Bangladesh set to become the 20th largest economy by 20382 min read
As per the recent projections from the Centre for Economics and Business Research (CEBR), Bangladesh is set to become the 20th largest global economy by 2038. This ascent is driven by consistent economic growth, with an estimated average annual gross domestic product (GDP) growth rate of 6.8 percent from 2023-24 to 2027-28, followed by a moderated pace of 6.2 percent annually in the subsequent decade.
Reportedly, over the next 15 years, Bangladesh is expected to significantly climb in the World Economic League Table (WELT), making a noteworthy advancement of 17 positions to secure the 20th place by 2038, compared to its current 37th position. The forecast also predicts a three-position rise by the next year, reaching the 23rd place by 2033.
As reported, in 2023, Bangladesh’s GDP per capita is $8,673. After a 7.1% expansion in 2021-22, growth moderated to 6.0% in the last fiscal year, resulting in a 25.6% output increase. The 2022-23 growth slowdown is linked to industrial contraction, driven by subdued export demand and currency depreciation. In 2023, inflation reached 9%, surpassing the decade’s average of 6.3%.
To address inflationary pressures, the Bangladesh Bank has adopted a tight monetary policy, raising the policy rate to 6.50 percent. Notably, there has been a paradigm shift in the monetary policy framework, transitioning from a monetary targeting approach to an interest rate targeting framework, accompanied by a commitment to a unified market exchange rate. This departure from the managed floating exchange rate system in operation since May 2003 is associated with the country’s participation in the IMF program initiated earlier in the year.
As reported, government debt as a percentage of GDP is projected to rise to 39.4 percent in 2023, up from 37.9 percent in 2022. The government maintained a relatively high fiscal deficit of 4.5 percent in 2023, supported in part by the low debt-to-GDP ratio, contributing to the bolstering of the economy in recent months, as per the CEBR.
The CEBR also commented on the prevailing global economic uncertainty, noting a shift in the overall outlook. Additionally, it highlighted specific challenges faced by major economies, such as the U.S. sustaining growth through borrowing, similar issues in the Eurozone compounded by limited political integration, and China confronting challenges originating from the property sector. Furthermore, the forecast envisions India emerging as the world’s third-largest economy by 2032, eventually surpassing China and the United States to become the “world’s largest economic superpower” by the end of the century.
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