The International Monetary Fund (IMF) on Tuesday reduced Bangladesh's economic growth forecast for FY24 from 6.5% to 6%, a week after revising the forecast for its GDP growth projection, owing to high inflation and external payment worries.
In April this year, the IMF had projected a 6.5% economic growth for FY24.
The global lender said that Bangladesh's economy grew 6% in the immediate fiscal year, according to its World Economic Outlook published today.
However, it also revised its projections for Bangladesh's growth to 6% for FY23 from its previous forecast of 5.5%.
The report also included the point of uncertainty ahead of the election as a major risk to the economy, along with stabilization of the external sector dependent on removing distortions in exchange rates and lifting exchange rates.
Failure to address these risks may put the economy under more pressure than the projection, it has stated in the Bangladesh Development Update of the World Bank, titled "New Frontiers in Poverty Reduction".
Despite the government's efforts to provide essential food items to low-income groups at subsidized rates, inflation is anticipated to disproportionately affect the poor, the report added.
The World Bank projected 6.2% GDP growth for Bangladesh's FY24 fiscal in April.
The multilateral lender keeps the 2023 global growth forecast for 2023 unchanged, despite significant underlying differences between regions, while lifting its inflation outlook for the next couple of years, as per an AFP report.
Emerging markets and developing economies are projected to have a modest decline in growth from 4.1% in 2022 to 4.0% in both 2023 and 2024.
Global inflation is forecast to decline steadily, from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024, due to tighter monetary policy aided by lower international commodity prices.