In the latest Asian Development Bank (ADB) report, Bangladesh’s GDP is forecasted to expand by 6.5% in FY2024, exceeding the 6.0% growth seen in the previous fiscal year. This uptick is attributed to improved domestic demand and stronger export growth driven by the euro area’s economic recovery.
Inflation is predicted to decrease from 9.0% in FY2023 to 6.6% in the current fiscal year, while the current account deficit is expected to narrow from 0.7% to 0.5% of GDP in FY2024, primarily due to remittance growth. The main risk to this growth projection is weaker global demand, which could impact export growth.
The report highlights the government’s effective management of external economic uncertainties and emphasizes the significance of structural reforms, including enhancements in public financial management, domestic resource mobilization, logistics, and financial sector deepening. These reforms are vital for private sector development, export diversification, and job creation.
Additionally, the report notes that moderate inflation and increased remittances will stimulate private consumption, while the completion of major government infrastructure projects will boost investment. However, initial higher interest rates resulting from changes in the monetary policy framework may dampen private investment, although inflation is expected to ease due to falling global non-fuel commodity prices and monetary policy tightening.
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