Bangladesh’s inflation rate could reach 8.6% this year, but it is expected to decrease next year, with inflation projected to be around 6.5%.
The International Monetary Fund (IMF) has forecasted that Bangladesh’s Gross Domestic Product (GDP) growth will be 5.5% this year. Next year, this could increase by 1 percentage point, bringing GDP growth to 6.5% in 2024. If this trend continues, Bangladesh’s GDP growth could reach 7% by 2028.
This forecast was provided in the IMF’s World Economic Outlook 2023 report, which was released yesterday, Tuesday, during the World Bank and IMF’s week-long Spring Meetings in Washington, D.C.
The IMF typically provides forecasts based on the calendar year, while the World Bank and the Asian Development Bank (ADB) use the fiscal year for their forecasts. On 4th April, the World Bank’s updated development report on Bangladesh predicted that GDP growth for the 2022-23 fiscal year could be 5.2%. On the same day, the ADB forecasted growth at 5.3%. However, the government has set a GDP growth target of 7.5% for the current fiscal year.
According to the IMF, inflation in Bangladesh could reach 8.6% this year. Next year, it is expected to decrease to 6.5%. By 2028, inflation could fall further to 5.5%.
The IMF also suggests that the current account deficit could reduce slightly this year. Last year, the deficit was 4.1% of GDP, but it could drop to 2.1% this year. However, the deficit may rise again to 4.2% next year.
The IMF forecasts that imports could decrease by 10.75% this year but might increase by 13% next year. On the other hand, exports could decline by 2.12% this year, though they are expected to recover next year, with growth potentially remaining below 1%.
The IMF also predicts that government revenue will be 8.85% of GDP this year, potentially increasing to 9.31% next year.
Regarding the global economy, the IMF forecasts that high interest rates will slightly reduce global growth. The organization has warned that if global financial sector instability worsens, the world economy could edge closer to a recession.
Global economic growth in 2022 was 3.4%, but the IMF expects it to slow to 2.8% this year. Next year, it may rise slightly to 3%. However, if financial sector instability intensifies, growth could drop to 2.5% this year.
The IMF report mentioned that delays in taking timely measures led to the closure of two U.S. banks and the forced merger of Credit Suisse, contributing to some instability in the banking sector.
