment capability.
“However, the government should remain vigilant against any external development including exchange rate risk,” the document mentioned.
It said that the government usually provides guarantees/counter guarantees against loans incurred by the state-owned enterprises in line with government's priority sectors, such as power, energy,national aircraft carrier (i.e Biman Bangladesh Airlines Itd), and agriculture etc. These liabilities would come into effect only if the concerned enterprise fails to pay back the loan.
Also read: High value public debt spent on nonproductive sector causes imbalance in economy: CPD
As of May 2021, the face value of government guarantees/ counter guarantees stands at Tk. 1,066.6 billion and the outstanding amount of loan against those Guarantees is Tk. 738.4 billion, which is 2.1 percent of the projected GDP and 12.2 percent of the government expenditure in FY22.
Power and Energy sector alone accounts for 58.5 per cent of the outstanding contingent liabilities followed by Bangladesh Biman and Agriculture sector as 14.8 per cent and 6.7 per cent respectively.
Having such extent of contingent liabilities, the government has devised necessary monitoring system under a risk framework so that these guarantees do not turn into government liabilities.
“Rigorous monitoring and sovereign guarantee/counter guarantee guidelines issued by the government are expected to keep the contingent liabilities in control.”
The document stated that Implementation of the declared economic recovery program, providing adequate investment in the health sector including mass vaccination program, and implementation of expansionary monetary policy pursued by Bangladesh Bank would help for a sustainable economic recovery as the government has projected 7.2 per cent GDP growth in FY22.
At the same time, projected overall implicit interest rate that is calculated from the projected debt stock and interest payments is 5.3.
Favourable debt dynamics on the back of higher GDP growth compared to lower interest cost implied that projected government finance would not accumulate the public debt (Debt:GDP).
Slight upward trend in the debt-GDP ratio due to the winding fiscal deficit during the economic recovery period will not be a cause for concern as the revenue collection will boost in the medium term when the economy get back to its normal level.
Sovereign debt set to edge upwards in coming years
The government's debt, that is the country's sovereign debt, is projected to reach Tk 16,306.5 billion in the next 2022-23 fiscal, before growing to Tk 18,732.30 billion in 2023-24.
According to an official document, the sovereign debt is Tk 13,919.5 billion for the running 2021-22 fiscal.
In the 2023-24 fiscal, the government will get Tk 11568 billion from domestic sources while Tk 7164.30 billion from external sources.
In the 2022-23 fiscal, the government will get Tk 10021.70 billion from domestic sources while Tk 6284.80 billion from external sources.
In the running 2021-22 fiscal, the target was Tk 8674 billion from the domestic sources while Tk 5272.50 billion from external sources.
Also read: Bangladesh’s foreign debt far below risk limit: Economic review tells PM
In the 2020-21 fiscal’s revised budget, the debt was Tk 12037.70 billion with Tk 7489.20 billion domestic debt and Tk 4548.5 billion external.
The government's debt in 2019-20 fiscal was Tk 10062 billion where the domestic debt was Tk 6313.7 billion and external was Tk 3748.30 billion.
The document said that the government debt has been projected to edge up in the medium term in line with the pace of economic recovery.
Outstanding debt is projected to increase by 1.3 percentage point of GDP to Tk. 13.9 trillion (Domestic vs. external ratio 1.6:1) at the end
of fiscal 2021-22 from the revised target of fiscal 2020-21, as additional budget will be required for the health sector, including the cost of carrying out the
vaccination program and implementing the declared stimulus packages.
Government debt has been projected to rise in the subsequent years as the economic recovery path might be slow due to the advent of new variants of the COVID-19.
Also read: No chance of Chinese debt trap: FM
The government debt has been projected to 42.9 percent of GDP at the end of fiscal 2023-24 where domestic debt is 26.5 percent of GDP and external debt is 16.4 percent of GDP.
The projection is 42.1 percent of GDP at the end of fiscal 2022-23 where domestic debt is 25.8 percent of GDP and external debt is 16.2 percent of GDP.
The official document mentioned that additional government spending for implementing the declared fiscal stimulus package to foster economic recovery from the pandemic as well as weaker than expected revenue collection have been pushing up the government debt level slightly.
Considering the present trend in the revenue collection and the resulting fiscal deficit, total debt stock is projected to increase by 2.2 percentage point of GDP to Tk. 12.0 trillion in the revised budget from the original budget in FY21 where both domestic debt and external debt level rises by 1.1 percentage point.
As per the document, high GDP growth, stringent fiscal discipline, low interest cost that resulted from optimum borrowing mix, and stable exchange rate have contributed in stabilising government debt over the decade (fiscal 2010-11 to fiscal 2019-20).
Government's outstanding debt hovered around 35-36 percent of GDP during the decade.
It actually declined until fiscal 2017-18, but then the trend was reversed and the debt stood at 36.0 percent of GDP at the end of FY20.
Composition of the debt stock has changed as well in the last ten years.
Domestic debt increased gradually to 22.6 percent of GDP at the end of fiscal 2019-20 from 16.7 percent of GDP at the end of discal 2010-11.
External debt has declined gradually to 13.4 percent of GDP at the end of fiscal 2019-20 from 18.3 percent of GDP at the end of fiscal 2010-11.
Digital payments to boost Bangladesh GDP by 1.7pc: Report
Digital payments can boost Bangladesh’s annual GDP by 1.7 per cent, an addition of US$6.2 billion (Tk 50,058 crores) annually to the economy, according to a new report by the United Nations-based Better Than Cash Alliance and its member, the Bangladesh government’s flagship program a2i.
Planning Minister MA Mannan in an online event officially launched two publications titled ‘National Digital Payments Roadmap, Bangladesh 2022-2025’ and ‘Measuring progress to scale: Responsible digital payments in Bangladesh’.
According to the report, 53 per cent of the US$6.2 billion will come from digitizing just 30 per cent of micro-merchant transactions in the retail sector; 45 per cent from digitising credit disbursements in the agricultural sector; and the remaining from scaling digital wages in the informal ready-made garments (RMG) sector.
Responsible payments digitisation in these sectors, crucially prioritizing women, will help accelerate progress towards the Sustainable Development Goals by 2030.
The planning minister said digitisation can play a crucial role in country’s target to achieve the Sustainable Development Goals (SDGs) by 2030 and by 2041to transform into a fully developed state.
He said Bangladesh's economy has grown significantly in the last 13 years.
“We are moving forward towards being recognized as one of the top 25 economies in the world by 2035,” he said.
“It is one of the main commitments of our government and we are working diligently to achieve this goal by building a cash-less society, leaving no one behind,” he said.
READ: RMG workforce survey reveals seamless shift to digital payments
a2i Policy Advisor Anir Chowdhury said that there are many areas where the country has already witnessed remarkable adoption of digital payments.
As digital payments ecosystem grows in scale and complexity, its dependence on infrastructure increases commensurately, he added.
“We are leaving no stone unturned to ensure that we build a reliable and inclusive digital infrastructure that will serve as the foundation on which digital payments and services can be built,” he said.
Deputy Managing Director at the Better Than Cash Alliance Camilo Tellez said that Bangladesh has achieved remarkable progress towards the Digital Bangladesh vision.
He said that digital transactions have grown from 5 per cent to 20 per cent in 5 years – an impressive four-fold increase.
He mentioned that it has also withstood the impact of the pandemic by digitally delivering social safety payments, wages, and stimulus packages to citizens and industries.
“We look forward to continuing our work with the leaders of Bangladesh to advance digital payments nationwide, particularly for women, and sharing lessons from Bangladesh with our global Alliance members.”
Since joining the Better Than Cash Alliance in 2015, reports suggest that Bangladesh has made significant progress in moving towards a digital economy.
Based on the reports, the government has released the National Digital Payments Roadmap 2022-2025.
The roadmap identifies 22 solutions to build a safe, inter-operable and inclusive digital payments ecosystem over the next three years in the ready-made garment (RMG), retail, agriculture, health and education sectors.
Germany boosts defense budget above 2% of GDP
German Chancellor Olaf Scholz says Germany is committing 100 billion euros ($112.7 billion) to a special fund for its armed forces, raising its defense spending above 2% of its GDP.
Also read: NATO leaders meet to reassure allies near Russia, Ukraine
Scholz told a special session of the Bundestag in Berlin on Sunday that it was clear “we need to invest significantly more in the security of our country, in order to protect our freedom and our democracy.”
Germany had come under criticism for not investing adequately in its defense budget and not doing enough to respond to Russia's invasion of Ukraine.
Also read: Biden hits Russia with sanctions, shifts troops to Germany
On Saturday evening, the German government announced it would be sending weapons and other supplies directly to Ukraine to help troops against invading Russia forces.
China's GDP expands 8.1 pct in 2021
China's economy posted stable growth in 2021 despite challenges including sporadic epidemic resurgences and a complicated external environment, official data showed Monday.
The country's gross domestic product (GDP) expanded 8.1 percent year on year to 114.37 trillion yuan (about 18 trillion U.S. dollars) last year, the National Bureau of Statistics (NBS) said.
Read: Govt targets 17% expenditure of GDP for next two fiscals: Document
The pace was well above the government target of "above 6 percent," and put the two-year average growth at 5.1 percent, the data showed.
In the fourth quarter, the country's GDP expanded 4 percent year on year.
China's economy has continued stable recovery in 2021, leading the world in both economic development and epidemic control, the NBS said, while warning of the triple pressure of demand contraction, supply shocks and weakening expectations amid an increasingly complicated external environment.
Final consumption contributed 65.4 percent to the GDP expansion, while net exports contributed 20.9 percent, said NBS head Ning Jizhe at a press conference.
"China's growth was among the fastest in major economies in the world last year," said Ning, adding that the country's GDP is expected to account for more than 18 percent of the global total.
In breakdown, retail sales saw a notable recovery, jumping 12.5 percent year on year. Fixed-asset investment posted stable growth of 4.9 percent, while value-added industrial output expanded 9.6 percent from a year earlier.
Read: UBS revises India GDP forecast to 9.5% from 8.9% for FY22
The country's job market remained generally stable, with the surveyed urban unemployment rate standing at 5.1 percent, 0.5 percentage points lower than the same period in the previous year and meeting the government target of "below 5.5 percent."
The Chinese people are getting increasingly affluent in 2021, with per capita disposable income standing at 35,128 yuan, up 9.1 percent year on year in nominal terms.
Bangladesh’s economy to grow by 6.4% in 2021-22 FY: WB
The Bangladesh economy is expected to grow by 6.4 percent in the current 2021-22 fiscal year while 6.9 percent in the 2022-23 fiscal, the World Bank projected.
The World Bank made the projection in its 'Global Economic Prospects' report.
As per the World Bank estimate, the GDP growth was 5 percent in the last 2020-21 fiscal.
The World Bank report said South Asia’s economy rebounded in the second half of the year following a massive second wave of Covid-19 in mid-2021. “An improvement in domestic demand and resumption of exports contributed to strong growth in Bangladesh,” it says.
Bangladesh’s GDP is expected to reach 6.4 percent in FY2021/22 ending June 2022, and 6.9 percent in FY2022/23, due to growing services activity and firming exports of readymade garments.
The consumer inflation in major economies of the region has been above central banks’ targets since late 2019.
The World Bank report says the pandemic, and the emergence of the Omicron variant, could hinder economic activity by requiring additional mobility restrictions and undermining external demand.
Read: Govt targets 17% expenditure of GDP for next two fiscals: Document
It adds that risks to the outlook remain to the downside, while another risk stems from financing conditions.
Further upward price pressures may cause inflation expectations to become unanchored, worsening domestic financing conditions, eroding real incomes, and weakening the financial sector.
Climate risks are becoming more prevalent in South Asia as cyclones, floods, and droughts have become more frequent and as the costs of such events have increased.
The region is one of the most vulnerable to climate-induced increases in poverty, disease, child mortality and food prices.
The report states that the growth prospects have improved since June 2021, largely because of better prospects in Bangladesh, India, and Pakistan.
Read: Rebased GDP now official in national accounting
Regional growth is expected to accelerate to 7.6 percent in 2022 as pandemic-related disruptions fade, before slowing to 6.0 percent in 2023.
In most economies, monetary and fiscal policy are expected to remain broadly accommodative in 2022, but gradually shift to a focus on fiscal sustainability and anchoring inflation expectations.
Despite the upward revision to growth, output in 2023 is still projected to be almost 8 percent lower than projected before the pandemic.
Additionally, the pace of per capita income catch-up with advanced economies is expected to slow over the forecast horizon.
In the subregion excluding India, the report said, growth momentum will pick up over the forecast horizon and is expected to expand by 4.4 percent in fiscal year 2021/22.
According to the World Bank press release, following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID-19 variants and a rise in inflation, debt, and income inequality that could endanger the recovery in emerging and developing economies.
Global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world.
The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term.
In addition, a notable deceleration in major economies—including the United States and China—will weigh on external demand in emerging and developing economies.
At a time when governments in many developing economies lack the policy space to support activity if needed, new COVID-19 outbreaks, persistent supply-chain bottlenecks and inflationary pressures, and elevated financial vulnerabilities in large swaths of the world could increase the risk of a hard landing.
World Bank Group President David Malpass said the global economy is simultaneously facing Covid-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory.
“Rising inequality and security challenges are particularly harmful for developing countries. Putting more countries on a favorable growth path requires concerted international action and a comprehensive set of national policy responses.”
The slowdown will coincide with a widening divergence in growth rates between advanced economies and emerging and developing economies.
Growth in advanced economies is expected to decline from 5 percent in 2021 to 3.8 percent in 2022 and 2.3 percent in 2023—a pace that, while moderating, will be sufficient to restore output and investment to their pre-pandemic trend in these economies.
In emerging and developing economies, however, growth is expected to drop from 6.3 percent in 2021 to 4.6 percent in 2022 and 4.4 percent in 2023. By 2023, all advanced economies will have achieved a full output recovery; yet output in emerging and developing economies will remain 4 percent below its pre-pandemic trend.
For many vulnerable economies, the setback is even larger: output of fragile and conflict-affected economies will be 7.5 percent below its pre-pandemic trend, and output of small island states will be 8.5 percent below.
Meanwhile, rising inflation—which hits low-income workers particularly hard—is constraining monetary policy.
Globally and in advanced economies, inflation is running at the highest rates since 2008.
In emerging markets and developing economies, it has reached its highest rate since 2011.
Many emerging and developing economies are withdrawing policy support to contain inflationary pressures—well before the recovery is complete.
Govt targets 17% expenditure of GDP for next two fiscals: Document
The government has projected its expenditure to remain at 17 per cent of the GDP in the next two fiscal years defying the adverse impact of coronavirus, although the pandemic pulled down the rate slightly. In the current 2021-22 fiscal, the government expenditure has been set at 17.3 per cent of the GDP while it was 17.4 per cent of the GDP in the revised budget of the 2020-21 fiscal, according to an official obtained by UNB. According to the official budgetary document, government expenditure was 13.9 per cent of GDP in 2015-16 fiscal and declined to 13.6 per cent in 2016-17 fiscal.
Read: Rebased GDP now official in national accounting In the 2017-18 fiscal, the rate increased to 14.3 per cent of the GDP whereas the rate shot to 15.4 per cent in the 2018-19 fiscal. But in the 2019-20 fiscal it slightly went down to 14.9 per cent of the GDP. As per the document, with successful implementation of reforms in Public Financial Management, government expenditure has been increased since 2015-16 fiscal. "In the medium term (2023-24), the government intends to pursue a moderate consolidation path to keep budget deficit within a sustainable limit," the document said. It mentioned that due to the outbreak of coronavirus, the government has changed its spending priority to expand healthcare and provide stimulus programmes to achieve desired economic recovery. On the other hand, as per the document, the growth rate of nominal government expenditure fluctuated between 6 and 21 per cent over the 2015-16 fiscal to 2019-20 fiscal.
No fear of debt trap for Bangladesh: Minister
Planning Minister MA Mannan on Monday said there is no scope for Bangladesh to get stuck in debt trap noting that its foreign currency reserve is growing with lower rate of borrowing considering the size of GDP.
"There's no fear for Bangladesh to get into debt trap," he said while addressing a webinar.
Speaking as the chief guest, Minister Mannan said Bangladesh takes loan considering all aspects and thinking well before taking a decision.
He hoped that the bilateral relations between Bangladesh and China will be strengthened further.
Mannan also hoped that the investment of Chinese companies in Bangladesh will increase with an improved relation between the two countries.
The Planning Minister hoped that the Chinese government will take all necessary steps to help Bangladesh students who got stuck here due to Covid-19 to return to China for continuing their studies.
READ: Vaccination important to bring back things on track: Planning Minister
The Association of Bangladesh China Alumni (ABCA) organized the webinar on the occasion of ''72nd Anniversary of the founding of the People's Republic of China and 46th Anniversary of Establishment of Diplomatic Relations between Bangladesh and China''.
Humayun A Kamal, former Ambassador of Bangladesh to China, presented the keynote paper at the webinar presided by Ambassador Munshi Faiz Ahmad, President of ABCA and former Ambassador of Bangladesh to China.
READ: Police: Planning minister mugged of his mobile phone in capital
Yan Hualong, Minister Counselor and Deputy Chief of Mission, Embassy of the People's Republic of China in Bangladesh, participated in it as a special guest.
The webinar was presided by President of ABCA and former Ambassador of Bangladesh to China Munshi Faiz Ahmad while General Secretary of ABCA Dr Md Sahabul Haque delivered the welcome speech.
Director, Bangla Department, China Media Group Guangue Anandi, ABCA vice-president Prof Dr Md Mainul Islam, joint secretary Dr AAM Muzahid and joint-secretary, BCCCI Al Mamun Mridha also spoke.
ADB pegs Bangladesh's GDP at 6.8% this fiscal
The Asian Development Bank (ADB) has revised Bangladesh's growth forecast for the current fiscal amid fears of a third wave of the Covid pandemic.
In its latest report, the regional lender has pegged Bangladesh’s gross domestic product (GDP) growth at 6.8 percent in the current fiscal.
GDP is a monetary measure of the market value of all the final goods and services produced in a country in a specific time period.
Read:ADB unveils new partnership strategy for Bangladesh
The growth projection for the current fiscal reflects a strong recovery supported by strengthening manufacturing, continued expansion in the global economy and effective government recovery policies, the ADB said.
On the other hand, inflation is expected to slightly edge up to 5.8 percent and current account deficit to narrow down to 0.6 percent of GDP in financial year (FY) 22.
However, FY22 growth is expected to remain below pre-pandemic levels, as per the Asian Development Outlook (ADO) 2021 report released on Wednesday.
The main risk is the re-escalation of Covid infections in Bangladesh or major advanced economies, clipping domestic and external demand, according to the global lender.
Read: ADB okays $1.78 billion for Dhaka-Sylhet trade corridor
“The government’s policies for saving lives while protecting livelihoods underpinned the recovery process in Bangladesh, making it one of the few countries in the world sustaining commendable economic growth in recent difficult times,” said ADB Country Director Manmohan Parkash.
He said that prudent macroeconomic management, and efficient implementation of stimulus measures and social protection programmes have helped. "Continued efforts for job creation, quick vaccination, and improving domestic resource mobilization will further accelerate the recovery process."
Appreciating recent initiatives in the areas of financial inclusion, and expanding social protection, Parkash said, “Sustained reforms to increase business competitiveness, foreign investment, export diversification, skills development, and technology adoption will stimulate private sector investments and hasten economic recovery."
In FY22, improving consumer confidence and the government’s fiscal and monetary stimulus measures are expected to boost private and public investment.
Read: ADB lowers its economic growth forecast for developing Asia
The central bank’s expansionary and accommodative monetary policy is expected to support the projected growth while keeping inflation contained. Strong remittances will stimulate private consumption, the ADB said.
Inflation is expected to edge up to 5.8 percent in FY2022 reflecting recovery in economic activity. Continued implementation of the increased fiscal and monetary stimulus measures is expected to create inflationary pressures.
A good crop outlook, consumer caution and underutilized production capacity should mitigate any upward pressure on prices. Domestic administered prices for fuel may cushion the impact of increased crude oil prices, the report said.