The Asian Development Bank (ADB) Monday lowered its forecast of Gross Domestic Product (GDP) growth for Bangladesh to 6.5 percent from earlier projection of 7 percent for fiscal 2008 (July 2007-June 2008) due to the devastating flood this year.
The revision was given in its Asian Development Outlook 2007 Update (ADO 2007 Update) released across the Asian countries on Monday.
Launching the Update in the capital Dhaka on Monday, ADB country director Hua Du said because of recent flood, GDP growth has been lowered slightly from the projection of ADO 2007 released in March this year.
However, the Update said the agriculture is expected to show growth of 2.8 percent despite the floods.
The conditions for the expansion of industry remain favorable because of a likely continued uptrend in export-oriented manufacturing and new capacity in textiles, garments, light engineering and power. Services seem set to climb in line with the steady expansion in industry, said the report.
The regional bank also raised the inflation projection for the current fiscal to 7.0 percent from 6.0 percent in ADO 2007 because of heightened pressures in the second half of the fiscal 2007 ending in July.
The central bank has set an objective of limiting inflation to a range of 6.5-7.0 percent in current fiscal, but maintaining a cautious monetary policy stance will be a challenge since the flooding has occurred at a time of high monetary expansion and rising inflation, the report said.
Senior economist Karim Khan of ADB said on the occasion that curbing inflation remains the major challenge for Bangladesh. Other challenges includes improving business confidence, raising revenue and upgrading infrastructure.
In close to ADB's earlier prediction, the country's GDP growth remained robust at 6.5 percent in fiscal 2007, propelled by rising domestic and external demand.
Source: Xinhua
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