The International Monetary Fund on Tuesday predicted that the Bangladesh economy would grow by 3.8 per cent, up from its April prediction of 2 per cent, for the current calendar year 2020, a sign of economic recovery from the early coronavirus fallout.
The IMF made the forecast in its latest report titled ‘World Economic Outlook October 2020: A Long and Difficult Ascent’ released on the day.
The global lending agency, however, projected that gross domestic product growth would stand at 4.4 per cent in 2021 and would increase to 7.3 per cent in 2025.
Earlier on Thursday, the World Bank predicted a GDP growth of 1.6 per cent for Bangladesh in the current fiscal year 2020-2021 after the Asian Development Bank in September projected a-6.8 per cent GDP growth for the year for the country.
The government has set the GDP growth target at 8.2 per cent for FY2021.
According to the provisional data of Bangladesh Bureau of Statistics, the country achieved a GDP growth of 5.24 per cent in the last FY2019‑20.
The IMF, however, did not provide any explanation over its projection.
According to the report, although remittance flow has shown signs of recovery, the risk of decline in payments and transfers from migrant workers is very significant for a country like Bangladesh.
The report also projected a slight increase in point-to-point inflation rate at 5.6 per cent in 2020 from 5.5 per cent in 2019.
The inflation rate may further increase to 5.9 per cent in 2021, it said.
Current account balance is likely to stand at negative 1.7 per cent of GDP in 2020 as opposed to negative 1.7 per cent in 2019, it added.
Policy Research Institute executive director Ahsan H Mansur said that the GDP growth would not be above 2 per cent in the calendar year 2020 although it might reach up to 3 per cent in the fiscal year 2021.
He said that the calendar year was coming to an end but none of the sectors would go back to their normal business activities despite the fact that the economy had opened up since July.
He said that the reason behind the upward GDP growth projection in the October WEO compared with that of April might be influenced by the country’s conservative reporting on coronavirus infections.
In the South Asian region, the GDP growth of India will contract by 10.3 per cent this year and revive by 8.8 per cent in 2021, the report said.
Pakistan’s economy will contract by 0.4 per cent in 2020 and will grow by 1 per cent in 2021.