Bangladesh growth outlook uncertain

DHAKA |
Tue Oct 25, 2011 7:23pm IST

DHAKA (Reuters) – Bangladesh has insufficient fiscal leeway to cushion the impact of a global slowdown and its growth outlook for the year to June 2012 is uncertain, the World Bank said on Tuesday.

Areas of concern include an increasing fiscal deficit, high and volatile inflation, overshooting of monetary targets, financial sector weaknesses and growing external imbalances, it said.

The country’s year to June 2011 growth rate of 6.7 percent, helped by strong performance in the manufacturing and construction sector and a bumper harvest, can only be sustained if exports continue to grow, according to the World Bank’s bi-annual economic update.

What would work in Bangladesh’s favour are lower international commodity prices, particularly oil and food, the report said.

Bangladesh’s government is grappling with high inflation and aims to bolster economic growth to 7 percent in the 2011-12 fiscal year, driven by exports and inflows of remittances.

Exports, largely garments, rose 22 percent year on year in the three months to September while funds from Bangladeshis working abroad rose 9 percent, a slower pace of growth than the previous year.

(Reporting by Ruma Paul; Editing by Anis Ahmed, John Stonestreet)

Article source: http://feeds.reuters.com/~r/reuters/INsouthAsiaNews/~3/JS3REJI88LA/idINIndia-60116020111025

Tags: Breaking News, World News