Anticipating remarkable growth, Bangladesh is positioned to ascend as the 20th largest global economy by 2038, as forecasted by the Centre for Economics and Business Research (CEBR). This transformative leap signifies a substantial advancement from its current 37th position in 2023.
Despite navigating global challenges, Bangladesh’s economy showcases unwavering resilience and consistent growth. In the fiscal year 2021-22, the nation achieved an impressive 7.1% expansion. Although growth moderated to 6% in FY23, it maintained a robust 25.6% increase above pre-pandemic levels. The slowdown in FY23 was primarily attributed to industrial contraction, influenced by reduced export demand from advanced economies.
Confronting economic challenges, including currency depreciation and spikes in fuel and energy prices, Bangladesh witnessed a notable surge in production and transportation costs, leading to an increase in consumer prices. In 2023, inflation spiked to 9%, a significant rise from the decade’s average of 6.3% leading up to 2021, according to CEBR.
Addressing inflationary pressures, the Bangladesh Bank implemented a tight monetary policy, elevating the policy rate to 6.5%. Notably, the country underwent a pivotal shift in its monetary policy framework, transitioning from monetary targeting to an interest rate targeting system. This aligns with Bangladesh’s commitment to a unified market exchange rate system, departing from the managed floating exchange rate system in place since May 2003.
While government debt as a percentage of GDP increased to 39.4% in 2023, up from 37.9% in 2022, the country’s low debt-to-GDP ratio has contributed to economic stability. Looking ahead, CEBR foresees an acceleration in the annual GDP growth rate, projecting an average of 6.8% from FY24 to FY28, followed by a slightly moderated average of 6.2% per year over the subsequent decade.
Bangladesh’s journey to the 20th largest economy by 2038 signifies not only economic growth but also resilience and strategic adaptation in the face of evolving global dynamics. Explore the dynamic economic landscape of Bangladesh as it charts its course towards global prominence.
