In 1971, Bangladesh’s economy was valued at USD 6.2 billion, and for a considerable amount of time after its independence, Bangladesh was seen as a symbol of “poverty and less development”. However, the nation is presently ascending to prosperity and economic brilliance.
Bangladesh’s GDP is now anticipated to surpass $1 trillion soon. The growth rate of the GDP has already shown a good trend. With an average growth rate of 6.4 percent during the previous five years, Bangladesh has already surpassed Vietnam, Indonesia, India, and Thailand as a developing economy.
Even if growth slows to 5% in that period, the nation is already on track to have a trillion-dollar GDP. By 2030, if growth remains at a 10 percent clip, the nation may have accomplished its goal. Furthermore, Bangladesh is now in a position to join the developing country category in 2026 as a consequence of this considerable improvement.
Bangladesh is also benefiting economically from its large consumer class, young population, high level of economic stability, SME boom, ICT miracle, people’s resilience, advancements in digital technologies, significant advancements in the field of education, and rapid expansion of the private sector. On the other hand, Bangladesh has accomplished such a remarkable feat thanks to a cohesive leadership structure and a solid political climate.
As a result, the smooth growth of the global south has been hampered by the present murky global economy. On the other side, Bangladesh continues to complete positive development efforts including megaprojects. At the same time, Bangladesh has maintained a friendly stance toward the world powers during this lengthy growth process. The wise diplomatic move not only enabled the development run but also provided a model for other developing countries to imitate.
Despite enduring obstacles in the post-Covid period, Bangladesh has maintained an average growth rate of 6.4%. Bangladesh has been considered as one of the world’s fastest-growing economies for more than a decade, thanks to various austerity measures and successful programs to overcome obstacles.
According to the most recent analysis by the Canadian business Visual Capitalist based on the work of the International Monetary Fund, Bangladesh was the second biggest economy in South Asia after India and placed 35th among the world’s major economies (IMF).
Meanwhile, the London-based think tank Centre for Economics and Business Research (CEBR) expects that Bangladesh would be the 20th biggest economy in the world by 2037, out of 191 nations. According to CEBR, Bangladesh is now the second biggest economy in the area and will remain so until 2037, with a GDP of $1,628 billion at current prices. Under these conditions, the Planning Ministry forecasts that Bangladesh’s economy would be worth $1 trillion by 2040 if growth rates fall below 5%. On the other hand, assuming economic growth is maintained at 8-9% and internal stability is maintained, it will reach $1 trillion by 2030.
How will Bangladesh get to the $1 trillion mark?
The path to the trillion-dollar club did not happen by chance; rather, it is the outcome of a comprehensive government strategy guided by a visionary leader. Because, mismanagement in several development spheres in previous decades shook the faith of the general public.
Simply defined, Bangladesh chose a more reliant posture rather than one of self-reliance. The current decade began with a bold government strategy of “development first.” Furthermore, Bangladesh’s economic outlook has altered dramatically since 2009. Bangladesh’s GDP has increased by a quadrupole ($465 billion) in the following ten years, from $115 billion in 2010.
Furthermore, the government is actively contributing to the nation’s economic growth, with public expenditure more than tripling over the previous decade, from Tk 532 billion in 2012 to Tk 2,254 billion by 2022. Previous government initiatives have resulted in literacy rates above 70% and electrical supplies exceeding 300 kWh per person. Furthermore, significant master plans such as the Smart Bangladesh ICT 2041 Masterplan and the Bangladesh 2021-2041 Perspective Plan are in place to define future government actions. These efforts will also aid Bangladesh’s economic growth in the future.
Second, during the previous ten years, there has been an increase in the consumer class in Bangladesh. Export-oriented businesses expanded, notably ready-made clothing and medicines, and poverty started to fall. As a result, the consumer class grew. As a consequence, Bangladesh is anticipated to surpass the United Kingdom and Germany to become the ninth-largest consumer market in the world by 2030, with middle- and upper-class population growth exceeding Vietnam, Thailand, the Philippines, Indonesia, and India by 2025. The middle- and upper-class population, on the other hand, is predicted to expand from 14 million in 2020 to 34 million by 2025. All of this points to a favorable business climate and the presence of a solid consumer class, which may assist Bangladesh in reaching a $1 trillion GDP in the future years.
Nonetheless, a large youthful workforce is eager to contribute to Bangladesh’s high-growth scenario. With a median age of 28 years, the nation has a younger population than most comparable economies. More over two-thirds of the whole population, or 68.4 percent, is of working age, implying that 114 million individuals are ready to produce value via employment, which has the potential to immediately stimulate the entire economy.
Furthermore, the thinking of Bangladeshi enterprises has changed dramatically over the previous decade, and the refined approach has already had an impact on the economy. Approximately 56 percent of organizations prioritize social impact and are geared to drive meaningful change; 83 percent have a bold, ambitious vision; 38 percent are focused on driving better customer outcomes through personalization; 78 percent strongly believe that they must build a culture of continuous transformation; and 61 percent are pursuing strategic international expansion to create global brands. These good feelings are also helping to build a strong corporate culture capable of reaching trillion-dollar milestones in the future years.
In addition, Bangladesh’s digital economy is gaining traction, with customer engagement expanding via digital channels. In the recent decade, mobile subscriptions have more than quadrupled, reaching 177 million by 2021, while internet users have increased by 70%. Because of a better digital economy environment, the amount of digital financial transactions more than quadrupled from 1.7 billion in 2019 to a projected 3.5 billion in 2022.
Furthermore, the global economy’s future seems to have a bright outlook. Spending on digital transformation (DX) is expected to reach 1.6 trillion US dollars by 2022. Global digital transformation investment is expected to reach 3.4 trillion US dollars by 2026. As a result, Bangladesh is firmly on the route to digital dominance, which will help it surpass the $1 trillion milestone.
Nonetheless, Bangladesh is the world’s second-largest supply of internet labor behind India, with 650,000 freelancers. As the gig economy continues to fuel economic prospects, the country is home to 15% of the world’s freelancers, behind only India (24.8%).
Finally, the growth of Bangladesh’s private sector is the most important phase and provides several advantages. With their enthusiasm and confidence, private enterprises are propelling Bangladesh’s development, putting the country on track to surpass the $1 trillion mark by 2040. In June 2022, private consumption in Bangladesh contributed for 72.8 percent of nominal GDP, up from 68.8 percent the previous year.
To summarize, Bangladesh has undergone considerable economic development in recent years, resulting in major socioeconomic change and higher living conditions for millions of people. However, the current global economic turmoil has posed several obstacles for Bangladesh. As a result, Bangladesh has taken a cautious and balanced approach to resolving the obstacles. One of the outstanding instances of Bangladesh’s amazing economy is the projection of achieving a $1 trillion GDP by 2040. Furthermore, these accomplishments will assist to guarantee that Bangladesh’s economy continues to thrive and that the nation stays one of the world’s fastest-growing economies.
– S. M. Saifee Islam is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).
Published in Eurasia Review [Link]