Despite widespread political demonstrations in Bangladesh ahead of national elections in January 2014, gross domestic product (GDP) growth in Fiscal Year 2014 (ended 30 June 2014) is estimated at 6.1%, half a percentage point higher than projected in the Asian Development Outlook (ADO) 2014 in April. The strong performance came from higher public investment and strong exports. For FY2015, growth is now projected at 6.4%, slightly higher than forecasted earlier, as a revival in worker remittances is expected to bolster private consumption, while private sector investment will pick up on greater political stability. Moreover, the government will continue its efforts to step up project implementation.
Food prices were high for much of FY2014 because political unrest disrupted supply, pushing inflation up by 60 basis points to an average of 7.4% for the year, or nearly the ADO 2014 forecast. This Update retains the April projection, shared by the central bank, of 6.5% for average inflation in FY2015. Price pressures are expected to soften with easing supply constraints, a better crop outlook, supportive monetary policy, and large public stocks of food grain. Lower international food and oil prices will contribute.