Bangladesh’s finance minister said economic growth will accelerate next fiscal year, signaling he expects the garment-export industry to weather safety concerns sparked by a factory collapse that killed over 1,000 workers.
The economy will expand 7.2 percent in the 12 months through June 2014, Abul Maal Abdul Muhith, who is scheduled to present the budget on June 6, said in an interview on May 31. That compares with a provisional estimate of 6.03 percent for 2012-2013 from the Bangladesh Bureau of Statistics.
“The main challenge in the next budget is political instability,” Muhith said, referring to frequent protests and strikes ahead of a general election due in the $123 billion economy by early next year.
Europe and the U.S. have called for better safety after the April 24 collapse of the Rana Plaza factory, the worst industrial accident in Bangladesh’s history. The nation depends on export earnings from clothing sales to retailers such as Wal-Mart Stores Inc. to sustain growth and cut poverty.
About 77 percent of the population lives on less than $2 per day, according to the latest available data from the World Bank. A legacy of political volatility and corruption are among the obstacles to faster development in the South Asian country.