Bangladesh is set to overtake China in terms of GDP growth rate in the current financial year, according to the International Monetary Fund's (IMF) latest report on the Asia-Pacific region.
The report also predicts that Bangladesh will be in second place, after Vietnam, for achieving growth in the next fiscal year. Furthermore, Bangladesh is expected to surpass both China and India in terms of growth in 2024, according to the IMF's Regional Economic Outlook for Asia and Pacific May 2023 report.
IMFIn Bangladesh, growth will slow to 5.5% in 2023 because of demand-management measures, which is still higher than China's projected growth rate of 5.2%. But the economy of China is much bigger than that of Bangladesh.
The IMF report suggests that the recently approved Extended Fund Facility for Bangladesh will help address economic challenges caused by Russia's war in Ukraine, and the Resilience and Sustainability Facility arrangement will expand fiscal space to finance climate investment priorities and build resilience against long-term climate risks.
The report highlights the importance of international cooperation, particularly in securing financial assistance for climate change adaptation in vulnerable emerging markets in the region, including Bangladesh and the Pacific Islands.
The IMF predicts that China's economy will expand by 5.2% in 2023 as the rapid economic reopening generates a strong recovery in private consumption. In contrast, growth momentum in India is expected to slow as softening domestic demand offsets strong external services demand, with growth expected to moderate from 6.8% in 2022 to 5.9% in 2023.
Economies belonging to the Association of Southeast Asian Nations are also expected to experience a decrease in growth, from 5.7% in 2022 to 4.6% in 2023, due to factors such as slight moderation in domestic demand momentum (Malaysia, Thailand), monetary tightening (Philippines), commodity prices easing (Indonesia, Malaysia) and weaker external demand from the United States and Europe.
