ADB cuts BD’s GDP growth forecast to 6.8pc
Dhaka: The Asian Development Bank (ADB) has cut its forecast for Bangladesh's GDP growth in the current 2021-22 fiscal year to 6.8 per cent from its previous projection of 7.2 per cent. ADB said the second wave of Covid infections disrupted the economic recovery.
In the September update of the Asian Development Outlook (ADO) released on September 22, the ADB mentioned that more containment measures were needed to bring down high infection rates that went on in the first couple of months of the current fiscal year.
However, ADB stated that the growth projection reflects a strong recovery supported by strengthening manufacturing, continued expansion in the global economy, the strong inflow of remittances, firming up private consumption and effective government recovery policies.
The Bangladesh government set a 7.2 per cent economic growth target for the current fiscal year while the World Bank projected the growth rate at 5.1 per cent in its prospect released in June this year.
ADB's forecast is substantially higher than that of the World Bank and closer to the government's target.
Government policies for saving lives and 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, Manmohan Parkash, Country Director of ADB, said in a press release from the Dhaka office of the agency.
"Prudent macroeconomic management and efficient implementation of stimulus measures and social protection programmes have helped," he added.
Continued efforts for job creation, quick vaccination, and improving domestic resource mobilisation will further accelerate the recovery process, Parkash continued.
The bank has upgraded the average growth forecast for Developing Asia to 5.4 per cent in September, which was 5.3 per cent in the April outlook. The average growth projection for the South Asian countries also increased to 7.0 per cent from 6.6 per cent. The projected growth of Bangladesh is lower than the South Asian average but higher than Developing Asia.
The report also reveals that the economy of Bangladesh grew by 5.5 per cent in FY21 – lower than the 6.8 per cent forecast in ADO 2021 – due to restrictions put in place in early April 2021 to contain the second wave of Covid infections that slowed down economic activities.
"Given the expected continued expansion in the global economy and maintained government recovery policies, the FY22 growth is expected to strengthen but remain below pre-pandemic levels. Inflation will edge up and the current account deficit will narrow," revealed the ADB report.
