World Bank has revised its growth outlook for Bangladesh, forecasting an expansion of 4% for the current fiscal year 2024-25, a substantial reduction from its earlier projection of 5.7% made in April.
This significant downgrade is attributed to considerable uncertainties surrounding the political and economic landscape following recent political upheavals, according to the World Bank report titled, "South Asia Development Update (October 2024)," which was released on Thursday (10 October).
It indicates that output growth in Bangladesh is expected to decrease from 5.2% in FY2023/24 to a range of 3.2–5.2% (with a midpoint of 4.0%) in FY2024/25.
"You have an emerging class of consumers in India that’s driving the economy forward; you have recoveries from crises in Sri Lanka and in Pakistan; you also have a tourism-led recovery in Nepal and Bhutan," said World Bank Vice President for South Asia Martin Raiser.
The report elaborates that the wide range of growth projections reflects the scarcity of reliable data in recent months and the prevailing uncertainties regarding the political and economic outlook post-turmoil.
It notes, "In the short term, political uncertainties are expected to keep investment and industrial growth subdued. Recent floods are expected to set back agricultural production modestly."
Looking ahead, the report predicts that in the medium to long term, growth is expected to gradually improve, bolstered by essential reforms in the financial sector, enhanced domestic resource mobilisation, an improved business climate, and increased trade.
In contrast, the World Bank has increased its growth forecast for South Asia to 6.4% in 2024, up from a previous estimate of 6.0%, attributing this rise to robust domestic demand in India and faster recoveries in crisis-stricken nations such as Sri Lanka and Pakistan.
