Bangladesh's growth is further reduced to 5.2% by the World Bank

The World Bank has predicted that the GDP growth of Bangladesh may decrease to 5.2 percent in the current fiscal year 2022-23.

According to the company, rising inflation will have a negative impact on the income of the Khanas. Which will affect the entire economy. However, the company believes that the growth may increase slightly to 6.2 percent in the next financial year. 

This prediction has been made in the Global Economic Prospectus published by the World Bank last Tuesday. Earlier in October 2022, the World Bank said that Bangladesh's growth in the fiscal year 2022-23 could be 6.1 percent. Earlier in June, the company had pegged the growth at 6.7 percent. However, the GDP growth target of the Bangladesh government so far in the current financial year is 7.5 percent.

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In the Global Economic Prospectus, it is said about Bangladesh that the ongoing world situation has affected the economy of Bangladesh. Especially the government is suffering due to the increase in the price of fuel oil in the world market. Due to excessive load shedding in the energy crisis, power supply to industries and households has been disrupted. Apart from this, contraction of import expenditure, tightening of monetary policy has also affected the production of goods.

In this year's forecast, the report says that the prices of various products including energy will increase in Bangladesh as well. In this, the inflation target set by Bangladesh Bank may be exceeded. The value of the Bangladeshi rupee has fallen by 18 percent since last June. At the same time, foreign exchange reserves decreased by 8 billion dollars. Overall inflation reached 8.7 percent last December. Thus the continuous decrease in foreign exchange reserves, deficit in the current account is pushing many other countries like Bangladesh to seek loans from the IMF. The loan money will be used to survive for the time being.

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Meanwhile, on Tuesday, the president of the World Bank, David Malpas, in a statement again predicted a decrease in the overall growth of the world economy in 2023. According to him, global growth could be 1.7 percent in 2023; Which is the lowest since 1993 outside of the recessions of 2009 and 2020. However, the organization has forecast global growth to increase by 2.7 percent in 2024. However, the average growth between 2022 and 2024 will be below 2 percent.

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The statement further said that a sudden increase in interest rates to control inflation expected due to fragile economic conditions, economic recovery from the Covid pandemic or rising geopolitical tensions could adversely affect the global economy. This will create a difficult situation for emerging market and developing economies. Because they are struggling with debt burden, weak currency and rising per capita income.