Bangladesh aims to get extended World Bank (WB) technical cooperation to bolster export diversification, competitiveness, investment, and trade logistics, facilitating a smooth transition from least developed country (LDC) status by 2026.

Media reports underlined this adding finance minister AH Mahmood Ali is set to discuss these initiatives during the spring meetings of the World Bank and IMF in Washington even if despite economic challenges such as inflation and currency depreciation, Bangladesh’s external debt remains manageable, as highlighted in the ministry’s briefs.

The government’s strategic vision includes sustaining GDP growth at 6.5 per cent with targeted inflation at 7.5 per cent for FY24. However, the World Bank projects a temporary slowdown in growth to 5.6 per cent due to elevated inflation, potentially pushing 500,000 people into extreme poverty.

Meanwhile, annual inflation is forecasted to hover around 9.6 per cent, easing to 8.5 per cent next fiscal year even as Bangladesh’s long-term plans emphasise job creation, human capital enhancement, and infrastructure development to attract private investment and enhance competitiveness, with aspirations of achieving upper-middle-income status by 2031.

This vision involves diversifying exports, promoting sustainable urbanisation, and strengthening public institutions.

The finance minister will also reportedly advocate for increased budget support during the joint meeting of development partners, citing the need to address pandemic-induced economic challenges and mitigate shocks from global events like the Russia-Ukraine war.

Despite constraints in accessing concessional assistance due to the country’s lower-middle-income status, Bangladesh has managed external debt prudently, maintaining a low risk of debt distress according to IMF-WB’s Debt Sustainability Analysis.

However, concerns linger over the recent surge in external borrowing and debt servicing obligations, prompting a cautious approach towards further borrowing. While Bangladesh’s external debt-to-GDP ratio remains favourable, experts emphasised the importance of prudent debt management to sustain economic stability and avoid default risks in the face of evolving global financial dynamics.

Fibre2Fashion News Desk (DR)

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