Staff Reporter :
The Asian Development Bank (ADB) on Wednesday revised its economic growth forecast for Bangladesh down to 5.1 per cent for the fiscal year 2024-25, a significant drop from the earlier estimate of 6.6 per cent.
This reduction primarily stems from supply disruptions linked to political unrest that gripped the country during July and August 2024.
Correspondingly, the forecast considers the impact of recent floods, which have compounded the challenges facing the economy.
“Additionally, fiscal and monetary policies are expected to remain tight, further dampening consumption and investment demand. The forecast is highly uncertain as significant downside risks cloud the macroeconomic outlook,” the ADB said.
The ADB observed that demand remained suppressed by elevated inflation, tight global monetary conditions, and other macroeconomic challenges.
“Inflation has remained high due to elevated commodity and energy prices and currency depreciation. The current account deficit narrowed as both exports and imports declined,” the ADB said.
The organisation further predicted that inflation could rise to double digits.
“Restoring and maintaining macroeconomic stability will depend on accelerated reforms to increase revenue for a better fiscal balance, stabilise the financial sector through improved interest and exchange rate policies, and diversify the economy,” the ADB added.
Amid persistent inflation, continued pressure on external accounts, import contraction, and sluggish private investment, Bangladesh recorded below 6 percent growth in the past two fiscal years: 5.78 percent in FY2023 and 5.82 percent in FY2024.
The ADB identified these risks as being primarily driven by ongoing political instability, a fragile law-and-order situation, and vulnerabilities within the country’s financial sector.
Nobel laureate Muhammad Yunus took oath as the head of the interim government on August 8 after widespread student protests forced Prime Minister Sheikh Hasina to resign and flee to India.
The Chief Advisor recently announced the formation of six commissions to reform the judiciary, election system, administration, police, anti-corruption commission and the constitution.