Economy grows faster than forecast in FY 2015-16

Bangladesh’s economy grew 7.11 percent in the 2015-16 financial year that ended in June, the planning minister said on Tuesday, slightly faster than initially expected.

Gross domestic product was projected at 7.05 percent for the year ended in June, Mustafa Kamal told a news conference, up from 6.5 percent the previous year when political unrest crippled the economy.

Economy PhilipinesThe government aims to boost growth to 7.2 percent in the current financial year.

Garment exports and remittances from Bangladeshis working overseas are the key drivers of the country’s more than $200 billion economy.

However, the $28 billion garments export industry could suffer a drawback amid a series of militant attacks, the most serious on July 1, when gunmen stormed a cafe in the capital, Dhaka, and killed 20 hostages, most of them foreigners.

Remittances are Bangladesh’s second-biggest source of foreign income, after garments, but they fell 2.5 percent in the last financial year, to $14.93 billion, largely because of the impact of lower oil prices.

Early this year, the central bank cut its key interest rate by half a percentage point for the first time in nearly three years as easing inflation gave it more room to spur economic growth.

The South Asian country’s economy grew by an average of more than 6 percent a year during the past decade but economists say it requires at least 8 percent growth to become a middle-income country by 2021.