The Asian Development Bank's sharp downward revision in their projection of Bangladesh's growth in FY2023 - from the 6.6% it forecast in September to 5.3% in its latest Asian Development Outlook (ADO) of April 2023, understandably made the headlines this week. As one of the leading multilateral lending agencies that the government regularly works with, the media, civil society, and politicians all attach greater credibility to what the ADB, headquartered in Manila and mainly financed by Japan, may have to say on the economy at any given time.

This often contrasts with the views of say the World Bank, that many in our society tend to regard with a certain suspicion as tools of Western power - even more so in the present, politically charged climate. The ADB has almost been the quiet partner in Bangladesh's journey, mobilising over $50 billion to improve infrastructure, public services, and deliver social development for the country's people. Even just its current sovereign portfolio in Bangladesh has 50 projects worth almost $12 billion.

The downward revision, sharp as it was, puts the ADB almost at par with the World Bank's own projection of 5.2% - unchanged from its last update at the start of the year. So now they are both projecting growth falling well below the government's target of 6.5%, which itself would represent a significant slowdown from the 7.1% that was registered in FY22. Inflation is expected to weigh heavily on the economy, as the ADB has it accelerating from 6.2% in FY2022 to 8.7% in FY2023, with upward pressures telling on both domestic prices for fuel oil, gas, and electricity, and higher global commodity prices.

This has been borne out by the release of the government's latest inflation report, which showed a sharp spike in the Consumer Price Index in March, to 9.3 percent. Inflation had risen to 8.8 percent in February after falling for six straight months from a decade high of 9.5 percent in August - it means the March figure is the second highest recorded in a decade. Planning Minister Abdul Mannan made no secret of his fear that things could get worse, and even cross the psychological barrier of double figures (10 percent) in the months ahead, something the minister said he was 'praying' does not happen.

Meanwhile the ADO states that private investment growth will be lower because of energy shortages and higher production costs. Importantly, due to a shortfall in revenue collection, austerity measures, and depleting foreign exchange reserves, public investment growth, which has acted to fill in at times for the sluggish performance of the private sector in this regard, is also expected to slow down.

Of course, given that 2023 is a year that many countries around the world embarked upon with well-founded fears of a global recession, almost any growth, leave alone north of 5%, is nothing to scoff at. Within South Asia, the much larger economy of India and the much smaller economy of the Maldives are both slated to grow faster than Bangladesh, but the plight of Pakistan, Sri Lanka and Afghanistan cannot be ignored.

The slower growth forecast also rests on depressed domestic demand and weaker export expansion due to slowing global growth. A greater or more prolonged economic slowdown in Bangladesh's major export destinations, particularly in Europe, may drive a further wedge in growth prospects - something the French ambassador in Dhaka spoke on insightfully in But let's hope there is someone to listen to the planning minister's prayers.