Bangladesh Becomes 2nd Fastest Growing Economy In South Asia | World Bank

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LOOKEAST REPORT |

BANGLADESH has become the second–fastest growing economy in South Asia after Bhutan. World Bank in its report ‘South Asia Economic Focus, Making (De) Centralisation Work’ — says that GDP growth rate of the country is projected to moderate to 7.2 per cent this fiscal year and 7.3 per cent in 2020 in Bangladesh.

■ A Bangladeshi farmer harvest rice in a field in Manikganj on the outskirts of Dhaka | AFP

The report points out that its economy is likely to maintain growth above 7 per cent, supported by a robust macroeconomic framework, political stability, and strong public investments. Bangladesh has reduced the current account deficit due to rising export and remittances which was above dollar 15.5 billion in 2018. However, the report says financial sector vulnerability, fiscal pressures and loss of external competitiveness pose challenges to its growth rate.

 

Robust macroeconomic framework, political stability, and strong public investments. Bangladesh has reduced the current account deficit due to rising export and remittances which was above dollar 15.5 billion in 2018

 

Indicating vulnerability in the financial sector, World Bank report says low deposit growth rate and rising bad loans along with low credibility of Letter of credit guarantees in the international market remain causes of worry for Bangladesh.

The report points out that despite slowdown in industrial growth rate, the industrial sector remains strong as the country’s garment industry benefited from the trade tensions between the United States and China.

The World Bank said Bangladesh need to address key structural challenges such as reducing the infrastructure deficit, enhancing human capital, improving urban management and managing climate change risks. ■

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