Bangladesh projected to be 20th largest economy by 2037

Bangladesh's long-term outlook looks brighter as a leading London-based think tank projects the country to become the 20th largest economy out of 191 countries by 2037, owing to its macroeconomic stability, strong remittance flows and a robust export market.

The Centre for Economics and Business Research (CEBR) last year projected that Bangladesh would become the 24th largest economy by 2036.

The CEBR disclosed its latest findings in its annual World Economic League Table (WELT 2023) report on Monday, stating that Bangladesh has been among the world's fastest growing economies over the last decade.

The country is forecasted to place 35th in 2023, reaching 26th spot in 2027, before eventually jumping to 20th in 2037, according to the latest report.

This represents an economic boom during the ongoing, as well as, the next decade.

Previously, the nation held 57th, 58th, and 42th positions in 2007, 2012, and 2017 respectively, indicating an upward trend in economic performance and consistency in growth.

India has been holding the top position in the South Asian region since the first edition of the report came out in 2009, and is forecasted to become the third $10 trillion economy in 2035 and the world's third largest by 2032.

Bangladesh is currently the second largest economy in the region, says the report, and will continue to keep its position till 2037 with a GDP size of $1,628 billion at current prices (currently $429 billion).

Pakistan (43rd) holds the third position followed by Sri Lanka (75th), Nepal (101st), the Maldives (152nd), and Bhutan (164th) in South Asia.

The US (1st), China (2nd), and Japan (3rd) are currently the top three economies in the world, and it is forecasted that China is now not set to overtake the US as the world's largest economy until 2036 at the earliest – six years later than expected due to the country's zero Covid policy and rising trade tensions with the West.

The think tank has classified Bangladesh as a lower middle-income country for 2022, lauding Bangladesh government's efforts to maintain a low debt-to-GDP ratio, while operating a 5.1% fiscal deficit in 2022.

Moreover, it mentions the strong macroeconomic fundamentals, infrastructure improvements and enhanced digitalisation that has enabled the country to move towards post-pandemic recovery.

The output growth in the fiscal 2020-21 was estimated to stand at 6.9%, after which growth is expected to have accelerated to 7.2% in the fiscal 2021-22.

The CEBR expects an average growth rate of 6.4% between the fiscals 2022-23 and 2026-27.

The source for Bangladesh's strong and consistent growth is being tied down to strong remittance flows and a robust export market, with the two factors anticipated to play a prominent role in the economy's growth moving forwards.

The report, however, mentioned that the economy might face multiple hurdles while achieving a medium- to long-term outlook.

While GDP rose relatively strongly in the fiscal 2021-22, inflation also ran hot, a fallout of the Russia-Ukraine conflict being one of the causes.

The paper deems high inflation as a key downside risk for Bangladesh, not least due to the fact that it leads to a higher current account deficit, in light of elevated commodity prices.

It proposed strong foreign direct investment from both India and China to help accelerate such developments.