Bangladesh Economic Outlook
According to a projection released by the statistical office on 16 May, GDP will grow 6.0% in FY 2023 (July 2022–June 2023). This would roughly be in line with expectations and one of the best performances in Asia but slower compared to last year. The economy has been knocked by higher inflation at home and weaker demand for garments abroad, with growth in private spending, fixed investment and exports having likely slowed. More positively, public spending growth has likely accelerated. In other news, after a searing heatwave in late April, a cyclone battered the country’s south coast in May. Both the heatwave and the cyclone caused power shortages, knocking economic activity and signaling the downside risk posed to the economy by climate change.
Inflation inched down to 9.2% in April (March: 9.3%) as food prices rose less. Inflation should be lower in CY 2023 than in CY 2022 on a tougher base effect. The removal of subsidies and controls on the exchange rate will be a key factor to watch ahead, as the government angles to receive further tranches of IMF financing.