The American Chamber of Commerce in Bangladesh (AmCham) discussed the macro-economic situation at its monthly luncheon meeting held on Sunday at the Westin Hotel, Dhaka.
Edimon Ginting, Country Director, Bangladesh - Asian Development Bank (ADB), attended the event as the guest of honor and speaker. He spoke on “Bangladesh Macro-Economic outlook in the evolving global Phenomenon”, said a press release.
AmCham President Syed Ershad Ahmed, Vice President Syed Mohammad Kamal, and Political and Economic Counselor of the US Embassy Dhaka Scott Brandon were also present.
Edimon Ginting said amid economic slowdown in 2019 on lower global demand, the onset of COVID-19 pandemic further strained the global growth in 2020 due to supply disruptions. With reopening of economic activities, however, global growth strongly recovered in 2021.
Following more than two years of pandemic, spillovers from the Russian invasion of Ukraine are expected to significantly push down global economic activity, slowing to 2.9% in 2022 owing to further supply disruptions from high commodity prices.
Global growth projection for 2023 was lowered to 1.7% in January 2023 and to recover moderately to 2.7% due to inflation, increasing food insecurity, tighter financial conditions, and heightened policy uncertainty, he said.
He said following global economic scenario, growth for FY2023 in emerging market economy like Bangladesh this fiscal year is also expected to be significantly lower than its earlier projections by IMF, WB and ADB, as negative spillovers from the invasion of Ukraine more than offset any short-term boost to the exporters from power and energy shortages and higher transportation costs.
“With continued external adversities, only moderate rebound is expected in FY2024; as high commodity prices and continued monetary tightening persist.”
“Most commodity prices have peaked in mid-2022 due to post-pandemic demand surge and Russian invasion of Ukraine before being eased in June 2022 due to slowing global growth. Although inflation is likely to gradually moderate over the course of the year, there are signs that underlying inflation pressures could be becoming more persistent.” The country director said the private sector has led in driving GDP growth. A growing middle class consumer group and supportive government policy would create a conducive environment for the private sector to flourish.
“Private sector can take the lead in boosting innovation and productivity and leveraging the growing digital landscape with well-structured initiatives,” he said.
“Significant opportunities exist for Bangladesh’s private sector to expand to new sectors and upgrade existing ones. Private sector also needs to increase its role in infrastructure financing to meet the huge unmet need for infrastructure,” he said.
“Climate financing is another area, where the private sector can take a lead role and introduce technological solutions.”