Bangladesh’s GDP growth to fall to 5.7% in FY25: MEI

Bangladesh gross domestic product (GDP) growth will decrease to 5.7 percent in 2024-25 fiscal year, as the economy has been facing challenges due to weak domestic and external demand, according to the Mastercard Economic Institute (MEI).

Persistently high inflation is weighing on the consumers’ purchasing power, it said.

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The institute thinks the inflation would increase to 9.8 percent in 2023-24 fiscal year before easing to 8 percent in 2024-25 fiscal.

Moreover, higher US dollar rates could add to external sector vulnerabilities, it said.

The introduction of the crawling peg exchange rate regime in May along with greater alignment between official and unofficial exchange rates are acting as tailwinds for increased remittances, according to MEI.

Bangladeshi consumers have doubled their share of wallet spending on essentials compared to the pre-pandemic levels, driven by the rising prices of essentials at the cost of discretionary spending.

Consumer spends in groceries and electronics see the highest stickiness to digital channels in the post-pandemic period.

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