Bangladesh 2nd largest economy in South Asia
Bangladesh has been ranked 41st among the world's largest economies in 2019, moving up two notches from last year's. The country has become the second biggest economy in South Asia, according to an analysis by a London-based think-tank.
Among the other South Asian countries, India is ranked 5th, Pakistan 44th, Sri Lanka 66th, Nepal 101st, Afghanistan 115th, the Maldives 156th, and Bhutan 166th, in the World Economic League Table, published annually by the Centre for Economics and Business Research (CEBR).
With the United States at the top of the table, China, Japan, Germany and India take the lead as the top five economies.
The report which forecasts the fortunes of 193 countries to 2033 says China is likely to overtake the US as the world's number one economy in 2032, two years later than previously expected, due to a more lax monetary policy and lower exchange rate.
In the long run, many Asian economies will rise through the ranks of the table as these countries cash in on their demographic dividends.
The two most prominent examples are Bangladesh, which will enter the top 25 largest economies in 24th place in 2033, and Pakistan, which will rise to 27th in 2033, said the report.
“We expect annual rates of GDP growth [in Bangladesh] 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, which was released on December 26.
Bangladesh will rank 36th in 2023 and 27th in 2028.
Bangladesh is a South Asian country sharing land borders with India and Myanmar. With a population of over 163 million, it is the eighth most populous country in the world. The country has seen robust growth averaging 6.3% per year over the past decade. Its GDP per capita stands at $4,600 in PPP international dollars, making it a lower-middle income country by the World Bank’s definition.
Garments are the main export good of the Bangladeshi economy, accounting for over 80% of total exports in the financial year ending 2017. Remittances are a further important source of income for the country. Around 43% 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.
Bangladesh’s economy is expected to have grown by 7.3% over 2018, just shy of the 7.4% recorded in 2017.
The country has benefitted from a strong increase in remittances in the financial year ending 2018, after declines in the previous two years. Moreover, the export sector benefitted from the duty free access to the Indian market, pushing exports to $375 million in the three months to September. Indian clothing retailers, as well as global retailers opening Indian outlets, increasingly import from Bangladesh due to the competitive prices of their products. Bangladesh’s competitiveness relative to India was further boosted by the introduction of a General Sales Tax in India, a step that is still outstanding in Bangladesh.
Growth in Bangladesh’s economy is driven by domestic consumption expenditure, government spending, remittances and exports. 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 at the end of 2018. As for the economy, Bangladesh runs the risk of negating gains from its successful export sector through its growing appetite for imports. The current account tipped into a deficit in 2017, and this is expected to widen in 2018. The government will also need to explore options on how to increase revenues in order to finance upgrades for infrastructure while maintaining the social safety net. The country is further grappling with the Rohingya refugee crisis.
We expect annual rates of GDP growth to average 7.0% 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.