Published at: The Financial Express, March 05, 2019
Bangladesh economy is likely to grow at a rate of 7.5 per cent in the ongoing fiscal year (FY), 2018-19, the Asian Development Bank (ADB) has projected afresh.
The newly forecasted gross domestic product (GDP) growth rate is much lower than the 7.9 per cent growth, which ADB forecasted for Bangladesh in the previous FY, 2017-18. The country achieved a 7.86 per cent growth in the last fiscal.
The ongoing US-China trade war will be the main reason behind this slower growth, officials of the multilateral development financier said, while revealing its Regional Economic Outlook during a seminar in the capital on Monday.
On the other hand, domestic demand will be the main driver of this forecasted growth, ADB analysis said.
Meanwhile, the Manila-based development bank also identified a number of challenges for the Bangladesh economy that can impact its growth in short- and long-term.
The prevailing high interest rate on bank loans, which is causing massive capital flight from the country, is among the challenges, the ADB experts observed.
Besides, there is a possibility of global economic instability once the Brexit gets implemented, they noted, while warning that this can have a negative impact on the country’s economy.
In addition, the prices of oil may increase further in the near future due to global economic unrest.
At the same time, there are possibilities of job losses in the ready-made garments (RMG) sector due to technological changes, which may put the national economy at further risk, the ADB experts opined.
ADB Chief Economist Yasuyuki Sawada delivered the keynote presentation during the event.
Speaking on the occasion, Commerce Minister Tipu Munshi said although the ongoing US-China trade war may have some negative impact on Bangladesh economy, the country can benefit from this trade war by taking appropriate initiatives.
He also pointed out that the government has taken various steps to ensure fair wage and better working environment for the workers in RMG sector.
Prime Minister’s Economic Affairs Adviser Dr. Mashiur Rahman, in his speech, observed that although technological advancement can cause loss of employment, new opportunities can be created, if people are trained with new skills.
ADB Country Director in Bangladesh Manmohan Parkash in his speech called for increased diversification of export items to increase Bangladesh’s share in the global trade.
At the same time, the country needs to tap into the increased domestic demand to continue the growth momentum, he added.
The ADB officials projected that RMG may continue playing the pivotal role in Bangladesh’s economic growth in the coming years also.
In addition, IT and leather sectors are also going to play an important role in the country’s economy in the near future, they noted.
In this context, ADB called for giving increased attention to these sectors.
Meanwhile, it emphasised higher involvement in various regional arrangements, like – the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the South Asia Sub-regional Economic Cooperation (SASEC).
At the same time, the ADB officials at the event also called for overcoming infrastructural weakness and reforming economic policies.
They also focused on increased investment in education and training for maintaining necessary stability in the job market.
