Bangladesh economy will grow at the rate of 6.9 percent this year, which will remain unchanged in the following year as well, according to a latest report of the Asian Development Bank (ADB)."In Bangladesh, South Asia's garment industry leader, exports are a key element driving growth that is forecast at 6.9 percent in 2017 and 2018," said the Asian Develop-ment Outlook (ADO).
The flagship report of the ADB also termed the projected growth 'more impressive given sluggish growth in developed economies in Europe and elsewhere which Bangladesh relies upon as markets for its exports and as a source of remittances'.
In the report the ADB is highly optimistic about the prevailing political situation expecting that the 'political calm will continue and thus will support consumer and investor confidence'.
At the same time, it expects that the central bank would be generally mindful about keeping inflation in check while allowing ample private credit growth to support economic activity, reports BSS. It, however, pointed out that the GDP growth would be faster should there be higher demand in the euro area and the United Kingdom does not depreciate its currency against the dollar.
The ADB is also very positive on the macro-economic sectors saying that increases in wages and continued access to credit will help to sustain private consumption while private investment will rise only slightly, but public investment is expected to strengthen through fiscal expansion.
The report projects that the agriculture would grow at 2.4 percent in the current fiscal and 2.3 percent in next financial year mainly because of limits on area expansion and productivity improvement. It said industry growth is expected to be 10.6 percent this year in tandem with domestic demand, which would rise to 10.7 percent in the coming fiscal.
The ADO projects that the inflation may pick up in the end of the current financial year to average 6.1 percent and 6.3 percent in 2018 as global fuel prices continue to rise and a new value-added tax comes into effect at the start of the year.
The report said that export growth would be strengthened in the second half of this year and the upward trend would continue in 2018 when the growth for this sector would edge up to 7.0 percent on steady external demand and improvement in the market share.
In the report, the ADB said overseas employment of Bangladesh workers rose by 23.5 percent in the first six months of the current fiscal, but the remittance inflows declined as economic tightening continued in Gulf Cooperation Council economies and newly constrained inflows from the US and the United Kingdom.
The ADO cautioned that falling remittances and a larger trade deficit are expected to push current account into a deficit equal to 1.0 percent of GDP when taka would likely depreciate marginally in nominal terms.
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