Bangladesh's gross domestic product is expected to grow by 4.5 per cent in fiscal year 2020 and 7.5 per cent in fiscal year 2021, according to an Asian Development Bank report.
The economy in Bangladesh is expected to recover in fiscal year 2021 after the coronavirus-induced slowdown in FY2020, bdnews24.com reported citing the Asian Development Outlook Supplement published on Thursday.
The growth forecast for FY2020 reflects a sharp decrease in economic activities in the last quarter due to Covid-19 global pandemic and its outbreak in Bangladesh.
During FY2021, the GDP growth rate is expected to pick up to 7.5 per cent driven by a gradual recovery in the first two quarters, followed by quick recovery in the following quarters. These forecasts rest on the assumption that it would take 3 months, from when the outbreak intensifies in the country, for economies to get their domestic outbreak under control and to start normalising economic activities.
They also consider the impacts of the government’s containment actions, and fiscal and monetary stimulus measures.
Inflation is expected to slightly edge up to average 5.6 per cent in FY2020 on higher food prices as well as non-food prices on account of higher domestic natural gas prices, the ADB report said.
In FY2021, it will ease to 5.5 per cent on better supply conditions. The inflation forecasts rest on the assumption that potential upward pressure in prices from the Covid-19 pandemic related stimulus measures are expected to be offset by fall in demand from the consumers.
“After a robust performance in the first nine months of FY 2020, Bangladesh economy would slow down in the near term due to Covid-19 pandemic but is likely to recover in FY2021,” said Country Director Manmohan Parkash in a statement.
“Global economic recovery, proactive initiatives to attract investments, creating local employment opportunities, and providing easier access to finance for farmers, entrepreneurs and small businesses could help jumpstart the economy,” he said appreciating the resilience of Bangladeshi people.
“ADB has so far provided $600 million in loans and $1.4 million in grants for managing health emergencies and mitigating the initial socio-economic impacts of the pandemic,” said the country director.
“In FY2021, ADB will continue its strong support to help Bangladesh economy to recover and rebound from the impacts of Covid-19,” he added.