A spate of downgraded economic projections, from Bretton Woods to Manila, has raised eyebrows on the near-term outlook for the Bangladesh economy. First the Asian Development Bank (ADB), then the World Bank (WB) and now the International Monetary Fund (IMF) have expressed their diffidence, which is basically what a downgrade in projections implies. The ADB's country-specific releases of the latest Asian Development Outlook (ADO) on September 23 had downgraded its earlier projection of 4.5 percent gross domestic product (GDP) growth for the current fiscal to 4 percent. At the same time its inflation projection was revised upward from an earlier 8.8 percent to 9 percent.

Then the World Bank's latest Bangladesh Development Update drastically revised its April projection of 4.6 percent growth of the Bangladesh economy to just 3.4 percent. It attributed Bangladesh's subdued growth prospects partly to the prolonged Middle East war, which is aggravating existing economic weaknesses, including problems in the financial sector, low revenue mobilisation, energy-sector inefficiencies and an unfavourable investment climate.

"The return of political stability was expected to lead to a rebound in economic activity, but this has not yet materialised," the World Bank said in its Bangladesh Development Update, released on October 6.

According to the IMF's latest World Economic Outlook on Tuesday, Bangladesh is projected to become South Asia's slowest-growing economy through 2031. The IMF expects growth to decelerate to 3.2% in the current fiscal year (FY27) and bottom out at 2.2% in FY28, before making a sluggish recovery to roughly 3% by FY31. It is difficult to see how that can be reconciled with the government's five-year strategic framework published in August, which sets an ambitious growth target of 8.5% by FY31.

It certainly throws a spanner in the works for the finance minister, who set out an ambitious budget for this fiscal, in which none of the bottlenecks delved into by the three multilateral lending agencies received as much critical attention, even as it championed reform measures. The collective message from the three reports, if one could attempt to find one, would be that the government has to go harder, and faster at reforms to do with the economy. And while there may be a certain wisdom in that, it is only the government that has the job of balancing that need with its available political capital.

It's a delicate act, indeed the tightest of ropes, but that is what they were elected for. There is a sense that the BNP government has not been bold enough yet, in a way that reflects the 2/3rds majority it won in the February election. It can afford to take some hard decisions, and it can resist the pressures from foreign forces that turn it into fodder for the global competition between large multinationals such as Boeing and Airbus, because of the mandate it enjoys from the people. It is their needs that the government must look to prioritise, if it is to pass the test on the economy, which at the end of the day can be the undoing of many administrations.