Bangladesh to post highest GDP growth in Asia this fiscal year

The Asian Development Bank, it seems, is rather certain that Bangladesh's economic recovery from the coronavirus-induced downturn would be V-shaped.

While its fellow multilateral lenders remained circumspect of Bangladesh's growth prospects in the near term, the Manila-based lender looked at the bright side.

In its Asian Development Outlook Supplement (ADOS), which was unveiled yesterday, it said that the country would grow at 7.5 per cent next fiscal year that begins on July 1, helped by strong manufacturing.

Earlier this month, the World Bank projected that the economy would grow at just 1 per cent in fiscal 2020-21 and the International Monetary Fund 5.7 per cent.

The government though is holding out for an 8.2 per cent growth next fiscal year.

This fiscal year, the Bangladesh economy would grow at 4.5 per cent, the highest in Asia, according to the ADB, again closely trailing the government's projection of 5.2 per cent.

As per the IMF's projection, growth would be 3.8 per cent, and as per the WB's projection, just 1.6 per cent.

Bangladesh's economy recorded the highest GDP growth in Asia in fiscal 2018-19 of 8.2 per cent. Despite the downward projections, the country is expected to retain the position in fiscal 2019-20 among 46 economies.

In fiscal 2020-21, Bangladesh's GDP growth would be the second-highest in the continent, lagging behind only the Maldives, which would grow by 13.7 per cent if the pandemic peters out.  

As many as 33 economies in Asia would post negative growth in fiscal 2019-20.

Bangladesh had strong growth before the pandemic, but coronavirus has hit export earnings and remittances are likely to have fallen sharply in March and April, the ADOS said.

The government has revised the GDP growth rate for the current fiscal year downward to 5.2 per cent, up from 8.2 per cent initially projected.

"However, in view of the post-COVID recovery, the growth rate is projected at 8.2 per cent for fiscal 2020-21 in line with the long-term plans," Finance Minister AHM Mustafa Kamal said in his budget speech on June 11.

India, the largest economy in South Asia, would contract 4 per cent in fiscal 2019-20 before rebounding to 5 per cent in fiscal 2020-21.

In Bhutan, GDP growth is projected at 2.4 per cent in fiscal 2019-20 before falling to 1.7 per cent in fiscal 2020-2021, the ADOS said. In Nepal, growth in fiscal 2020-21 is projected at 3.1 per cent.

Pakistan's economy is projected to contract by 0.4 per cent in fiscal 2019-20 and would grow by 2 per cent in fiscal 2020-21.

Afghanistan is expected to contract by 4.5 per cent in 2020. Maldives's economy is expected to contract by 11.3 per cent in 2020. Sri Lanka's forecast for 2020 is downgraded to contraction by 6.1 per cent.

"If the pandemic dissipates in 2021, these three economies are set to rebound to growth by 3 per cent in Afghanistan, 13.7 per cent in the Maldives, and 4.1 per cent in Sri Lanka," the ADOS said.