Business Desk :
Bangladesh’s GDP growth is forecast to slow down to 1.6 per cent in the fiscal year 2021 as the country struggles with the devastating impact of the lingering Covid-19 pandemic, the World Bank said in its twice-a-year-regional update on Thursday.
“The global economic downturn will impact Bangladesh’s economy. However, the policies that the government has undertaken to mitigate the impacts are in the right direction” said Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan.
“For a resilient recovery, the government needs to continue to safeguard its fiscal and debt positions, build financial sector health, protect the poor and vulnerable and create a conducive environment for private sector development and job creation.”
The latest South Asia Economic Focus report also warns of a hardest recession in South Asia, of which Bangladesh is a part.
South Asia is set to plunge into its worst-ever recession as the devastating impacts of COVID-19 on the region’s economies linger on, taking a disproportionate toll on informal workers and pushing millions of South Asians into extreme poverty, according to the World Bank report.
The report forecast a sharper than expected economic slump across the region, with regional growth expected to contract by 7.7 per cent in 2020, after topping 6 percent annually in the past five years.
India’s economy, the region’s largest, is expected to contract by 9.6 per cent in the fiscal year that started in March 2020. Regional growth is projected to rebound to 4.5 per cent in 2021.
Factoring in population growth, however, income-per-capita in the region will remain 6 per cent below 2019 estimates, indicating that the expected rebound will not offset the lasting economic damage caused by the pandemic.
In previous recessions, falling investment and exports led the downturn. This time is different as private consumption, traditionally the backbone of demand in South Asia and a core indicator of economic welfare, will decline by more than 10 per cent, further spiking poverty rates.
