Friday, April 19, 2019

Bangladesh is poised to be world's 24th largest economy by 2033: Report

  • News Desk,
    Published: 2019-01-08 01:25:44 BdST

Representational Image: A 1.23 percent increase in Bangladesh's GDP is expected after the Padma Bridge becomes operational, according to government estimates.

Bangladesh is on track to become the world's 24th largest economy by 2033, says a new report.

The country has also been ranked 41st among 193 countries, up from the 43rd position since last year, according to the World Economic League Table, published annually by the Centre for Economics and Business Research, or CEBR, in London.

“We expect annual rates of GDP growth to average 7 percent between 2018 and 2033. This will see the country climb 19 places in the World Economic League Table to become the world’s 24th largest economy by 2033,” said the report.

Other Asian economies will rise during this period, with South Korea becoming the 10th largest, Indonesia (12th), Thailand (21st), the Philippines (22nd) and Malaysia (25th), all making the top 25.

Like many of the Asian countries, Bangladesh is set to witness a significant economic growth in the next 15 years. The report forecasts the country will gradually climb up to 36th position by 2023, 27th by 2028 and 24th by 2033.

The country has benefitted from garments exports, strong increase in remittances, duty free access to the Indian market, domestic consumption expenditure, government spending, according to the analysis.

Bangladesh’s competitiveness relative to India was boosted by the introduction of a General Sales Tax in India, a step that is still outstanding in Bangladesh, it said.

Around 43 percent of Bangladeshis work in the agriculture sector, mostly producing rice and jute. Maize, vegetables and wheat play a smaller albeit growing role in the country.

But the report warns that Bangladesh runs the risk of negating gains from its successful export sector through its growing appetite for imports.

“While the country has made important steps towards modernising its economy in recent years, significant challenges remain. On the political side, high-level corruption and tension between the main parties could lead to instability surrounding the parliamentary elections.”

It concludes that the government will need to explore options on how to increase revenues in order to finance upgrades for infrastructure while maintaining the social safety net.

China is set to overtake the United States to become the world's largest economy by 2032, said the report.

It predicts that three of the top five global economies by 2033 will be Asian, with China in top position, India third and Japan fourth. The US will be second and Germany fifth.

The new analysis indicates that China's Belt and Road Initiative could be an important growth driver. Infrastructure spending is set to increase from $11.5 billion, or 13.5 percent of global GDP last year, to $27.4 billion, or 15.5 percent, by 2032.