Asian The Development Bank (ADB) has lowered its forecast for Bangladesh's economic growth to 5.1 percent. The main reason for this is the supply constraints due to political unrest in the country in July-August. According to the newspaper 'The Daily Star', the Asian Development Bank had earlier estimated that the overall production of goods and services in the South Asian country would grow by 6.6 percent for the financial year 2024-25. The Manila-based multilateral lender said that it has reduced the country's gross domestic product (GDP) growth forecast for the current financial year due to violent protests and recent floods.
Consumption will decrease further
ADB said fiscal and monetary policies are expected to remain tight, further dampening consumption and investment demand. The forecast is highly uncertain as there are significant downside risks to the macroeconomic outlook. “These risks arise primarily from political instability, weak law and order situation, and financial sector vulnerabilities,” it said. ADB's latest forecast is lower than the World Bank's June forecast, which projected Bangladesh's economic growth at 5.7 per cent for FY2024-25.
Inflation is troubling
ADB found that demand is suppressed due to high inflation, complex global monetary conditions and other macroeconomic challenges. It said, “Inflation remains high due to high commodity and energy prices and currency devaluation. The current account deficit has narrowed due to a decline in both exports and imports.” The organization has also estimated inflation to rise to double digits. Nobel laureate Mohammad Yunus was sworn in as the head of the interim government on August 8 after Prime Minister Sheikh Hasina was forced to resign and leave the country after widespread student protests turned violent. Yunus (84) has recently announced the formation of six commissions to reform the judiciary, election system, administration, police, anti-corruption commission and constitution.
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