WB projects 6.4pc growth for current fiscal

World Bank has estimated that Bangladesh economy will grow by 6.40 per cent in the current fiscal year (FY18).

The multilateral lending agency came up with the growth projection in its Global Economic Prospects released on Wednesday.

It also projected that annual growth rate of Bangladesh economy would increase to 6.70 per cent in the next fiscal year.

The bank, however, made it clear that it counted the period of July 2017 to June 2018 as the calendar year 2017.

“(Economic) activity in Bangladesh will grow at an average of 6.7 per cent a year over FY2018-2020, benefiting from strong domestic demand and strengthening exports,” read the report.

“Low interest rates and improved infrastructure are expected to lift investment (in Bangladesh),” it added. “Remittances are expected to rebound as the growth firms in Gulf Cooperation Council (GCC) countries and support private consumption.”

According to the WB, the main risks to the outlook for Bangladesh are fiscal slippages and setbacks to reforms to resolve corporate and financial sector balance sheet deterioration.

It observed that slippages relating to upcoming elections and weak tax revenues could derail fiscal consolidation efforts.

Corporate debt overhangs and high levels of nonperforming loans have been long-standing concerns for Bangladesh and India in the South Asian region.

The WB also mentioned that a protracted slowdown in remittance inflows would weigh on domestic consumption in Bangladesh and Sri Lanka.