File photo.
Economic Reporter //

The World Bank has forecast that Bangladesh’s gross domestic product (GDP) growth will decline to 4.1 percent in the current fiscal year 2024-25. The country’s economy will face a significant crisis this fiscal year.

The forecast was made in the World Bank’s ‘Global Economic Prospects’ report on Friday (January 17).

It said that various domestic and global factors, including high inflation, a slowdown in foreign trade, rising import costs and pressure on debt service costs, are responsible for this crisis. The situation has become complicated in the context of the post-Covid-19 pandemic shock and the Russia-Ukraine war.

The World Bank says that the main driving force of Bangladesh’s foreign trade is the ready-made garment industry. But export earnings are declining due to a decrease in orders from buyers in Europe and North America. Inflation in the country has reduced purchasing power and the depreciation of the taka has increased import costs.

Meanwhile, budget implementation is becoming difficult due to the revenue deficit. Government investment in infrastructure development and social security has decreased. The poor are facing more difficulties due to the weak rural economy.

The World Bank has made several recommendations for the Bangladesh government to overcome the crisis. These include reforming the revenue system, diversifying export products, implementing social security programs, investing in infrastructure development and increasing employment.

World Bank Senior Vice President Indermeet Gill said that the Bangladesh economy is in a critical state. Policymakers should take effective decisions quickly so that the economy can regain its momentum. The Bangladesh government has already taken steps to control inflation and increase revenue. However, urgent steps are needed to deal with the crisis in the short term.

Express your opinion.