ADB Increases Growth Forecast for Bangladesh's Economy to 6% in FY23
The Asian Development Bank (ADB) has raised its growth projection for Bangladesh's economy to 6% for the Fiscal Year (FY) 2022-23, citing better-than-expected performance in net exports.
This latest forecast from the Manila-based multilateral lender aligns closely with the estimate provided by the Bangladesh Bureau of Statistics (BBS), which projected growth at 6.03% for FY23.
In April, the ADB had initially forecasted a growth rate of 5.3 percent for Bangladesh's economy in the fiscal year.
For the ongoing FY24, the ADB has maintained its growth forecast for Bangladesh's economy at 6.5 percent.
According to the ADB's Asian Development Outlook (ADO) for July 2023, the upward revision to 6% for FY23 is attributed to strong net exports. Import figures contracted more sharply than anticipated, while export growth moderated at a slower pace.
The ADB's growth outlook for developing economies in Asia and the Pacific remains unchanged at 4.8 percent for this year, supported by robust domestic demand that continues to fuel the region's recovery.
The ADB anticipates a decline in inflation, with prices of fuel and food approaching pre-pandemic levels. It forecasts inflation of 3.6 percent for developing Asia in 2023, down from its previous estimate of 4.2 percent in April.
However, the ADB has revised its inflation projections upward for Bangladesh and Nepal.
The ADB noted that Bangladesh's manufacturing firms of all sizes leveraged government policies to contribute to growth. Measures such as subsidies and incentives partially offset crop losses caused by floods, cyclones, and droughts. The service sector was buoyed by increased activities in warehousing, support services, health, and social services.
On the demand side, public consumption and public investment exceeded expectations, further driving economic growth in Bangladesh.
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