Strong domestic demand and favorable trends in fuel and food prices have led the Asian Development Bank (ADB) to maintain its growth prediction for Bangladesh’s GDP at 6.5% for the current fiscal 2023-24.
This was revealed in the Asian Development Bank’s study titled “Asian Development Outlook July 2023,” which was published on Wednesday.
The ADB’s prognosis for Bangladesh’s GDP is in line with the IMF’s estimate of 6.5% and is higher than the World Bank’s projection of 6.2%. However, the government’s goal of 7.5% growth was not met. The ADB study notes the unexpected fall in imports and a less severe downturn in export growth as reasons for revising up Bangladesh’s GDP growth from 5.3% to 6% for the previous fiscal year. According to the report, “in Bangladesh, imports fell sharply than expected, and export growth slowed less than expected,” the manufacturing sector played a critical role in propelling development, with enterprises benefitting from favorable government policies. According to the research, manufacturing enterprises of all sizes were able to benefit from government initiatives that encouraged expansion.
Subsidies, incentives, and other measures helped mitigate agricultural losses from natural disasters including floods, cyclones, and droughts, as reported by the ADB. Warehouse and support operations, as well as health and social services, rose, boosting the country’s service industry.
The study goes on to say that public consumption and investment growth both exceeded projections.
Given stable conditions, the analysis predicts that South Asia’s economy would expand by 5.5% in 2023 and 6.1% the following year.
The [Asian Development Outlook] targets for South Asia may be expected to be met. Growth projections for 2023 were revised down for Nepal and Pakistan but up for Bangladesh due to stronger-than-anticipated net exports.
“Growth projections elsewhere in South Asia are largely maintained,” the study said.
South Asia’s inflation projection for 2024 was significantly raised from the previous year’s 8.1% to the current year’s 6.4%.
“Asia and the Pacific continue to recover from the pandemic at a steady pace,” said Albert Park, chief economist of the Asian Development Bank. In addition to a solid rebound in tourism, domestic demand and service activity are propelling expansion in many economies.
Despite this, “the outlook for global growth and demand next year has worsened,” as both manufacturing and exports show little sign of picking up.
The slowdown in exports from emerging Asia has persisted.
Exports and industrial activity in emerging Asia continue to stagnate, according to the July Outlook 2023 report, as global demand decreases. Key technology exporters saw a significant drop in exports year-to-date, while exports from the rest of the area were also restrained by lower demand.
Despite a little downward revision to 4.7% for 2024, the ADB research predicts that consumption and investment will continue to drive aggregate regional growth to 4.8% in 2023 as originally predicted.