Thursday, 21 October, 2021

Bangladesh to become $500bn economy by FY26

  • Staff Correspondent
  • 8 October, 2021 12:00 AM
  • Print news
Bangladesh to become $500bn economy by FY26

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After a strong bounce back in FY22 from the Covid-19-struck slowdown, Bangladesh’s economy is estimated to maintain over 7 per cent growth in the next four fiscal years to eventually become a $500 billion economy by FY26.  

Leading economists of Standard Chartered Bank has made the estimate, citing a recovery in domestic consumption and global growth rebound from the current fiscal year.

The country’s medium-term outlook is strong; structural drivers such as favourable demographics, rising urbanisation and digitisation are intact, they said.

By this time, the country’s per-capita income is going to be $3,000 from $2,227 now. This will also coincide with Bangladesh’s graduation from LDC status by 2026, which is likely to open up a large window of opportunity before it. 

Standard Chartered Bank’s global research team made the observations at a recent media session held following the 2021 Bangladesh session of the bank’s Global Research Briefing series. 

They said Bangladesh remains a compelling growth story, despite the global pandemic, according to a release of the bank.

"The people of Bangladesh, including the government and our business community, have once again demonstrated our tremendous resilience ensuring that our shared development journey might have slowed, though it has not been halted,” said Planning Minister MA Mannan while speaking at the virtual event as the chief guest.

“We remain as committed as ever in fostering a business-friendly climate so that we can continue on our journey of inclusive progress and prosperity," he added.

“While the pace and distribution of global recovery remain highly uneven, Bangladesh has made a strong comeback with one of the highest GDP growths in the world in 2020” Standard Chartered Bank’s Global Head of Research and Chief Strategist Eric Robertsen said.   

“A robust vaccination programme and implementation of strategic infrastructure projects are expected to further increase momentum towards the nation's LDC graduation,” he remarked.  

Bangladesh's economy is set to accelerate after a speed bump, with GDP growth forecast at 5.5 per cent in FY21 and 7.2 per cent in FY22, Standard Chartered Economist for South Asia Saurav Anand stated.

 The momentum will be driven by an export demand recovery, strong remittance inflows and public investment. Policy support is a prerequisite for a smooth transition to middle-income status, with per capita GDP set to reach $3,000 by FY26, he added.

Standard Chartered Bangladesh CEO Naser Ezaz Bijoy said, "The government of Bangladesh has navigated the internal and external challenges of the pandemic remarkably well. The resilience of Bangladesh economy gives us cause for optimism.”

As the vaccination drive continues, the economy is set to accelerate, while lower debt levels compared to its peers provide a medium-term fiscal runway for growth, according to the economists.

There are significant opportunities for productivity gains through technology adoption, technology inclusiveness through mobile-based solutions and the ITES sector, while growth-supportive policies focus sectors will continue to spur private investment and FDI, they also observed.