The Asian Development Bank (ADB) has lowered Bangladesh’s economic growth to 5.1 percent in the current fiscal year due to trade disruptions due to political unrest in July and August.

In April this year, ADB said in a forecast that the total production of goods and services in Bangladesh will be 6.6 percent in the fiscal year 2024-25.

ADB says business has been hit hard by the political instability and deteriorating law and order situation in July and August. Apart from this, floods in different parts of the country, high inflation and global financial instability are having a negative impact on the macro economy. For these reasons, the economic growth forecast has been lowered.

ADB’s latest forecast is lower than the World Bank’s forecast last June. Bangladesh’s economic growth was predicted to be 5.7 percent in the fiscal year 2024-25.

Demand has been dampened by high inflation, tight global financial conditions and other macroeconomic challenges, ADB observed. The agency believes that inflation is high due to rising commodity and fuel prices and falling currency prices. Current account deficit has decreased due to decrease in imports and exports

ADB expects food prices to rise further due to rising commodity and energy prices and devaluation of the currency. As a result, inflation may reach double digits, the agency has warned.

According to ADB’s observations, the country’s economy needs rapid reforms. Apart from tightening fiscal and monetary policy, the agency feels it is important to stabilize interest and exchange rates. Apart from this, it is also important to take effective steps to diversify the economy.