Bangladesh has made tremendous progress over the years both in terms of economic development and social advancements despite slowdown world economy, economists said. Although the world economy had gone through a critical juncture and struggled to maintain economic growth last year, Bangladesh has maintained smartly to ensure sustainable growth, world experts opined.
Projected economic growth in South Asia has declined 1.1 percent during the last six months, they said, adding Bangladesh, on the other hand, has adapted to the rapidly changing landscape and managed to maintain its impressive record of economic growth. Despite the country has been facing various challenges to maintain sustainable growth in major economic indicators except remittance growth in last six months, economists said, expecting that Bangladesh’s economy will move forward and rebound its growth in New Year-2020.
The government should take some new policies to tackle on global recession of the economy like 2009 when the world economy has maintained slowdown, which has not effected the Bangladesh’s economy, they added. “Today, as the 32nd largest economy, we are recognized as one of the fastest growing economies in the world. Our annual GDP growth has been steady in the last decade, and was 8.13 percent this year,” they mentioned.
In fact, the IMF has just projected that Bangladesh will be the second fastest growing economy globally, experts opined. The World Bank has ranked Bangladesh among the five fastest growing economies in the world, they said. The Asian Development Bank projected Bangladesh to log the fastest economic growth in Asia Pacific in 2019-20, they mentioned.
Bangladesh has changed and the people are now witnessing the advent of a new Bangladesh, if the country has changed its policy on market demand, they added. Former lead economist Zahid Hussain told The Bangladesh Post, “Bangladesh economy is growing but it has a lot of challenges ahead.”
He said, “The country’s major economic indicators have already shown downtrend. Hence, the government should take some new policies to manage this situation.” He mentioned, “The government should emphasize to improve ease of doing business, infrastructure development and communication system, which will encourage local and foreign investors to inject funds into different sectors.”
Hussain mentioned, “Vietnam has gotten advantages from China and the US trade war as the country has built many economic zones for investors to ensure business friendly environment.” “Bangladesh is building 100 special economic zones, which will help attract investors to invest in the country, but the government should quickly build some economic zones.
Former advisor to a caretaker government and eminent economist, AB Mirza Azizul Islam told The Bangladesh Post that the government should emphasise on to improve ease of doing business to create business friendly environment. Besides, the government should facilitate private companies to ensure more contribution to economy, he said.
For export diversification, the government needs to encourage entrepreneurs by giving several fiscal and technical support, he added.
However, the country has recently made the success stories include impressive GDP growth, per-capita income, macroeconomic stability, fall in poverty rate, better exports, remittance and most importantly, policy continuation with the continuation of the government.
On the other hand, the country has faced many difficulties including the inability to contain onion price, ensuring better price for raw hides, growing income inequality, rising non-performing loans in the banking sector, some project scams. Growth in the country’s economic output hit a record high at 8.15 percent with $1909 per-capita income in the 2018-19 fiscal year, up from 7.86 percent growth and $1,751 per-capita income a year earlier.
The poverty rate declined to 20.5 percent in 2019, which was 21.8 percent one year ago, according to the latest data of the Bangladesh Bureau of Statistics (BBS). However, Bangladesh began 2019 with things looking up on the economic front coupled with political stability after election, but concerns have blunted it at the end of the year.
The pace gathered in the past few years is suddenly lost as almost all indexes bar remittances have slipped into the negative territory. The country’s remittance inflow has made a new record standing at $18.34 billion at the end of 2019, according to Bangladesh Bank (BB) estimation.
Export earnings have dipped, revenue collection decreased, inflation is on the rise, import has also dropped, putting the foreign currency reserves under pressure. Investment has dried up with around Tk 2.5 trillion in default loans sinking the banking sector while the stock market is struggling to turn around from a propensity of diving.
Bangladesh’s GDP, however, saw a robust 8.15 per cent growth in the last financial year, leading the government to set a target of 8.2 per cent growth for fiscal 2019-20. But, the question, as to whether that growth target can be met, remains at the end of the year. Eminent economist Barkat-e-Khuda, also Dr Muzzafar Ahmed chair professor of BIBM recently presented the key-note paper titled “Major Drivers of Economic Growth in Bangladesh and the Role of the Banking Sector”.
He said, “Since Independence, Bangladesh has come a long way in improving its economic condition.” “Bangladesh has the third highest Gross Domestic Product (GDP) PPP in South Asia, after India and Pakistan,” he said, adding, “Recently, Bangladesh graduated from LDC status to a lower middle income country; and hopes to become a developed country by 2041.”
He said, the country's economy is increasing on export earnings, remittance growth as well as agricultural development and expansion in medium, small and micro enterprises (MSMEs). Despite improvement in the overall economic condition, there are major constraints impeding the process of further acceleration of the growth, he informed.
He said, these include, among others, relatively low investment-GDP ratio, infrastructure deficits and lack of good governance. He mentioned, banks have contributed to the process of economic growth. However their contribution could have been greater if they had effectively addressed various challenges faced by the banking sector such as weak management, poor governance, lack of strong leadership, and non-compliance with ethical standards, leading to various types of banking scams such as money laundering and NPLs.
