The World Bank yesterday upgraded Bangladesh's GDP growth forecast for this fiscal year by 2 percentage points to 3.6 percent, making it the second best-performing economy in South Asia behind the Maldives.
In fiscal 2020-21, neighbouring India's economy is forecasted to contract by 7.3 percent, while Pakistan will register a GDP growth of 1.3 percent, according to the latest version of the Washington-based multilateral lender's flagship publication 'Global Economic Prospects', which was released on Tuesday.
The improved WB's GDP growth forecast for this fiscal year is still lower than the government's target of 6.1 percent, which is closer to the Asian Development Bank's forecast of 5.5-6 percent.
Recoveries in Bangladesh and Pakistan face new headwinds from a recent rise in COVID-19 cases accompanied by rising restrictions to stamp out the new surge, it said, adding that mobility around places of work and retail has again dropped below pre-pandemic levels.
Subsequently, the Bangladesh economy is forecasted to grow at 5.1 percent in the next fiscal year that begins in July -- up by 1.7 percentage points from its forecast earlier in January but once again lower than the government's target of 7.2 percent.
"In Bangladesh, the recovery is expected to be gradual."
Private consumption, the main engine of growth, will lead the recovery and will be supported by normalising activity, moderate inflation and rising garment exports, it said.
In fiscal 2022-23, Bangladesh's GDP is forecasted to grow at 6.2 percent, behind India and the Maldives in South Asia.
Per capita income losses will not be unwound by 2022 for about two-thirds of emerging market and developing economies. Among low-income economies, where vaccination has lagged, the effects of the pandemic have reversed poverty reduction gains and aggravated insecurity and other long-standing challenges.
"While there are welcome signs of global recovery, the pandemic continues to inflict poverty and inequality on people in developing countries around the world," said David Malpass, the WB Group president.