Bangladesh among 5 fastest growing global economies: WB

Bangladesh is among the top five fastest growing global economies thanks to export-oriented industry-led stable macro economic growth while the country needs more private sector investment alongside technological and human resources development to attain sustainable growth.

The World Bank said this in its ‘Bangladesh Development Update: Towards Regulatory Predictability’ which was launched today at its local office here.

The Update said that to sustain growth, the country needs continuity in priority reform areas – financial sector, fiscal, infrastructure, human capital and business regulation.

It said private sector investments remain insufficient along with declines in foreign direct investment (FDI).

World Bank Country Director Robert J Saum spoke on the occasion while its Lead Economist of Dhaka office Dr Zahid Hussain made the key-note power-point presentation.

The lending agency forecast 7.3 percent GDP growth rate for Bangladesh in the current fiscal year (FY19) followed by 7.4 percent in FY20 and 7.3 percent in FY21.

The latest projection of the World Bank was lower than the government’s provisional estimation of 8.13 percent and the Asian Development Bank’s latest projection of 8 percent.

The development update also showed that Ethiopia is going to attain the highest GDP growth rate in the world in this fiscal year (FY19) with 8.8 percent followed by Rwanda with 7.8 percent, Bhutan with 7.6 percent, India with 7.5 percent, Djibouti, Ghana, C”te d’Ivoire, and Bangladesh all with 7.3 percent.

“Robust growth in the industrial and services sectors, supported by higher public and private consumptions, boosted growth,” said World Bank Country Director Robert J. Saum at the Bangladesh development Update launching.

Asked about the possibility of attaining 8 percent growth rate, he said, “Bangladesh is now one of the top 5 growing economies in the world and little over 7 percent or even approaching 8 percent …the message is that Bangladesh is on a very high growth rate.”

Saum said, “The most important is the high growth rate and in that regard the path is on. We all especially the World Bank would be very happy if we could reach over 8 percent.”

Answering a question, Zahid Husain said to attain sustainable growth or 8 percent growth or beyond, Bangladesh needs to boost private sector investment as well as ensure technological and human resources development given that an enabling environment is created.

He said in order to become a higher middle-income country and thus a developed country by 2041, there is no alternative to boosting investment and productivity, and attaining growth on a sustainable basis.

The World Bank Country Director said after the modest performance during the FY18, export earnings so far this year from RMG expanded by double digits, and non-garment exports also bounced back.

Officially recorded remittances have been robust, sustaining consumption and helping the rural economy grow faster, inflationary pressures have been contained.

“The overall macroeconomic stability has been maintained. The government kept the budget deficit below 5 percent of GDP and the debt to GDP ratio is well within sustainability threshold,” he said.

The World Bank country director, however, said sustaining rapid economic growth to meet Bangladesh’s development aspirations will require significant reform efforts, including increasing the predictability of regulation.

“Initiatives are needed to address several challenges, particularly in boosting private investment and diversifying exports. The banking sector is struggling with non-performing loans and private sector credit growth slowed. Domestic revenue mobilization is well behind the target so far this year,” Saum added.

He also noted that lowering barriers to investment by ensuring financial stability, strengthening revenue mobilization, improving infrastructures, investing in human capital, and enhancing the effectiveness and predictability of regulation are critical for sustaining jobs and productivity growth.

Saum mentioned that Bangladesh has shown remarkable generosity in sheltering and providing for the basic needs of nearly one million forcibly displaced Rohingyas in Cox’s bazaar.

He also said that the World Bank Group is committed to the continued development progress of Bangladesh.