Bangladesh’s outlook remains bright despite global uncertainty

Despite global uncertainty, Bangladesh's outlook has remained bright and the economy is expected to grow steadily, said a top economist of HSBC.

Frederic Neumann, chief economist for Asia of the multinational lender, made the comments while presenting the keynote at "HSBC Economic Outlook: A Perspective on Bangladesh" in the capital on May 12, according to a press release.

He presented the Global Economic Policy Uncertainty Index that graphically represented the global uncertainties over the years. The index peaking during the pandemic posed multifaceted challenges.

"Despite these headwinds, the outlook for Bangladesh remains bright, with growth expected to improve further as fiscal and structural reforms gain traction."

HSBC expects Bangladesh's GDP growth of 5.9 percent for the coming fiscal year of 2024-25 and 6.3 percent for 2025-26.

More than 200 clients and stakeholders, representatives from embassies, regulators and government officials were also in attendance at the event.

Neumann said the average incremental GDP in the next four years will be over $60 billion, which is higher than the predicted incremental GDP of many other Asian peers.

"The acceleration in growth should be supported by household spending and improving purchasing power amid easing inflation pressures."

Remittances are expected to rebound as well, driven by an improving global outlook, helping support consumption. Investment spending, too, is expected to pick up, led by exporters who are benefitting from the improving global trade cycle.

Neumann highlighted the near-record foreign direct investments flowing into Asia and stressed the need for Bangladesh to capitalise on this opportunity.

"Bangladesh is well-positioned to thrive in the coming years, building on its growing competitiveness, especially for readymade garments."

During a panel discussion, Salman F Rahman, private industry and investment adviser to the prime minister, said, "Despite doing well internally, economic repercussions arising out of external factors have posed challenges for the country, including declining foreign currency reserves and the appreciation of the dollar against the taka."

"We need to focus on domestic revenue mobilisation, modernising the tax collection system with wider tax net, and diversification of exports."

Md Mahbub ur Rahman, chief executive officer of HSBC Bangladesh, said: "As the world economy is on a gradual recovery, in Bangladesh, empowered by our skilled workforce, fueled by the surge in domestic demand, and buoyed by the rebounding remittances, our trajectory towards progress remains unwavering."

"We are encouraged by the positive signs in Bangladesh's economy, and we remain committed to supporting the country's growth."

Gerard Haughey, country head of wholesale banking of HSBC Bangladesh, said in the face of ever-evolving macroeconomic and geopolitical landscapes, staying abreast of market dynamics is imperative.

Rubana Huq, managing director of Mohammadi Group, and Zaved Akhtar, chairman and managing director of Unilever Bangladesh, also spoke at the event, according to the press release.