The interim government is poised to lower the country’s gross domestic product (GDP) growth projection for the fiscal year 2024-25 to 5.25%, a significant reduction from the earlier target of 6.75%, said Finance Adviser Salehuddin Ahmed.
He deliberated the decision during a fiscal coordination council meeting at the secretariat on Monday (2 December).
This marks the first occasion under the interim government where key economic indicators such as GDP growth, inflation, and a revised fiscal budget were formally discussed.
According to officials present at the meeting, the government is also considering revising its inflation target for the fiscal year to 9%, up from the 6.5% outlined in the proposed budget.
Economic challenges for Bangladesh have been highlighted by recent projections from global financial institutions.
The International Monetary Fund (IMF), in its latest World Economic Outlook, slashed Bangladesh's GDP growth projection by 2.1%age points to 4.5%—the lowest since fiscal 2019-20, when the country registered 3.4% growth due to the global COVID-19 pandemic.
Earlier this year, in June, the IMF had forecasted Bangladesh’s GDP growth for fiscal 2024-25 to be 6.6%. However, its most recent outlook did not elaborate on the reasons for the drastic revision.
In August, the World Bank also downgraded its growth forecast for Bangladesh, reducing it by 1.7%age points to 4%, citing "significant uncertainties following recent political turmoil" and "data unavailability."
World Bank suggested that, depending on improvements in the economic and political situation, the GDP growth rate could range from as low as 3.2% to a best-case scenario of 5.2%.
Similarly, the Asian Development Bank (ADB) revised its growth forecast for the country to 5.1%, down from 6.6%, attributing the reduction to supply chain disruptions caused by political unrest in July and August.
The interim government’s revised projections come at a time of heightened economic challenges, with inflationary pressures and political instability undermining earlier growth expectations.
