Bangladesh’s gross domestic product (GDP) is projected to be 3.6 per cent in the current fiscal, the World Bank has forecasted in its flagship publication ‘Global Economic Prospects.
“In Bangladesh, the recovery is expected to be gradual, with growth of 3.6 per cent in fiscal year 2020-21, starting July, and 5.1 per cent in fiscal year 2021-22 as private consumption, the main engine of growth, is supported by normalising activity, moderate inflation, and rising ready-made garment exports,” the report says.
The latest WB projection on Bangladesh’s GDP is higher than the earlier one of 3.4 per cent.
The WB report says that recoveries in Bangladesh face new headwinds from a recent rise in Covid-19 cases accompanied by long restrictions to contain the new virus surge.
“Mobility around places of work and retail has again dropped below pre-pandemic levels,” states the report.
The report also points out the poor performance of vaccine administration in Bangladesh with only a small fraction of people having been inoculated.
The World Bank’s forecast for Bangladesh’s GDP growth is less than those projected by Asian Development Bank and International Monetary Fund.
ADB and IMF projected 6.8 per cent and 5 per cent growth for Bangladesh in the current fiscal year.
ADB and IMF’s growth projection for fiscal year 2021-22 is 7.2 per cent and 7.5 per cent.
The WB report also says that domestic financial sector stress remains a significant downside risk in the South Asia region. Nonperforming loans as a share of total loans were already elevated prior to the pandemic across Bangladesh, Bhutan and India, contributing to a precipitous slowdown in credit growth.