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Bangladesh Economic Growth to Rise 7% by 2017: World BankFriday, January 16, 2015 > 11:13:05
Bangladesh’s economy will expand steadily in the next three years, with the growth of the gross domestic product (GDP) rising to 7 per cent in 2017, according to the latest report of the World Bank here the other day.
The report, Global Economic Prospects 2015, released in Washington DC here the other day, projects that GDP growth in Bangladesh will be 6.2 per cent this year, and it will maintain steady a pace to escalate at 6.5 percent in 2016 and 7 per cent in 2017. The WB projects continual growth for the country when the global economy would also improve, but amidst the downside risks from divergent trends, reports BSS.
The Bank said the economic growth would be supported this year and afterwards by continued robust remittances and recovery in private consumption demand, but political stability would be vital to its sustainability.
On the major economic fronts, the Bank’s outlook was mixed as it noted slow export growth as demand in key export markets softened. In addition, textile manufacturing production was affected by disruptions due to social unrest and by stricter enforcement of regulations on working conditions following the collapse of Rana Plaza.
In the report, the Bank said that exports would improve after transition to better enforcement of factory safety standards and working conditions though wage pressures in the absence of productivity gains could erode its competitiveness.
On the other hand, the Bank observed that trade facilitation reforms in the region could significantly boost integration into global trade.
The Bank admitted that the activity in Bangladesh began to normalise in 2014 as social unrest abated from a spike in the run-up to national elections in January 2014. “With government spending offsetting softness in private demand, the economy is estimated to have grown by 6.1 per cent in financial year 2013-14, ostensibly because increased agriculture and service sector growth outweighed the decrease in industrial growth,” the WB report said.
Besides Bangladesh, developing countries would see an uptick in growth this year, boosted in part by soft oil prices, a stronger US economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets, says the Bank’s report.
In South Asia, the growth rose to an estimated 5.5 per cent in 2014 from a 10-year low of 4.9 per cent in 2013. But sustaining the pace of reform and maintaining political stability are keys to maintaining the recent growth momentum, the report said.
About the global economy, it said the global economic prospects will improve in 2015, but divergent trends pose downside risks.
“Following another disappointing year in 2014, developing countries should see an uptick in growth this year, boosted in part by soft oil prices, a stronger US economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets,” according to the report.
After growing by an estimated 2.6 percent in 2014, the global economy is projected to expand by 3 per cent this year, 3.3 per cent in 2016 and 3.2 per cent in 2017, while the developing countries grew by 4.4 per cent in 2014 and are expected to edge up to 4.8 per cent in 2015, strengthening to 5.3 and 5.4 per cent in 2016 and 2017, respectively, the World Bank said.
“In this uncertain economic environment, developing countries need to judiciously deploy their resources to support social programs with a laser-like focus on the poor and undertake structural reforms that invest in people,” said World Bank Group President Jim Yong Kim.
According to the report, underneath the fragile global recovery lie increasingly divergent trends with significant implications for global growth.