DHAKA, July 20, 2017 (BSS)-Preliminary government economic growth estimates in Bangladesh for FY2017 (ended June 30, 2017) beat the forecasts of Asian Development Outlook (ADO) 2017, according to an Asian Development Bank (ADB) report.
In the ADO 2017, published in April this year, ADB said Bangladesh economy will grow to 6.9 percent in FY2017 but Bangladesh’s gross domestic product (GDP) growth reached 7.24 percent in FY2017, beating all the previous records.
In a supplement to its ADO 2017 report released today, ADB upgraded its growth outlook in the region from 5.7 percent to 5.9 percent in 2017 and from 5.7 percent to 5.8 percent for 2018. The smaller uptick in the 2018 rate reflects a cautious view on the sustainability of this export push.
Agriculture growth in Bangladesh in FY2017 was higher than anticipated. Services growth also outperformed expectations, supported by agriculture growth and solid performances in wholesale and retail trade, real estate, hotels and restaurants, and transport.
Inflation forecasts for South Asia are cut to 4.2 percent from 5.2 percent in 2017 and to 4.7 percent from 5.4 percent in 2018, prompted by lower increases in Bangladesh, Bhutan, India, and Nepal.
Bangladesh is experiencing a steady decline in nonfood inflation, reflecting favorable international prices, it said.
In Pakistan, growth was similarly supported by a revival in agriculture, as well as by continued expansion in construction and steady growth in services.
Strong private consumption remained the largest contributor to growth. Robust growth in industry and services lifted growth prospects for Nepal in FY2017 (ended 15 July 2017), as did accelerated earthquake reconstruction, while an improved prognosis for the important tourism sector is providing a boost to the Maldives.
These improved prospects for Bangladesh, Maldives, Nepal, and Pakistan are balanced by slower growth projected for Bhutan and Sri Lanka. The construction of hydropower projects has been delayed in Bhutan, undermining economic growth there.
In Sri Lanka, heavy rain caused severe floods in 15 of 25 districts and triggered landslides in some areas in May 2017. Disrupted economic activity and damage to agriculture will slow growth in 2017, but subsequent recovery may boost GDP growth somewhat in 2018.
In India, economic growth slowed to 7.1 percent in FY2016 (ended 31 March 2017) from 8.0 percent in FY2015. The slowdown can be partly attributed to the demonetization and replacement of high-denomination banknotes in November 2016, which affected economic activity in several cash-dependent sectors.