Bangladesh's gross domestic product (GDP) is expected to grow by 6.5 percent in fiscal year 2024 (from July 2023 to June 2024), according to the latest Asian Development Bank report.
The economy is expected to grow slightly faster in FY2024 with easing inflation and some improvement in export growth, said the Manila-based lender in the report Asian Development Outlook (ADO) 2023 Update released Wednesday.
"GDP growth projection in FY2024 is retained at 6.5 percent, higher than 6.0 percent in FY2023, due to continued export growth supported by economic recovery in the Euro area," the report said.
According to the ADO, inflation is projected to decline to 6.6 percent in FY2024.
Though high inflation may persist for some time, the report said that it is expected that it will come down with some fall in global nonfuel commodity prices, expected higher agricultural production, and the initial tightening of monetary policy under the new framework.
According to the ADO, exports continued to grow, and a marked fall in imports sharply reduced the current account deficit.
It said the current account deficit is expected to slightly narrow from 0.7 percent of GDP in FY2023 to 0.5 percent of GDP in FY2024 as remittance growth improves.
"The main risk to this growth projection is a further deterioration in export growth if global demand is weaker than expected," said the lender.
ADB Country Director Edimon Ginting said that the government is managing relatively well against external economic uncertainties, while advancing infrastructure development and critical reforms to improve the investment climate.
These key structural reforms include strengthening public financial management, enhancing domestic resource mobilisation, improving logistics, and deepening financial sector, which are critical for private sector development, export diversification and productive job creation in the medium term, he said.
He mentioned that continued high oil prices also provide a good incentive to accelerate reforms to expand domestic renewable energy supply and achieve the country's climate change goals.
The report said that moderate inflation and an increase in remittances will contribute to reviving private consumption, while the completion of a number of major government infrastructure projects will increase investment. Private investment, however, may be dampened by the initial higher interest rates following the enhancement in the country's monetary policy framework.
In its 50-year partnership with Bangladesh, the ADB said it has mobilized over 50 billion U.S. dollars in loans and grants, including cofinancing, to improve infrastructure, public services and social development for the people of Bangladesh. The ADB's current sovereign portfolio in Bangladesh has 53 projects worth about 13.0 billion U.S. dollars.