The World Bank has revised upwards Bangladesh's economic growth prospects for the current fiscal year to 7 percent thanks to a bustling economy.
The latest revision by the Washington-based lender is 30 basis points higher than its last projection -- which was made in June last year -- but lower than the government's expectation of a 7.8 percent growth.
Bangladesh's economy expanded by 7.9 percent last fiscal year thanks to strong private consumption and strong remittance inflows.
“In Bangladesh, robust economic activity is expected to be sustained,” said the WB's January 2019 Global Economic Prospects report, which was released on Tuesday.
Strong private consumption and investment on the back of infrastructure projects will fuel the growth momentum in fiscal 2018-19.
Net exports are projected to contribute negatively to GDP growth as imports outpace exports in response to strong domestic demand.
Global economic growth is projected to soften from a downwardly revised 3 percent in 2018 to 2.9 percent in 2019 amid rising downside risks to the outlook, said the WB report.
International trade and manufacturing activities have softened, trade tensions remain elevated, and some large emerging markets have experienced substantial financial market pressures.
Growth among advanced economies is forecast to drop to 2 percent this year.
Slowing external demand, rising borrowing costs and persistent policy uncertainties are expected to weigh on the outlook for emerging market and developing economies.
Growth for this group is anticipated to hold steady at a weaker-than-expected 4.2 percent this year.
“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead,” said World Bank Chief Executive Officer Kristalina Georgieva in a statement.
As economic and financial headwinds intensify for emerging and developing countries, the world's progress in reducing extreme poverty could be jeopardised. “To keep the momentum, countries need to invest in people, foster inclusive growth, and build resilient societies,” she added.
The upswing in commodity exporters has stagnated, while activity in commodity importers is decelerating.
The per capita growth will be insufficient to narrow the income gap with advanced economies in about 35 percent of emerging market and developing economies in 2019, with the share increasing to 60 percent in countries affected by fragility, conflict, and violence.
A number of developments could act as a further brake on activity.
A sharper tightening in borrowing costs could depress capital inflows and lead to slower growth in many emerging market and developing economies.
Past increases in public and private debt could heighten vulnerability to swings in financing conditions and market sentiment.
Intensifying trade tensions could result in weaker global growth and disrupt globally interconnected value chains.
“Robust economic growth is essential to reducing poverty and boosting shared prosperity,” said Ceyla Pazarbasioglu, vice-president for equitable growth, finance and institutions at the WB.
As the outlook for the global economy has darkened, strengthening contingency planning, facilitating trade, and improving access to finance will be crucial to navigate current uncertainties and invigorate growth, she added.