IMF cuts Bangladesh's GDP growth forecasts to 6.4%

Illustration: Collected

The International Monetary Fund has revised down its economic growth projection for Bangladesh to 6.4 percent for the current fiscal year largely because of Russia-Ukraine war and supply chain disruptions.

Yesterday, the IMF published its Global Economic Outlook from Washington DC.

In October last year, the IMF projected that Bangladesh's GDP growth would be 6.5 percent. Later in January this year, it slightly increased the projection to 6.6 percent based on the country's better economic recovery amid the pandemic.

The IMF also revised down the GDP growth projection for Bangladesh in the next fiscal year to 6.7 percent from 7.1 percent in January's supplementary outlook.

"Compared to our January forecast, we have revised our projection for global growth down to 3.6 percent in both 2022 and 2023," said the IMF in the latest report.

"This reflects the direct impact of the war on Ukraine and sanctions on Russia, with both countries projected to experience steep contractions."

This year's growth outlook for the European Union has been revised down by 1.1 percentage points due to the indirect effects of the war, making it the second largest contributor to the overall downward revision, it added.

The World Bank projected that Bangladesh's economy would grow at 6.4 percent in fiscal 2021-22 and 6.7 percent in fiscal 2022-23.

The Asian Development Bank forecast that Bangladesh's GDP would expand by 6.9 percent in FY22 and 7.1 percent in FY23.

This week, the government projected that the economy would grow by 7.2 this fiscal year and 7.5 percent in the next fiscal year.

In the latest outlook, the IMF cut the GDP growth forecasts for other South Asian counties as well.

It projected that India would grow by 8.2 percent in the current fiscal year and 6.9 percent in the next fiscal year.

In FY22, the Maldives would grow at 6.1 percent, Nepal at 4.1 percent, Pakistan at 4 percent and Sri Lanka at 2.6 percent.