Bangladesh's economic growth remains resilient in spite of volatile export growth and a decline in remittances, according to a new World Bank report.
"The economy has done well along with declining poverty rates, but Bangladesh can do even better. To tap its vast growth potential, the country needs to improve infrastructure, reduce the relatively higher cost of doing business, as well as make strategic investments in increasing female labor force participation," said WB's lead economist Zahid Hussain while unveiling 'Bangladesh Development Update, May 2017' report at a press briefing at WB office here today.
World Bank Country Director for Bangladesh, Bhutan and Nepal Qimiao Fan and senior director Carlos Felipe Jaramillo were, among others, also present at the briefing.
Declining rates in poverty has persisted, Hussain said, adding that rebound in labor intensive exports, decline in food inflation, and rise in wages are likely to have contributed to continued gains in poverty reduction in FY16.
He said the growth outlook in the near to medium-term is robust and the economy is likely to grow between 6.4 percent to 6.8 percent in 2017 and 2018.
However, the country must not be too complacent as it would require to deal with domestic and external risks, he said, adding that risks on the domestic side include further deterioration in financial sector stability, slippages in addressing fiscal reforms, and political uncertainties in the run up to elections in 2019.
He said Bangladesh needs higher growth rate to accelerate its journey on the middle income path. The country will need an investment-led strategy coupled with improvements in the efficiency of public capital, he added.
Hussain said Bangladesh can add about 3 percentage points to baseline growth over the next decade by removing structural impediments to investment and innovation; improving the production, pricing and distribution of energy; ensuring corporate governance in the financial sector; increasing global integration and revenue mobilization.