Bangladesh economy gained momentum from the beginning of new fiscal year and appears to have laid solid foundation to meet the target, says Citibank, N.A. Bangladesh in its annual market update 2015 released yesterday.
For FY 2015-16, the World Bank and Asian Development Bank forecast the country’s growth at 6.7% and the government set the GDP growth target at 7%.
Citi said the year of 2015 marked promising feats for Bangladesh with the achievement of Millennium Development Goals and escalation from a status from a low-income country to the lower-middle income country as per the World Bank’s classification, it noted.
It said with the country achieving growth in excess of 6% over the last five years, focus has now shifted towards moving to the next level and stepping up the growth rate to 8% by 2020 as envisaged under the country’s 7th five-year plan.
Evaluating last year’s economic performance, Citi said the beginning of 2015 brought tough challenges for the Bangladesh economy from the political front as adverse impact of political unrest took its toll on the economy during the first quarter of 2015.
On inflation, it said the annual average inflation decreased to 6.20% at the end of 2015, the lowest level since February 2013, from 6.99% in December 2014.
“The point-to-point inflation hovered between 6% and 6.4% throughout the year before closing at 6.10% in December. Inflation remained in the proximity of government inflation target of 6.20% set for FY’16.”
About exports, Citi said exports gained momentum after a slow start to FY’16 rising by 7.8% during July-Dec 2015 to US$16.1bn and exceeding the target of US$15.86bn for the period.
The growth was primarily driven by RMG sector export growth of 9.2% during the same period, it added. “At the current pace, the country is well on its way of hitting the export target of US$33.5bn set for FY’16.”
On import, it said import remained sluggish during the July-September period, which picked up again in October with rising payments for the government mega infrastructure projects, and rising capital machinery imports amid growing confidence.