The under-construction Padma Bridge on the mighty Padma River Syed Zakir Hossain/Dhaka Tribune

Government had set 7.2% growth in national budget, while 8th 5YP targets 7.7%

Bangladesh’s gross domestic product (GDP) is set to grow 3.6% in the fiscal year 2021-22 instead of 1.6%, the World Bank said on Wednesday.

The global lender also said that the country’s economic growth will be 5.1%, higher than their earlier forecast of 3.4%, as mentioned in “Global Economic Prospects,” their flagship publication.

It also said that private consumption is the main engine of growth which is supported by normalizing activity, moderate inflation, and rising apparel exports.

While there is uncertainty regarding the stability of private consumption, Bangladesh’s growth is expected to experience a gradual recovery, the publication further mentioned.

Also Read – OP-ED: Our GDP has come a long way since its war-ravaged days

Contrary to the World Bank’s projection, the Asian Development Bank (ADB) and the International Monetary Fund (IMF) had higher growth projection rates for Bangladesh for FY22, 7.2% and 7.5% respectively.

In the national budget for FY22, government’s GDP growth target is 7.2%. The 8th five-year plan also targeted 7.7% GDP growth in FY22.

World Bank President David Malpass said: “How national governments, the private sector, and international institutions respond to the challenges of poverty, inequality, and climate change as we emerge from a crisis that has affected us all will be defining choices of our age.”

South Asian scenario

South Asian economies are bouncing back as economic growth is set to increase by 6.8% this year, after contracting an estimated 5.4% in 2020.

But the recovery remains fragile, as amid this Covid-19 pandemic, the region is expected to see tens of millions more extreme poor — those living below $1.90 a day — by the end of this year and to have more than half of the new global poor created byCovid-19. 

The report emphasized the uncertainty of the economic recovery stating, “All regions remain vulnerable to renewed outbreaks of Covid-19, which could feature variant strains of the virus; financial stress amplified by elevated debt levels; deeper-than-expected scarring from the pandemic; and rising social unrest, potentially triggered by rising food price”

India – the largest economy in South Asia, is expected to grow 7.5% in FY22 (April to March), a decline from the revised growth projection of 8.3% in FY21 after contracting by 7.3% in FY20.

Also Read – Budget FY22: Bangladesh attains highest GDP growth in Asia

“India’s recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic,” the report stated.

The Maldives’s real GDP is projected to grow by 11.5% in FY22, after projected to expand by 17.1% in 2021.

Sri Lanka and Pakistan’s economy is expected to grow by 2% in FY22 from the previous year’s growth projection of 3.4% and 1.3% respectively.

Nepal’s GDP is forecasted to grow by 3.9% in FY22.

In Afghanistan, 2.6% growth is expected in 2022 (December to December) compared to previous year’s growth projection of 1%.

However, Bhutan’s GDP will rise by 5% in FY22 (July-June) after a projected contraction in FY21.

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