Bangladesh will experience higher inflation in 2022 as the implementation of various measures to tackle Covid-19, including the disbursement of stimulus funds, has increased pressure on the recent fuel price hike, according to the Bank Asian Development (AfDB).
The government’s decision to increase the price of diesel and kerosene resulted in increased transportation costs, which directly or indirectly affected all sectors.
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However, the AfDB has kept its economic growth forecast for Bangladesh for fiscal year 2021-2022 unchanged in its latest supplement to Asia Development Outlook 2021.
The Manila-based development lender reduced its annual growth projection for Bangladesh to 6.8% thanks to an update in September, which reflects the
the impact of the virus containment measures reinstated at the start of the year.
In April, the AfDB forecasted growth of 7.2 percent in the country’s gross domestic product (GDP), up from a provisional estimate of 5.47 percent in the previous fiscal year, while the government set a target. similar.
And in its latest report, the AfDB said Bangladesh’s exports and imports grew more than expected thanks to an increase in global demand for clothing.
“The faster growth of imports has widened the trade deficit, but growth will be supported by private investment with imports of machinery, equipment and raw materials for clothing,” he added.
South Asia as a whole is expected to grow less than forecast in the AfDB’s update for 2021, reflecting a modest downward revision in India’s GDP growth rate, with the manufacturing sector now expected to grow more slowly than foreseen.
In contrast, other economies in the region have benefited from higher global demand and the rebound in domestic activity with Covid-19 largely contained throughout the sub-region.
The sub-region’s GDP growth forecast in 2021 has been lowered to 8.6%, from 8.8% in the update, while it is expected to remain at 7% in 2022.
Report says Covid-19 has receded in developing countries in Asia, but increasing infections around the world and the recent emergence of a fast-spreading variant suggest the pandemic will take longer to unfold .
Since the Asian Development Outlook 2021 update in September, coronavirus infections in the region have steadily declined.
As of November 30, the daily average number of new cases in developing countries in Asia had fallen to around 50,000, down 71% from August and 88% from the highest peak in May.
However, the number of cases worldwide is on the rise again, driven by a new wave of infections in Europe.
The recent emergence of the highly mutated variant of Omicron is a sobering reminder that further outbreaks remain a possibility, ADB said.
As it appears to be significantly more transmissible than previous variants, the economic impact could be substantial and developing Asia could be affected through various channels, he added.