Global research and advisory group Mastercard Economics Institute found that Bangladeshi consumers were forced to spend double for essential commodities than they did in the pre-pandemic period due to price hikes, resulting in reduced discretionary spending.
The MEI also noted that Bangladeshi consumers had spent most on groceries and electronics through digital channels in the post-pandemic period.
David Mann, chief economist for Asia Pacific at the Mastercard Economics Institute, shared these findings at a roundtable discussion themed 鈥楪lobal and Bangladesh Outlook and Risks鈥� on Thursday.
鈥楤angladesh鈥檚 economy continues to grapple with challenges due to weak domestic and external demands,鈥� Mann said, adding, 鈥楳EI鈥檚 Gross Domestic Product growth outlook stands at 5.8 per cent for the financial year 2023鈥�24, with a slight decrease to 5.7 per cent projected for FY2024-25.
He noted that persistently high inflation was impacting consumers鈥� purchasing power, with MEI expecting inflation to drop to 8 per cent in FY2024鈥�25 from 9.8 per cent in FY2023鈥�24.
He also projected an increase in the bank interest rate to 9 per cent in FY2024鈥�25 from 8.5 per cent in FY2023鈥�24, which was expected to help reduce inflation.
Welcoming initiatives by Bangladesh Bank in May, Mann said that the crawling peg exchange rate and the alignment between official and unofficial exchange rates were boosting remittances.
However, he warned that higher United States dollar rates could add to external sector woes.
Mann highlighted that global GDP growth was expected to be driven by the two largest economies in Asia鈥擨ndia and China. Despite China's slow GDP growth, its large share of the global GDP remained significant.
Mutual Trust Bank PLC managing director Syed Mahbubur Rahman emphasised the need to reduce intermediaries in the supply chain to combat inflation.
Mastercard Bangladesh country manager Syed Mohammad Kamal noted that their remittance business accounts for 20 per cent of the country鈥檚 remittances.
鈥楾he crawling peg exchange rate has encouraged people to bring remittances through legal channels, positively impacting our economy,鈥� he added.
Speakers provided insights into various aspects, including growth projections, inflation trends, interest rates, foreign exchange dynamics, export performance, remittance flows, excess savings, and credit markets.
They also discussed shifts in consumer spending, preferences for experiences over discretionary retail purchases, the persistence of digital adoption in certain sectors, and travel trends.
In his concluding remarks, former Bangladesh Bank governor Atiur Rahman highlighted Sri Lanka鈥檚 economic recovery.
He attributed Sri Lanka鈥檚 success to political will, macroeconomic reforms, strong monetary policy, and improvements in inbound tourism.
Mastercard Economics Institute, launched in 2020, analyses macroeconomic trends through the lens of the consumer.
