IMF downgrades Bangladesh GDP growth to 3.76pc

Bangladesh's economic growth this fiscal year is to decelerate further to 3.76 per cent from a cut-down previous estimation of 3.8 per cent made last December, says the IMF in a subdued global outlook.

And this pared-down projection is significantly lower from a previous projection of 4.5 per cent mad by the multilateral lender in October last year, as worldwide tariff turmoil weighs, among other factors.

The rate of inflation in the country will remain elevated at 9.98 per cent in the FY25 and then may cool down to 5.18 per cent in FY26, the multilateral lender forecasts.

The new statistics are revealed in the World Economic Outlook 2025 which the IMF released Tuesday in Washington during the Spring Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF).

The WEO estimates that in FY26 Bangladesh's gross domestic product (GDP) growth will pick up to 6.53 per cent before descending to 5.78 per cent in FY27.

In the IMF-framed latest World Economic Outlook Update, global growth as a whole is projected to drop to 2.8 per cent in 2025 and 3.0 per cent in 2026-down from 3.30 per cent for both years in the January 2025 WEO Update, corresponding to a cumulative downgrade of 0.8-percentage points, and much below the historical (2000-19) average of 3.7 per cent.

"The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity," the IMF explains to justify its latest projections.

In the reference forecast, growth in advanced economies is projected to be 1.4 per cent in 2025.

However, growth in the United States is expected to slow to 1.8 per cent, a pace that is 0.9-percentage-point lower relative to the projection in January 2025, on account of greater policy uncertainty, trade tensions, and softer demand momentum.

And the growth in the euro area at 0.8 per cent is expected to further shed 0.2-percentage points.

In emerging market and developing economies, growth is expected to slow down to 3.7 per cent in 2025 and 3.9 per cent in 2026, with significant downgrades for countries affected most by recent tumultuous trade measures, such as China.

"Global headline inflation is expected to decline at a pace that is slightly slower than what was expected in January, reaching 4.3 per cent in 2025 and 3.6 per cent in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging market and developing economies in 2025," the IMF notes.

syful-islam@outlook.com