BSS, Dhaka :
The International Monetary Fund (IMF) expects Bangladesh economy would perform better next year with steady domestic demand, sound foreign exchange reserve, rising export and low level of inflation.
The IMF made the forecast in its report on the Bangladesh fourth review under the three-year Extended Credit Facility (ECF) programme, released yesterday. The comment came from the watchdog of global economy at a time when the country is getting ready to have a new national budget in two days.
The soft lending arm of the World Bank (WB), however, said the overall economic growth would be 5.5 percent for the out going 2013-14 financial (FY14) year as political uncertainty disrupted economic activity and led to a decline in domestic demand in the first six months of FY14.
As economic activity normalized after the January election, the IMF believed that the domestic demand should recover in the second half of this fiscal year. Besides, it said the recent indicators suggested that the real GDP growth would be 6.25 percent in the coming 2014-15 financial year (FY15).
Commenting on major economic indicators, the IMF said export growth remained resilient through the period of political turmoil, but slowed down more recently. By contrast, import growth declined in the first half of FY14 on the back of slowing demand, but is now picking up.
Remittance growth also fell in the first half of FY14 as restrictions in major host countries have led to continued weakness in migrant worker outflows.
Overall, the FY14 current account surplus is forecast at 1.3 percent of GDP, below the FY13 ratio, but well above the previous review’s projections, with the improved trade balance more than offsetting weaker remittance inflows.
Gross reserves have continued to build up well above programme targets, while the nominal Taka/U.S. dollar exchange rate has remained stable.
With prices underpinned by the domestic demand recovery, average inflation is projected to inch up slightly to 7.5 percent in the end of FY14.
