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Bangladesh to become 3rd fastest growing economy in world in 2019

  • Published at 10:40 pm January 22nd, 2019
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UN’s report on World Economic Situation and Prospects unveiled

Bangladesh will be the third fastest growing economy in the world in terms of achieving high Gross Domestic Product (GDP) in 2019, according to a United Nations report.

The report titled World Economic Situation and Prospects put Bangladesh only behind South Sudan and India. Bangladesh will expand at 7.4% this year, while India at 7.6%, and South Sudan to grow at a staggering rate of 8%, it said.

“The economic outlook for South Asia is highly divergent across countries. There are some economies, including Bangladesh, Bhutan and India, where economic conditions are largely positive, with GDP growth projected to remain robust in the near term.

The UN in its report, published on Monday, said Bangladesh economy is also set to continue expanding at a fast pace in the near term, above 7% per year, amid strong fixed investment, vigorous private consumption and accommodative monetary policy.

Focusing on South Asian economy, the flagship UN report   said the regional GDP is expected to expand by 5.4% in 2019 and 5.9% in 2020, after an estimated expansion of 5.6% in 2018 . Economic growth is expected to be supported by private consumption and, in some cases, investment demand, even as monetary policy stances tighten in some economies. Despite the increase observed for inflation figures throughout 2018 due to the depreciation of domestic currencies

Highlighting the economies of Bangladesh and India, it said economic growth is expected to be supported by private consumption and, in some cases, investment demand, even as monetary policy stances tighten in some economies. Despite the increase observed for inflation figures throughout 2018 due to the depreciation of domestic currencies and higher oil prices, inflation is expected to accelerate only moderately or to remain stable in most economies in the near term.

The report highlighting on downside risks on South Asian economies said political uncertainties and infrastructure deficit could weigh on the growth prospect of South Asia.

“The downside risks to the projections have recently increased across the region, because of domestic and external factors. On the domestic side, political uncertainties, setbacks in the implementation of reforms and, in some countries, security problems can affect investment prospects. This is a crucial issue, as the region needs to tackle the infrastructure bottlenecks for promoting productivity growth, encouraging further poverty reductions and adjusting to climate change.”

On Bangladesh, the report further said: ”The fiscal deficit in Bangladesh is at a record high, close to 5.0 per cent of GDP, as the country struggles to expand the tax base.”

Talked, Mirza Azizul Islam, former adviser to a caretaker government said the economic growth will keep its momentum in coming years if enhanced private sector investment was made in the economy.

“The government should focus to accelerate economic growth, as well as reducing income inequality to sustain the growth momentum,” Aziz told the Dhaka Tribune.

The report said Bangladesh economy will grow at 7.2% in 2020, while Indian at 7.4%.

Focusing on global economy, the report of the UN said urgent and concrete policy action is needed to reduce risks to the global economy and secure the foundations for stable and sustainable economic growth. 

“A dynamic and inclusive global economy is central to delivering the ambitious targets of the 2030 Agenda for Sustainable Development. Policymakers must work to contain short-term risks from financial vulnerabilities and escalating trade disputes, while advancing a longer-term development strategy towards economic, social and environmental goals.”

“Decisive policy actions rely on a multilateral, cooperative and long-term approach to global policy-making in key areas, including combating climate change, sustainable finance, sustainable production and consumption, and redressing inequality. This also requires progress towards a more inclusive, flexible and responsive multilateral system.”