Dhaka: The Asian Development Bank (ADB) has forecast better future for Bangladesh despite the ongoing unrest.

The Bank, in its flagship annual publication styled "Asian Development Outlook 2013" (ADO), released Wednesday, noted sanguinity about the Bangladesh economy, which is not only for the current 2013, but also for the election year 2014.

The Bank, however, identified four major areas where attention would be required to make the prospect a reality.

According to the ADO, the future of Bangladesh economy in the next two years would largely rest on four assumptions: First, the central bank's slight easing in monetary policy announced in January this year will not stoke inflation, given the declining trend in international commodity prices and a favourable domestic crop outlook.

Second, the government will contain subsidies by continuing to raise fuel and electricity prices and thus keep in check its need for bank borrowing. Third, though political activity is expected to be volatile, social stability will be maintained.

And, finally, weather will be favourable.

The outlook, however, projected GDP growth in the current 2012-13 financial year ending on June 30 would be 5.7 when export, a major contributor to GDP growth, is expected to slacken slightly.

It said the domestic demand would slow next year when people would be more cautious in spending ahead of the national election, but industries would grow at the rate of 6.5 percent in 2013 and 7.5 percent in 2014 "with expected improvements in external and domestic demand".

The ADO said the Monetary Policy Statement released by the central bank in January raised private credit growth target, signaling greater emphasis on sustaining growth while maintaining 7.5 percent target for average inflation for the year.

It said favourable rainfall during planting and expanded acreage sown to the winter rice crop should help agricultural output in FY3 recover to 4.2 percent growth. Greater access to credit resulting from central bank initiatives is expected to bolster output from livestock, aquaculture, and non-cereal crops.

In FY14, agricultural growth is projected to ease to 4.0 percent, returning to trend following the previous year's high base.

Services growth in FY13 is expected to slow to 6.0 percent, reflecting weaker economic activity, and then expand by at least 6.1 percent in FY14 on moderate recovery in overall demand.

Remittances grew by 17.3 percent to $9.9 billion in the first eight months of FY13 as more workers went to overseas besides substantial sales of government bonds to expatriate Bangladeshis.

It said better banking services also contributed to the large gain in remittance growth.

According to the ADO, the current account is projected to show a larger surplus of 2.0 percent of GDP in FY13 as the trade deficit narrows when foreign exchange reserves would rise further.

Ends/AMA/09/04/13