BD to grow 6.1pc: ADB

Bangladesh's economy may grow by 6.1 per cent in the current fiscal year 2014-15, the Asian Development Bank (ADB) says in a scaled-down projection.
The Manila-based international lending agency lowered its previous projection by three percentage points by citing blockade and violence as a major reason.  
"Political blockades and violence in early 2015 will constrain growth and turn the current account into a small deficit," it said in Asian Development Outlook (ADO), published on Tuesday across the region.
"Before political unrest began in January 2015, the anniversary of national elections that the opposition boycotted, the economy had been expanding briskly for six months, indicating good growth prospects for FY15," it added.
"However, political unrest and action to shut down transportation began undermining growth prospects by affecting private investment and export activity."
"Notwithstanding the country's resilience under domestic and external shocks, if political unrest continues, it would further hinder economic growth," it cautioned.
The development financier also expected that inflation would come down in the near future.
The ADB was of the view that the government might go for increasing prices of gas and electricity.  
"Although likely increases in administered prices for natural gas and electricity may exert inflationary pressure in the ensuing months, inflation is expected to soften over time," it said.
According to the ADB forecast, inflation will be softened with easing constraints on supply, large public stocks of food, normal weather, and a supportive monetary policy.
The Asian lending agency also pointed out that sustained low global oil prices would lower spending for imports and thus improve the trade- and current-account balances.
At the same time, the government will benefit from reduced expenditures on fuel subsidies, it mentioned. But, the government will not pass the benefit of lower oil price to consumers directly.
"Though the drop in oil prices has created opportunity to review policies regarding energy prices and subsidies, market-based price adjustments are unlikely in the coming months as the authorities are expected to first recoup earlier losses of the Bangladesh Petroleum Corporation," it said.
The ABD, however, projects 6.4 per cent growth for FY'16 on assumption of higher inflow of remittances and export growth, which is underpinned by the continued economic recovery in the US and the euro area.
According to ADO, the developing Asia will grow 6.3 per cent in both current and next fiscal years. India will grow by 7.8 per cent in the current year and likely to register 8.2 per cent growth next year, while growth wheel of China will continue to slow down with the rate slightly above 7 per cent.
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