'Wait and see,' says FinMin on WB's 3.4% growth forecast for FY27
Amir Khosru Mahmud Chowdhury gives a brief response as the World Bank cuts its Bangladesh growth projection by 1.2 percentage points.
Highlights:
- The World Bank lowered Bangladesh's FY27 growth forecast to 3.4%
- It also cut its FY26 projection by 0.5 percentage points to 3.4%
- Energy shortages, banking sector weakness and subdued credit growth
Finance Minister Amir Khosru Mahmud Chowdhury has responded with a "wait and see" approach to the World Bank's forecast that Bangladesh's GDP growth will slow to 3.4% in FY27.
Journalists asked the finance minister about the projection after a meeting with National Board of Revenue officials at the NBR's Agargaon headquarters today (6 October).
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"Wait and see," Khosru replied.
He left the NBR without making any further comment on the World Bank's forecast.
In its latest South Asia Economic Update, released today, the World Bank revised down Bangladesh's GDP growth forecast for FY27 by 1.2 percentage points to 3.4%. Its forecast for FY26 was also revised down by 0.5 percentage points to 3.4%.
The World Bank said Bangladesh's weaker outlook reflects a more prolonged drag from energy shortages, weakness in the banking sector, subdued credit growth and tighter fiscal constraints than previously anticipated.
Export growth is also expected to remain weak, with ready-made garment exports facing weaker demand in the European Union in the short term and increased competition in the longer term.
The World Bank projects South Asia's growth to rise to 6.9% in 2026 before moderating to 6.7% in 2027.
The 3.4% projection is the lowest among the South Asian economies covered in the World Bank's latest regional outlook. The report no longer groups Afghanistan and Pakistan under South Asia.
'Judgment cannot be made within one and a half months'
Asked about the decline in VAT collection during the first one and a half months of the current fiscal year compared with the same period last year, Khosru said it was too early to draw conclusions.
"Judgment cannot be made within one and a half months. There can be some problems at the beginning. Growth comes later, gradually," he said.
The finance minister also said the problems affecting revenue collection have existed for a long time and cannot be resolved overnight.
"Tax collection is slowly picking up. We have to encourage people to pay taxes. There have been problems on both sides for a long time. We are trying to ensure that people can pay taxes without being harassed," he said.
"It's working reasonably well and improving, although there is still room for further improvement," he added.
Khosru expressed confidence that the NBR would be able to meet its revenue collection target for the current fiscal year.
"We hope we will be able to meet the target that has been set. The NBR officials are geared up," he said.
