UN projects robust growth for Bangladesh despite global slump

The United Nations has projected a continued momentum in Bangladesh's economic growth despite a downward projection for the global economy.

Bangladesh's economy is projected to see a 5.8% growth in 2022, up from 5.5% in 2021, and is expected to reach 6.4% in 2023, according to the UN's yearly report "World Economic Situation and Prospects".

The UN's positive forecast for Bangladesh's economy comes just two days after the World Bank projected an upward growth trend jumping from 5% in FY21 to 6.4% in the fiscal 2021-22. The global lender also projected the Bangladesh economy to reach as high as 6.9% in FY23.

The UN report published on Thursday lauded Bangladesh's "sound macroeconomic policies", saying the country has "navigated the Covid-19 pandemic well".

It added that the country's "economic activity rides on export growth and the rising demand for apparel, robust remittance inflows, and accommodative fiscal and monetary policies".

For neighbouring India, the UN report projected a 6.5% growth in 2022, and 5.9% in 2023. For Pakistan, it was 4.2% in 2022, and 3.8% in 2023.

According to the UN report, the global economy is projected to grow 4% in 2022, down from 5.5% last year, contracting to 3.5% in 2023 amid new waves of Covid-19 infections, labour market challenges, supply-chain constraints, and rising inflation.

Last year's global economic growth – following a contraction of 3.4% in 2020 – began to slow by the end of the year, including in big economies like China, the European Union and the United States, as the effects of fiscal and monetary stimuli faded and major supply-chain disruptions surfaced, the report added.

Along with the ongoing pandemic, "rising inflationary pressures in major developed economies and a number of large developing countries, present additional risks to recovery," according to the report by the UN Department of Economic and Social Affairs.

"Global headline inflation rose to an estimated 5.2% in 2021, more than 2% percentage points above its trend rate in the past 10 years," it said.

The report also warned that an emerging longer-term consequence of the coronavirus pandemic was higher levels of inequality within and between countries.

"For the vast majority of developing countries, a full recovery of GDP per capita will remain elusive. The gap between what they will achieve and what they would have achieved without the pandemic will persist well into 2023," the report projected.

"In contrast, GDP per capita in the developed economies is expected to almost fully recover by 2023 relative to pre-pandemic projections," it added.

The World Bank, in their report published on Tuesday, said, "In Bangladesh, strong export growth, supported by returning readymade garment demand from abroad, and a rebound in domestic demand – with improving labour income and remittance inflows – supported the recovery."

The World Bank's forecast for Bangladesh's economic growth is slightly lower than that of the International Monetary Fund's (IMF) latest outlook at 6.6% for the current fiscal year, and 7.1% for FY23.