The International Monetary Fund (IMF) has predicted that Bangladesh's gross domestic product will grow by only 5.4 percent in the current fiscal year 2023-2024. If these fears come true, the growth in Covid-19 pandemic will be the lowest in four years after a sharp decline in the 2019-2020 financial year.
Although the target of 7.5 percent growth has been set in the budget of the current financial year, the government organization Bangladesh Bureau of Statistics (BBS) has said that after reviewing the trend of the first six months, the growth will be 5.82 percent for the whole year.
IMF estimates that growth will be 0.42 percentage points lower than the provisional estimate of the Bureau of Statistics at the end of the year.
The agency said this in a release prepared to approve the third tranche of pre-promised loan assistance of 1,148 million US dollars for Bangladesh.
In addition to increasing GDP growth, the IMF said that the average price inflation will stand at 9.4 percent in the current fiscal year, noting that the target of controlling the prices of daily commodities is not being met. At the beginning of the financial year, the target was to bring down the inflation rate to 6 percent, but due to the increase in the price of daily commodities throughout the year, the target was increased to 8 percent in the revised budget.
The IMF estimates that actual inflation will be 1.4 percentage points higher than the revised target announced in the budget speech for the next fiscal year in early June.
According to the Bureau of Statistics report released till May, the average price inflation has been 9.73 percent in the last 12 months. According to this, the inflation of the whole year will be higher than the estimate of the IMF.
The global lender also believes that the target announced in the national budget to bring down the inflation rate to 6.5 percent in the next financial year and raise the GDP growth to 6.75 percent will not be met.
According to the report, the growth may increase slightly to 6.6 percent in the next financial year. And the annual average inflation may come down slightly to 7.2 percent.
The agency expects GDP growth to be 0.15 percentage points lower and average inflation 0.7 percentage points higher than the government's target.
Last April, the IMF had forecast growth of around six percent for the current fiscal year. GDP growth fell to 4.8 percent in the first half of the fiscal year, the agency said, noting growth and inflation targets were not met. Inflation rose to a decade high of 9.7 percent in April.
Real GDP growth will stand at 5.4 percent this year due to ongoing import contraction and policy tightening. And if import recovery and foreign exchange pressure eases a bit, it will rise to 6.6 percent in the next financial year
Average inflation has risen to 9.4 percent in the current financial year, but inflation may come down to 7.2 percent if global prices of food and other commodities fall, along with continued tightening policies.