ADB raises growth forecast for Bangladesh’s economy to 6% for FY23

The Asian Development Bank today raised growth projection for Bangladesh's economy to 6 percent for the Fiscal Year (FY) 2022-23, as net exports performed better than expected.

The latest forecast by the Manila-based multilateral lender is close to the estimate by the Bangladesh Bureau of Statistics (BBS) at 6.03 percent for the FY23.

The ADB in April forecasted 5.3 percent growth for Bangladesh's economy for the fiscal year.

For the current FY24, the ADB has kept forecast for growth of Bangladesh's economy is unchanged at 6.5 percent.

"The higher estimate of 6 percent for FY23 ended on June 30 reflects strong net exports as imports fell more sharply than expected and export growth slowed less than expected," said the ADB in its Asian Development Outlook (ADO) for July 2023.

The ADB maintains its growth outlook for developing economies in Asia and the Pacific at 4.8 percent this year, as robust domestic demand continues to support the region's recovery.

Inflation is expected to continue falling, approaching pre-pandemic levels as fuel and food prices decline, it said, forecasting inflation in developing Asia 3.6 per cent this year, down from its April forecast of 4.2 per cent.

The ADB however revised up inflation projections for Bangladesh and Nepal.

Regarding performance of Bangladesh's economy, the ADB said manufacturing firms of all sizes leveraged supportive government policies to contribute to growth.

"Crop losses to floods, cyclones, and droughts were partly offset by subsidies, incentives, and other measures. The service sector was buoyed by higher warehouse and support activities and health and social services," it added.

On the demand side, growth in public consumption outpaced expectations, as did public investment.