Bangladesh's economy is set to grow by 5.7% in the fiscal year 2024-25, according to the World Bank.
This forecast is lower than the government's target of 6.75%, announced just days earlier in the proposed budget for the upcoming fiscal year.
The World Bank's Global Economic Prospects report, released today (11 June), attributes this growth to increased private consumption, easing inflation, and significant investments in large projects.
"Shortages of inputs and imported goods are expected to ease gradually," the World Bank noted.
The report also highlighted the role of a more flexible exchange rate policy in boosting remittance inflows and reducing balance of payments pressures.
For the current fiscal year ending in June 2024, the World Bank forecasts a 5.6% growth, which is slightly below the Bangladesh Bureau of Statistics' provisional estimate of 5.82%.
The report indicates that industrial activity in Bangladesh has been disrupted by import restrictions, leading to material shortages.
"Government consumption and investment have supported activity, while elevated inflation has dampened real wage growth and the purchasing power of households," it said.
Furthermore, higher borrowing costs and high levels of non-performing loans in the banking sector have dampened investor confidence, reads the report.
On a global scale, the World Bank has raised its growth outlook to 2.6% for this year, citing strong consumer spending in the United States.
It, however, warned that global growth remains weak by historical standards.
