DHAKA: The World Bank said on Wednesday Bangladesh's economy was poised to grow at 6.2 percent in the fiscal year that ends June 2011, below the government's target of 7 percent, but the rate may be higher in the coming year.
The 6.2 percent growth for the current year will be "driven mainly by export growth and domestic demand," the World Bank said in its latest report.
It said Bangladesh's growth outlook for the fiscal year to end June 2012 was good, provided some short-term risks are contained. These include rising global food and fuel prices, deteriorating remittances, increased reserve drawdown, a
growing quasi-fiscal deficit and stock market volatility.
There are no major supply-demand imbalances in overall food grain stocks and the recent increases in food prices have been driven mainly by the upward trend in international prices, the World Bank said. It noted this needs to be carefully managed as it is the poor who are most affected by high and volatile food prices.
The rise in food and fuel prices, together with a worsening trade balance and falling remittances, have weakened Bangladesh's external position.
Both exports and imports rose in the first part of the fiscal year of 2011 while remittances were affected, mainly because of a significant decrease in the net outflow of migrant workers over the past year and a half.
The economy may grow at about 6.4 percent in the fiscal year that ends June 2012, assuming that short-term risks are prudently managed, the bank forecast.
"Alleviating power shortages, raising public investment and removing bottlenecks for private investment are critical to ensure long-term sustainable growth," said Lalita Moorty, World Bank senior country economist for Bangladesh.
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