Bangladesh is likely to achieve 6.9% GDP growth in 2016-17 financial year (FY17), according to the International Monetary Fund (IMF).
IMF forecast the GDP growth in a report of the World Economic Outlook (WEO) released on Tuesday ahead of the IMF and the World Bank annual Spring Meeting to be held from April 20 in Washington DC.
According to the WEO, the global economic activity is picking up with a long-awaited cyclical recovery in investment, manufacturing, and trade.
“World growth is expected to rise from 3.1% in 2016 to 3.5% in 2017 and 3.6% in 2018. Stronger activity, expectations of more robust global demand, reduced deflationary pressures, and optimistic financial markets are all upside developments,” the report said.
But structural impediments to a stronger recovery and a balance of risks that remains tilted to the downside, especially over the medium term, remain as important challenges.
The report stressed the need for credible strategies in advanced economies and emerging market and developing ones to tackle a number of common challenges in an integrated global economy.
The WEO said emerging market and developing economies have become increasingly important in the global economy in recent years.
“They now account for more than 75% of global growth in output and consumption, almost double the share of just two decades ago,” it added.
According to the report, the external environment has been important for this transformation and terms of trade, external demand, and, in particular, external financial conditions are increasingly influential determinants of medium-term growth in these economies as they become more integrated into the global economy.
The still-considerable income gaps in these economies vis-...-vis those in advanced economies suggest further room for catch-up, favoring their prospects of maintaining relatively strong potential growth over the medium term.
Yet, the findings show that steady, sustained catch-up growth is not automatic and exhibits episodes of accelerations and reversals over time, the report said.
According to the Dhaka Tribune, the World Bank recently projected a 6.8% GDP growth for Bangladesh in 2017, a slight fall from 7.1% last year.
“The economy of Bangladesh has weathered global uncertainties well aided by strengthening investment and a recovery of exports. Growth will be sustained at 6.8% in 2017, coming down slightly from 7.1% in 2016 and with a decelerating information rate and a budget deficit that has narrowed, said the World Bank.
The report identified infrastructural gaps and inadequate energy supply, combined with the high cost of doing business as the main obstacles to the realisation of Bangladesh’s growth potential.
The report also said regional GDP growth of South Asia is expected to rise from 6.7% in 2016 to 6.8% in 2017, and 7.1% in 2018.