Bangladesh's GDP growth will overtake China, IMF report forecasts

Bangladesh's GDP growth rate in current fiscal year will overtake China, International Monetary Fund's latest report on the Asia-Pacific region forecast

Bangladesh's Gross Domestic Product (GDP) growth rate in the current fiscal year will overtake China, the International Monetary Fund's latest report on the Asia-Pacific region forecast, according to Daily Sun citing United News of Bangladesh.

According to the latest report from the IMF, Bangladesh will be in the second position, after Vietnam, in terms of GDP growth rate in the current fiscal year.

IMF's Regional Economic Outlook for Asia and Pacific May 2023 report also predicted that Bangladesh may surpass China in terms of growth in 2024.

In Bangladesh, the GDP growth rate will slow to 5.5 per cent in 2023 because of demand-management measures, which is still higher than China's projected growth rate of 5.2 per cent, reported Daily Sun.

However, the economy of China is much bigger than that of Bangladesh.

The IMF report suggests that the recently approved Extended Fund Facility for Bangladesh will help address economic challenges caused by Russia's war in Ukraine, and the Resilience and Sustainability Facility arrangement will expand fiscal space to finance climate investment priorities and build resilience against long-term climate risks.

The report highlights the importance of international cooperation, particularly in securing financial assistance for climate change adaptation in vulnerable emerging markets in the region, including Bangladesh and the Pacific Islands, Daily Sun reported.

Despite the rapid economic development in Bangladesh, IMF official raised concerns about some of the country's macroeconomic indicators.

The IMF team conducted a staff visit to Bangladesh's capital city Dhaka from April 25 to May 7, 2023, to discuss recent macroeconomic developments and the implementation of its program.

At the conclusion of the visit, Rahul Anand, Mission Chief for Bangladesh issued a statement saying Bangladesh remains one of the fastest-growing economies in the Asia-Pacific region against a challenging economic backdrop.

Persistent inflationary pressures, volatility in global financial conditions, and a slowdown in major advanced trading partners continue to weigh on its growth, foreign currency reserves, and its currency Taka, it said.

"Against a challenging economic backdrop, Bangladesh remains one of the fastest growing economies in the Asia-Pacific region. However, persistent inflationary pressures, elevated volatility of global financial conditions, and the slowdown in major advanced trading partners continue to weigh on growth, foreign currency reserves, and the Taka," Anand said in a statement.

According to reports, Bangladesh's foreign currency reserves have slipped to a six-year low recently.