Bangladesh's economic growth is further eaten up by external trade imbalances and unexpectedly high inflation, says the Asian Development Bank, lowering the rate below an earlier-forecast 6.6 per cent.
In its Asian Development Outlook Supplement (ADOS), released Wednesday, the ADB also cut the growth projections for other South Asian neighbours and the developing Asia, too.
The ADB's flagship report ADO Update in September last had projected Bangladesh's gross domestic product (GDP) growth down at 6.6 per cent from the previous outlook of 7.2 per cent for the current fiscal year (FY) 2022-23. And now the development-financier cuts the GDP forecast further-without quantifying.
"In Bangladesh, recovery is hampered by external imbalances and unexpectedly high inflation," the ADOS reads.
The ADOS states: "In Bangladesh, the GDP growth projection for FY2023 is adjusted down on account of dampened export and a widening trade deficit, continued high inflation and shortages of electric power and other energy, subdued remittances, and austerity measures adopted by the government to narrow a large financing gap."
It says the economic growth could be fallen into further risk on the downside from the declining global growth, particularly in Europe and the US.
In South Asia forecast the ADOS says the economic growth in the South Asian nations will grow at the same 6.5-percent rate for 2022.
However, it has been revised down marginally for the next year 2023 from 6.5 per cent to 6.3 per cent following an economic slowdown in Bangladesh and flooding in Pakistan.
The ADB outlook has also revised down the Asian growth from 4.3 per cent to 4.2 per cent in the current year 2022 and from 4.9 per cent to 4.6 per cent in 2023.
"Three main headwinds--recurrent lockdowns in China, the Russian invasion of Ukraine, and slowing global growth--continue to hamper recovery in developing Asia," it says to substantiate the Bank's downward revision of economic forecasts.
The subregional revision for 2023 largely reflects higher inflation forecasts for Bangladesh, Nepal, Pakistan, and Sri Lanka.
"The FY2023 forecast for inflation in Bangladesh is sharply raised to account for several factors: a worsening outlook for agriculture following losses from flashfloods and Cyclone Sitrang; the effects of currency depreciation on prices for imported products; rising global prices of food, fuel, fertilizer, and other commodities; administered oil and natural gas price hikes; and expected increases in retail electricity prices."
Meanwhile, the ADB outlook on growth for the South Asian big neighbour India remains unchanged in the ADOS as it says the country will grow at 7.2-percent rate.
