Bangladesh’s GDP to grow only 1.6pc
Bangladesh's economic growth would weaken further to 1.6 percent in the current fiscal year, the World Bank said yesterday as it revised its prospects revealing a far deeper impact of the coronavirus pandemic than it had initially thought.
"Bangladesh's growth is expected to slow to 1.6 percent, as the recovery in industrial production is reversed by the Covid-19-related disruptions such as mitigation measures and global exports plunge, and as remittances fall," said the WB in its June 2020 Global Economic Prospects.
Earlier in April, the Washington-based global lender had forecast that the growth would be between two and three percent, in a stunning decline from the 8.15 percent logged in the last fiscal year.
The GDP growth would be 1 percent in the next fiscal year, again lower the 2.9 percent earlier projected.
The International Monetary Fund said Bangladesh's economy would grow by 3.8 percent in FY20 and the Centre for Policy Dialogue said on Sunday that the growth would be at best 2.5 percent.
Talking to The Daily Star yesterday, Finance Minister Mustafa Kamal, however, said that the growth would be between 5.2 to 5.5 per cent this fiscal year given that the economy only began to feel the impact of the coronavirus pandemic in April, the 10th month of the fiscal year.
Bangladesh's growth prospect would be higher than the South Asian average of a negative 2.7 percent, according to the WB projection.
India's growth would further fall to a negative 3.2 percent this fiscal year and rebound to 3.1 percent next fiscal year.
For Pakistan, the economy would contract by 2.6 percent this fiscal year and 0.2 percent next fiscal year.
Nepal would expand by 1.8 percent this year and 2.1 percent next fiscal year and Bhutan would grow by 1.5 percent this year and 1.8 percent next year.
Sri Lanka would see a contraction by 3.2 per cent in 2020. The Maldives would contract by 13 per cent and Afghanistan by 5.5 per cent.
Bangladesh's economy is also vulnerable to supply chain disruptions, both domestic and those stemming from imports of intermediate goods, as well as travel-related disruptions to international contractors in sectors like construction, the WB said in the report.
Spill-overs from major trading partners could be more severe than expected, the report said. Bangladesh's pharmaceuticals and textile sectors are reliant on countries abroad for intermediate inputs.
The WB said private consumption has been severely hindered as large-scale lockdowns were instituted in several economies, including Bangladesh, India, Nepal, and Pakistan.
The global economy will shrink by 5.2 percent this year.
"This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges," said World Bank Group Vice President for Equitable Growth, Finance and Institutions, Ceyla Pazarbasioglu.
"Our first order of business is to address the global health and economic emergency. Beyond that, the global community must unite to find ways to rebuild as robust a recovery as possible to prevent more people from falling into poverty and unemployment."
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