BANGLADESH, a market based economy, has successfully sustained a robust GDP growth over the past seven years.
Its per-capita income was estimated at $1,316 in 2015-16 which is expected to increase by 11.39pc to $1,466 in 2016-17, according to the Bangladesh Bureau of Statistics.
Although around 47m population is still living below the poverty-line, Bangladesh is now focusing on establishing itself as a middle-income economy by 2021, after having beaten poverty to phenomenal levels, with reduced population growth, improved health and education, as compared to past years.
The government has implemented a policy reforms to create an open and competitive climate for foreign and local private investment. The garment industry, other exports, and overseas labour of the country have greatly helped in reducing poverty and sustaining growth.
Foreign investment is a key element of the growth plan, and will need an annual GDP growth of 7.5–8pc which is possible by overcoming significant obstacles and seizing opportunities inevitable by changing global circumstances.
A decrease in economic reliance on low-cost exports, like garments, and focus on higher education and technical and vocational skills training will further help.
In FY15, Bangladesh achieved a handsome 6.6pc growth. GDP growth is expected to be 7.05pc in FY16 before slowing to 6.9pc in FY2017, according to the Asian Development Outlook 2016.
The government is strengthening its efforts to attain high revenue target, keeping the growth target at 7pc for the FY17, the country’s central bank forecasts average growth between 7.1-7.3pc.
For infrastructure projects and achieving growth targets, the country aims to raise revenue to 12.4pc of GDP for financing a larger annual development programme and a major increase in other capital spending in its next budget.
The deficit is targeted at 5pc of GDP with about 60pc to be financed by domestic borrowing.
According to FocusEconomics, FDI in Bangladesh played an important role in expanding growth in the past, but it is likely to suffer due to the increasing security risks this year.
The economy is expected to slow down, expending 6.8pc in FY17, before picking up to 6.9pc in FY18.
Bangladesh economy has braved weak global prospects and Brexit and remained driven by its garment sector. The World Bank projects growth for 2017 at 6.8pc and the IMF at 6.9pc.
Bangladesh’s shipbuilding industry could emerge as a new growth driver. BMI expects the GDP growth to remain steady but domestic security threats could pose
downside risks to its economic growth trajectory over the medium term. Goldman Sachs had termed Bangladesh’s economy as ‘the miracle of East’.