In a recent press conference held in Dhaka on Tuesday, the World Bank (WB) revised its prediction for Bangladesh's GDP growth for fiscal year 2023-24, cutting it down to 5.6% from the previous 6.3%. The downward revision is attributed to inflation and external sector challenges, according to Abdoulaye Seck, World Bank's country director.
The announcement was made as part of the "Bangladesh Development Update" report presentation. The report highlighted the influence of domestic and international market prices, as well as a fuel price hike, on the inflationary trend causing the deceleration in GDP growth.
Despite this forecast, the Bangladesh government remains ambitious, targeting a 7.5% GDP growth rate for fiscal year 2023-24. However, uncertainty looms over these projections due to the national elections scheduled for January 2024.
The World Bank report also underscored a decrease in Bangladesh's Current Account Deficit (CAD) in fiscal year 2023, although it noted a widening Balance of Payments (BoP) deficit during the same period.
Looking ahead, the World Bank anticipates a slight rebound in GDP growth to 5.8% for fiscal year 2024-25 if inflation is effectively controlled and overseas trade stabilizes. Yet, persistent inflation may pose a challenge if domestic energy prices fail to align with global levels.
The World Bank's revised GDP growth prediction underscores the broader economic challenges Bangladesh faces amidst rising inflation and external sector hurdles. It remains to be seen how these factors will influence the country's economic trajectory in the coming months leading up to the national elections.
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