Bangladesh GDP growth to slow down, inflation rise in the FY 2023: Asian Development Bank

The GDP growth rate of Bangladesh is projected to slow down from the estimated 7.2 percent in Fiscal Year (FY) 2022 to 6.6 percent in FY 2023. In FY 2022, Bangladesh registered a GDP growth rate of 7.2 percent which was higher than the figure of 6.9 percent for FY 2021. Asian Development Bank (ADB) in its Asian Development Outlook (ADO) 2022 update also projects that inflation will rise from the estimated 6.2 percent in FY 2022 to 6.7 percent in FY 2023. However, the Current Account Deficit (CAD) is projected to decline to 3.6 percent of the GDP in FY 2023 from the estimated level of 4.1 percent of the GDP in FY 2022 as imports slacken and remittances increase. The agriculture and industrial growth rate is also projected to decline in FY 2023.

The ADO 2022 Update states that private investment growth will be lower due to global uncertainty and energy shortages. With slower revenue growth and higher import costs, public investment growth will also be slower as a result of government austerity measures.

Presenting the findings of the ADO in Dhaka on Wednesday, ADB Country Director Edimon Ginting appreciated the government of Bangladesh for navigating the uncertainties of prolonged external factors like the Ukraine war quite well. He however stressed the need to accelerate reforms like domestic resource mobilization, deepening of the financial market, and enhancing competitiveness to promote jobs in the private sector. Pointing to the uncertainties in the international energy market, ADB Country Director urged the government to accelerate reforms to achieve the country’s climate change goals and expand the domestic renewable energy supply to reduce dependence on fossil fuels.

Responding to queries from the media, Edimon Ginting ruled out any crisis related to the foreign exchange situation in Bangladesh in the near future. He said that it has sufficient foreign exchange to pay for imports of close to 5 months and the growth scenario of the country does not warrant any fear of a foreign exchange crisis for Bangladesh.

ADB has already provided USD 2.5 billion in loans and USD 7.23 million in grants to Bangladesh to address the socio-economic impacts of the coronavirus disease (COVID-19) pandemic and support a rapid recovery. For the period 2023–2025, ADB has programmed about USD 9.5 billion for Bangladesh.