Bangladesh Bank (BB) made a note of caution, stating that a number of external factors have clouded the strong recovery of the country’s economic activities in the current fiscal year (FY23).
The central bank’s Annual Report: 2021-22, released on Monday afternoon, also stressed cautious and prudent monetary and fiscal measures in FY23.
"The strong recovery in economic activities is expected to prevail during the coming years," said the central bank’s latest annual report.
"However, this growth and inflation outlook is clouded by some uncertainties like pass-through effects of higher global commodity and energy prices into domestic wage and production costs, and potential loss of export demand in Europe caused by the Russia-Ukraine war driven economic slowdown and exchange rate volatility from growing current account deficits," it added.
Bangladesh Bank, however, mentioned that for the overall macroeconomic stability, the country ‘needs adopting cautious and prudent monetary and fiscal measures in the near term.’
The central bank report also emphasised the importance of aligning domestic monetary and fiscal policies with global best practices, as this may "bring some favourable outcomes against external shocks."