Bangladesh's Economic Recovery Faces Inflation, Job Challenges: World Bank Report

Bangladesh's post-COVID recovery grapples with high inflation, balance of payments issues, and limited job opportunities, according to the World Bank. GDP growth is forecasted to slow, with particular challenges for urban youth employment. Urgent reforms are needed to strengthen economic resilience and promote inclusive growth.

Bangladesh's economic recovery from the COVID-19 pandemic remains affected by persistent high inflation, a balance of payments deficit, and financial sector vulnerabilities, as detailed in the World Bank's latest report released on Tuesday. The country's GDP growth has notably slowed to 5.2% in FY24, primarily due to weak consumption and exports, with projections indicating further deceleration to 4.0% in FY25 due to lackluster investment and industrial activities.

Urban youth, particularly educated women, are experiencing rising unemployment rates despite an overall decline in joblessness between 2016 and 2022. The World Bank highlighted significant net employment losses in regions like Chattogram, Rajshahi, and Sylhet, despite job creation in Dhaka. Abdoulaye Seck, World Bank Country Director for Bangladesh and Bhutan, emphasized the need for urgent reforms to spur job creation and sustainable growth.

Inflation, driven by high food and energy prices, remains elevated, though it showed slight moderation between July and August. Bangladesh Bank's recent introduction of a crawling peg exchange rate system has helped narrow the gap between formal and informal exchange rates. Restoring banking sector stability and managing inflation remain key priorities as the nation strives for economic resilience.

(With inputs from agencies.)