Dhaka, Bangladesh (BBN)- The Bangladesh Bank (BB) expects that the country will soon become a middle income country after posting US$976 as per capita income by 2013.

The central bank of Bangladesh observation came as the gross national income (GNI) of the South Asian country has raised by over 50 percent to $690 in the last four years up to fiscal year 2008-09 (FY09).

“At this rate, reaching the middle income threshold of $976 should not take more than another four years, say, not beyond 2013,” BB Governor Atiur Rahman said on Sunday while releasing the annual report for the FY09.

Regarding GNI growth, Senior Consultant of the central bank Allah Malek Kazemi said the GNI of Bangladesh has grown rapidly following increased economic growth along with the inflow of remittances.

“The Human Development Index will have to be improved significantly. The government is now working on the issues to come out from the group of least developed countries (LDCs) by 2020,” he noted.

Although global economy is beginning to stabilize showing the signs of recovery, the third wave of recession is likely to impact the Bangladesh economy, necessitating some downward revision in the medium term economic forecasts, according to the report.

“Unless the global economy recovers rapidly, FY10 will be a challenging one to attain the growth projection close to FY09 level within the indications that the global financial crisis is beginning to impact the economy,” the annual report noted.

The report said stabilizing the inflation rate is a major challenge for the policymakers because a low and stable rate of inflation is critical for accelerated economic growth and poverty reduction.

“The plummeting trends of global commodity prices by and large ceased in the beginning of 2009 and started to edging up, may involve some risk of exacerbating domestic inflation,” it added.

The central bank however has identified six risks, including infrastructure constraints particularly power, gas, ports and transportation in the economy.

The report said the outlook envisaged in the Medium Term Macroeconomic Framework (MTMF) faces several near and medium term downside risks and uncertainties originating from probable adverse effects of the global financial crisis on exports and workers’ remittance inflows, continuous return of migrant workers laid off in recession-ridden host countries, weakening in investment momentum, risk of exacerbating domestic inflation if unexpectedly faster global recovery takes hold and floods and other natural disasters and climate change.

“We’ve already taken measures to off-set the risks,” the central bank chief said while replying to a query and added that the central bank is ready to face any risk.

Initiatives to remove infrastructure inadequacies, especially the power shortages, should be taken as priority to support the near and medium term gross domestic product (GDP) growth targets and to improve external competitiveness, the central bank recommended.

In the updated MTMF, the real GDP growth has been projected conservatively to be in the range of 5.5 percent to 6.0 percent in FY10.

“The growth rate for FY10 may exceed the target following faster global economic recovery together with investment plan implementing initiatives, including public private partnership (PPP),” it noted.

On the other hand, inflation is projected to decline to 6.5 percent in FY10 and to 6.0 percent in FY12, with monetary policy stance to support attainment of highest sustainable output growth without triggering escalation of inflation.

BBN/SS/SI/AD-25 January10-1:59 am (BST)