FROM PAGE B1

The report adds that the ratio of the poor population is expected to decline from the next fiscal year.

“Elevated inflation will put pressure on consumption, while forex rationing will constrain private investment,” the report said.

Inflation remained elevated in the first half of FY24, declining marginally to 9.7 percent in February 2024, driven by rising food and electricity prices. It averaged 9.02 percent in FY23 and is forecast to be 9.6 percent in the current financial year.

However, the multilateral lender predicts that inequality will remain stagnant.

The WB’s estimate of extreme poverty closely aligns with the figure of the Bangladesh Bureau of Statistics (BBS), which states that the ratio of the extremely poor is 5.6 percent.

The state-run statistical agency’s estimate of moderately poor people was 18.7 percent in 2022.

In Bangladesh, economic conditions deteriorated in FY23 as inflation accelerated and the balance of payments deficit widened, driven by a financial account deficit.

Foreign currency exchange rationing restricted imports, leading to electricity blackouts. Rising financial sector vulnerabilities have dampened growth prospects.

The global lender reported that unemployment was low in 2022 at 3.6 percent in Bangladesh, and the female labour force participation rate at 42.7 percent was almost half that of males.

However, job quality deteriorated between 2016 and 2022 as the percentage of employees earning more than $3.65 a day fell from 77.9 percent to 50.2 percent.

The WB said that estimated real GDP growth slowed in the first half of FY24 as private consumption and investment growth stagnated.

“On the supply side, industrial growth moderated as energy shortages and import restrictions offset steady external demand for RMG. The services sector slowed as domestic purchasing power declined, while agricultural growth remained modest.”

“This has impacted labour income, especially for vulnerable populations working in services and agriculture.”