Bangladesh's economic growth is to decelerate by 0.3 percentage points to 6.2 per cent in the current fiscal as the economy slows and uncertainties over the January election prevail, says the ADB.
The revised growth forecast from the Asian Development Bank came Tuesday in its flagship report Asian Development Outlook for December 2023.
In the last projection in September, the Manila-based lender had forecast that Bangladesh's gross domestic product (GDP) would grow at 6.5 per cent.
The growth has been revised down due to moderate growth in exports and manufacturing amid an economic slowdown in major export markets, power and energy shortages, and continued high inflation, the development financier says in the report, published Tuesday.
"Upside risks to the forecast include receding uncertainties over next January's elections," the Asian bank says.
Meanwhile, the International Monetary Fund (IMF) in October this year also pared down growth forecast for Bangladesh's economy to 6.0 per cent for the current fiscal year (FY) 2023-24. Its previous projection was 6.5 per cent.
Another Washington-based lender, the World Bank, also lowered Bangladesh's economic growth, to 5.6 per cent, amid sustained high inflation and external- payment challenges.
However, the government has taken a revised target of 6.5-percent GDP growth from its earlier target of 7.5 per cent in the current FY2024, in view of internal and external headwinds.
In the last FY, Bangladesh's economy had grown at 6.03 per cent.
About South Asian outlook, the ADB development outlook says the growth forecast for South Asia is revised up to 5.7 per cent in 2023 mainly on higher-than-expected growth in India for the July-September quarter.
Growth forecasts for the subregion for 2024 are maintained at 6.0 per cent, despite downward revisions in the forecasts for Bangladesh and the Maldives.
The 2024 growth projections for the subregion's other economies are unchanged.
Meanwhile, the inflation forecast for South Asia, including Bangladesh, has been revised up to 6.7 per cent for FY2024.
This revision reflects higher inflation forecasts for Bangladesh and Nepal, the ADB report says.
It says: "Despite several efforts to reduce inflation, the monthly rate in Bangladesh was close to double digits in July-October due to rising food inflation. Inflation is expected to ease in the coming months on continued contractionary monetary policy, measures taken to secure a market-based exchange rate, lower global commodity prices, and a better crop outlook."
Meanwhile, the ADB has projected developing Asia's growth upbeat this year despite persistent headwinds.
Healthy domestic demand, strong remittances, and recovering tourism are underpinning economic activity, which continued to expand even as inflation moderated, the ADB notes in the Development Outlook.
These drivers offset the drag from slower global growth and the lagged effects of monetary-policy tightening, and they are expected to continue fostering growth in the region next year. Various factors weigh on the outlook, however, including higher-for-longer global interest rates, property-market weakness in the People's Republic of China (PRC), and softer demand from advanced economies, the report says.
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