Bangladesh has revised down the economic growth projection for 2023-24 fiscal year to 6.5 percent from the initial 7.5 percent considering the ongoing challenges in the economy.

The authorities, however, revised the projection for inflation upwards to 7.5 percent from 6 percent as consumer prices persistently stayed high, according to the monetary policy statement unveiled by the central bank today.

Inflation has been running at more than 9 percent since March last year despite credit tightening by the banking regulator in the first half of the fiscal year.

The BB said Bangladesh's economic outlook for the end of FY24 remains positive despite the ongoing challenges.

"With the concerted efforts of Bangladesh Bank, the government, and other stakeholders, stability in the foreign exchange market and improvements in corporate governance and non-performing loans management are also anticipated," said the banking watchdog.

The revision comes after the International Monetary Fund revised down its growth forecast for Bangladesh economy to 6 percent from 6.5 percent for 2023-24 fiscal year.

The World Bank also cut growth projection to 5.6 percent in the current fiscal year.

The BB said it finds itself at a critical juncture as Bangladesh's economy navigates through the latter half of the fiscal year, facing a multifaceted economic landscape.

"Internally, the economy is striving to restore the stability of the exchange rate and manage the inflationary pressures while dealing with the lingering issue of high non-performing loans," it said.

"The increasing costs of essential imports and the strain on the country's foreign exchange reserves add complexity to the domestic economic challenges," said the BB.

Globally, the central bank said, geopolitical tensions and trade uncertainties continue to roil commodity markets, exacerbated by growing rivalries among vital global powers.

"This international turmoil impacts Bangladesh's economy through disrupted supply chains and altered trade dynamics," it added.