It predicts 1% growth for the next fiscal year
The World Bank (WB) has projected that the country’s gross domestic product (GDP) will grow 1.6% in the current fiscal year as the coronavirus fallout weighs on the anticipated economic expansion.
Besides, the country is likely to witness a mere 1% growth in GDP in the next 2020-21 fiscal year as the virus-related economic disruption will not end anytime soon.
The global lender made the projections in its latest report, titled "Global Economic Prospects 2020", released on Monday.
"In Bangladesh, growth is expected to slow to 1.6%, as the recovery in industrial production is reversed by Covid-19-related disruptions, such as mitigation measures and global exports plunge, and as remittances fall," says the report.
Bangladesh's economy is vulnerable to supply chain disruptions, both domestic and those stemming from imports of intermediate goods, as well as travel-related disruptions to international contractors, it adds.
In Bangladesh, large sections of the workforce left major cities to return to their villages due to the pandemic, the report notes.
“This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges,” says Ceyla Pazarbasioglu, World Bank Group Vice President for Equitable Growth, Finance and Institutions.
“Our first order of business is to address the global health and economic emergency. Beyond that, the global community must unite to find ways to rebuild as robust a recovery as possible to prevent more people from falling into poverty and unemployment.”
South Asian Country’s GDP Forecasts in 2020
Source: World Bank
According to the report, growth is estimated to have slowed to 4.2% for India in the current fiscal year ending in March 2020, while it has been 1.8% for Nepal and -2.6% for Pakistan.
Growth in South Asia is projected to contract by 2.7% in 2020 and is marked by high uncertainty.
Across the region, pandemic mitigation measures will severely hinder consumption and services activity, while high uncertainty about the pandemic will constrain private investment.
Alongside the human toll, there is a risk that the pandemic will trigger a long-lasting rise in poverty, especially among the low-income countries of the region, the World Bank says in its report.
The report predicts that the Covid-19 pandemic is expected to result in a 5.2% contraction in global GDP in 2020 -- the deepest global recession in eight decades, despite unprecedented policy support.
“The Covid-19 recession is singular in many respects and is likely to be the deepest one in advanced economies since the Second World War and the first output contraction in emerging and developing economies in at least the past six decades,” according to Ayhan Kose, World Bank Prospects Group Director.
“The current episode has already seen by far the fastest and steepest downgrades in global growth forecasts on record. If the past is any guide, there may be further growth downgrades in store, implying that policymakers may need to be ready to employ additional measures to support activity.”
The pandemic highlights the urgent need for health and economic policy action, including global cooperation, to cushion its consequences, protect vulnerable populations, and strengthen countries’ capacities to prevent and deal with similar events in the future, says the WB.