The World Bank has downgraded the economic growth outlook of Bangladesh for the fiscal year 2024-25 to 4 percent, while the output is estimated to have grown by 5.2 percent in the fiscal year 2023-24.

The global financial institution came up with the forecast in the latest report – South Asia Development Update for October 2024 – on Thursday. Earlier in June, it predicted a 5.7 percent growth for the Bangladesh economy in the fiscal year 2024-25.

According to the latest World Bank report, the output growth in Bangladesh is expected to slow from 5.2 percent in the fiscal year 2023-24 to within the range of 3.2 to 5.2 percent (with a mid-point of 4.0 percent) in the fiscal year 2024-25.

Recent developments in Bangladesh caused significant economic disruptions, including a decline in industrial and service sector activities, export shipments, and remittance inflows

Regarding the overall situation in Bangladesh, the report noted that an interim government took office on 8 August 2024, following the resignation of the former prime minister amid the widespread student-led protests.

These events caused significant economic disruptions, including a decline in industrial and service sector activities, export shipments, and remittance inflows. Since then, the economy has stabilized and remittance inflows increased.

The wide range of the growth projection reflects the lack of available or reliable data in recent months and significant uncertainties around the political and economic outlook following the recent political turmoil. In the short term, political uncertainties are expected to keep investment and industrial growth subdued.

For South Asia, the report noted that the output growth is on track to exceed earlier expectations, at 6.4 percent in 2024 and 6.2 percent a year in 2025–26, in a broad-based upturn. It is expected to remain higher than in all other emerging market and developing economy regions.

Highlighting different barriers to developments in the region, he said opening up labor market opportunities to women, and global trade and investment opportunities to firms, would help unlock South Asia’s considerable untapped potential.