Achieving 7.5% GDP growth in FY24 may become challenging: BB
The Bangladesh Bank's new monetary policy foresees challenges in achieving a 7.5% GDP growth target.
In its latest Monetary Policy Statement (MPS) for the first half of FY2023-24, Bangladesh Bank has acknowledged that reaching the GDP growth target of 7.5% may pose challenges due to high inflation in developed economies and global uncertainties.
"Achieving the (GDP) growth target of 7.5% in FY24 may become challenging," reads the MPS.
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The MPS states, "Despite the moderation of commodity prices following the war in Eastern Europe and improvements in supply chain functioning, the high inflation in major economies and global uncertainty with slower growth prospects are expected to challenge the economic recovery of Bangladesh in the first half of FY24."
However, the central bank remains optimistic, highlighting the resilient demand, robust export performance of the ready-made garments (RMG) sector, and favourable external developments expected to support Bangladesh's higher growth.
For FY23, Bangladesh's GDP growth is estimated to be 6.03%, a decline from 7.1% in FY22 and 6.94% in FY21.
The central bank also explains why commodity prices in Bangladesh have not followed the global trends of decline. It attributes this disparity to domestic price rigidity, insufficient market conditions, and a significant depreciation of the domestic currency, which offset the potential benefits of lower global prices.
According to the new monetary policy, Bangladesh experienced a point-to-point inflation rise of 9.94% in May, with an average inflation rate of 8.84%.
