Macroeconomic indicators show signs of recovery

The key macroeconomic indicators -- such as inflation, exchange rate, and interest rate except the GDP growth are showing signs of recovery after hitting their lowest points in recent times, according to the latest report by CAL Bangladesh, a Sri Lanka-based financial institution and research organisation.

For the fiscal year 2024-2025, GDP growth is projected to range between 2.0 per cent and 3.0 per cent, a significant drop from the 4.22 per cent growth reported for the previous fiscal year by the Bangladesh Bureau of Statistics (BBS).

The report also notes that the economy grew by just 1.8 per cent in the first quarter of the current fiscal year-marking the lowest quarterly growth in the past 15 quarters.

These findings were shared during a seminar titled "Bangladesh Macroeconomic Outlook for the Year 2025," held at a hotel in Dhaka on Wednesday evening.

Raihan Shamsi, director of CAL Securities, and Ahmed Omar Siddique, vice-president of the host agency, presented a keynote paper at the event while Deshan Pushparajah, a director of the CAL Securities, spoke at the event.

The organisation has projected inflation to stabilise between 8.5 per cent and 9.5 per cent by June, which will fall further to 6 to 7 per cent by December this year.

The report forecasts GDP growth for FY25 between 2 per cent and 3 per cent due to a significant slowdown in investment, private sector credit and high interest rate. This decline is linked to persistent macroeconomic challenges, which have continued to weigh on the country's economic prospects.

A slowdown in consumption has further dampened growth, as rising inflation and economic uncertainty have strained household incomes. Lower investments have also compounded these issues, with high interest rates and uncertainty discouraging private sector activity.

CAL Bangladesh's outlook also forecasts the exchange rate to stabilise between Tk 125 and Tk 130 against the dollar. Interest rates are expected to be 9.8 per cent to 10.5 per cent by June 2025.

Deshan Pushparajah said the economy has passed its worst in terms of exchange rate, inflation and interest rate except for GDP growth.

Raihan Shamsi said the economy has been going through a rough patch for the last two years and a political changeover took place recently. He said bleeding in the economy has not stopped yet, but holes have been plugged.

The report has identified the delay in foreign funds, money printing, political uncertainty and energy shortage as major risk factors for the economy.

Delay in disbursement of IMF funds could put pressure on the Balance of Payments and create volatility, said Ahmed Omar Siddique. He also said that money printing is another concern and failure to reverse money printed to support banks could lead to another wave of inflation when credit picks up.

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