The World Bank projects that Bangladesh’s GDP growth will decline to 4.1% in the 2024-25 fiscal year, reflecting significant economic challenges. This forecast was detailed in the World Bank’s latest Global Economic Prospects report, published on Friday.
The report attributes the slowdown to various internal and global factors, including high inflation, a slump in foreign trade, rising import costs, and increasing debt servicing burdens. The post-COVID-19 recovery and the Russia-Ukraine war have further complicated the country’s economic environment.
Bangladesh’s export-driven ready-made garments (RMG) sector, a cornerstone of foreign trade, is struggling as demand from European and North American buyers weakens. Domestically, inflation has eroded purchasing power, while the devaluation of the Bangladeshi Taka has significantly increased import expenses.
Revenue shortfalls have also hindered budget implementation, resulting in reduced public investment in infrastructure and social safety programs. A weakening rural economy has exacerbated hardships for impoverished communities.
To tackle these challenges, the World Bank recommends reforms in revenue collection, diversification of export products, effective execution of social safety programs, increased infrastructure investment, and job creation initiatives.
Indermit Gill, the World Bank’s Senior Vice President, described Bangladesh’s economic situation as critical and stressed the need for policymakers to act decisively and swiftly to revive growth. While the government has taken steps to curb inflation and enhance revenue collection, urgent measures are essential to address immediate economic pressures effectively.
