The revision was due to moderate growth in exports and manufacturing amid an economic slowdown in major export markets, power and energy shortages, and continued high inflation
The Asian Development Bank (ADB) has revised down Bangladesh’s economic growth to 6.2% from 6.5%, while it said the projected rate of inflation for the country will ease a bit, an official of the ADB’s Dhaka office told The Business Standard.
The forecast for Bangladesh’s growth for FY2024 (ending 30 June 2024) was revised down due to moderate growth in exports and manufacturing amid an economic slowdown in major export markets, power and energy shortages, and continued high inflation, says the Asian Development Outlook December 2023 released on 13 December by the ADB.
Upside risks to the forecast include receding uncertainties over next January’s elections, it said.
South Asia’s other economies are mostly on track to meeting their projections for growths of around 6% made in the September outlook.
Meanwhile, the inflation forecast for 2024 has also been revised up marginally to 3.6% on upside shocks that are keeping price pressures higher than previously expected in Bangladesh, the report said.
“Despite several efforts to reduce inflation, the monthly rate in Bangladesh was close to double digits in July–October due to rising food inflation. Inflation is expected to ease in the coming months on continued contractionary monetary policy, measures taken to secure a market-based exchange rate, lower global commodity prices, and a better crop outlook,” the report said.
The revision over higher inflation was also seen for Nepal due to continued pressure on prices and the “assumption of higher international oil prices in 2024.”
The report pointed out that oil forecasts remain highly uncertain.
“Brent crude is currently trading below the 50-day moving average of $86.50/barrel, signaling short-term weakness. However given the tightness of the oil market, oil prices are highly sensitive to developments.
“Signs of escalation in the Middle East conflict and extended Organization of the Petroleum Exporting Countries Plus production cuts will push up oil prices, while signs of sustained global economic weakness and higher US interest rates will dampen oil prices,” the report said.
