High cost of doing business obstacle to growth

BSS . Dhaka | Update:

Bangladesh will achieve 6.8 per cent GDP growth in the 2016-17 financial year (FY17), forecasts the World Bank (WB).

"Growth will be sustained at 6.8 per cent in 2017. The economy in Bangladesh has weathered global uncertainties well aided by strengthening investment and a recovery of exports," the WB said in its report on the South Asia Economic Focus, said a press release in Dhaka on Sunday.

The report titled "Globalisation Backlash" observed that infrastructure gaps and inadequate energy supply, combined with the high cost of doing business, remain the main obstacles to the realisation of Bangladesh's growth potential.

The report also forecast that Bangladesh's GDP growth will stand at 6.4 per cent in FY18 and 6.7 per cent in FY 19.

The report, however, confirmed that South Asia remains the fastest-growing region in the world, gradually widening its lead relative to East Asia.

"Regional GDP growth is expected to rise from 6.7 per cent in 2016 to 6.8 per cent in 2017, and 7.1 per cent in 2018," the report added.

It claimed that global integration has been good for economic development and poverty reduction. But the region would be resilient to higher trade barriers in advanced economies.

"It would even stand to gain if selective protectionism resulted in trade diversion away from established suppliers. South Asian economies also stand to gain from the observed recovery in advanced economies, which are their largest export markets," said the report.

The report quoted WB's South Asia Region Chief Economist Martin Rama as saying: "To make the most of this export opportunity, countries in the region should continue to focus on polices that promote economic growth."

He said, "A survey of South Asian experts conducted for this report reveals a strong consensus on the need to promote human capital accumulation, investments in infrastructure, and a more business-friendly environment."

South Asia region vice president Annette Dixon said "Simulations on the impact of hypothetical new trade barriers show that South Asia is not only resilient to a potential rise in protectionism but could possibly even gain from it in some circumstances."

"Advanced economies are recovering and could see faster growth that will likely increase demand for South Asian product," Dixon said, adding: "The region should seize this opportunity to diversify its exports and enhance its supply response."

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