• Tuesday, Sep 28, 2021
  • Last Update : 06:17 am

OP-ED: Bangladesh and its emerging economy

  • Published at 11:57 pm September 14th, 2021
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Photo: MEHEDI HASAN

In the CEBR report, Bangladesh ranks 40th among 193 nations this year and would ascend to 25th in 2034, a place presently held by Belgium

According to the World Economic League Table 2020, Bangladesh's economy would grow at one of the fastest rates between 2020 and 2034, thanks to a demographic dividend and growing per capita income.

According to the newest edition of the WELT, issued by London-based Centre for Economics and Business Research, an international economic forecaster, Bangladesh ranks 40th among 193 nations this year and would ascend to 25th in 2034, a place presently held by Belgium.

Many Asian economies will advance up the ranks of the WELT in the long run, according to the study, as these countries cash in on their demographic rewards.

The Philippines and Bangladesh are the two most notable instances, according to the report.

The Philippines will enter the top 25 largest economy in 2034, rising to 22nd position.

Bangladesh is a lower middle-income country, with a purchasing power parity adjusted GDP per capita of $5,028 in 2019.

2019 was a good year for the economy, with an outstanding 7.8% growth rate. This is, however, lower than the 7.9% GDP growth rate seen in 2018.

Since 2014, Bangladesh's population has grown at a pace of only 1% per year.

As a result, per capita income has increased significantly in recent years.

Last year, government debt as a percentage of GDP increased to 34.6%, up from 34% in 2018.

Despite the rise, the government's finances are in good shape. Because of the comparatively modest debt load, the government will be able to run a budget deficit of 4.8% in 2019.

Between 2020 and 2025, yearly GDP growth is expected to drop to an average of 7.3%.

The CEBR predicts that the economy will continue to grow at this remarkable rate over the next nine years, propelling Bangladesh from 40th to 25th place in the WELT by 2034.

The Philippines, Bangladesh, and Malaysia are the three fastest-growing Asian economies in the chart among the major economies.

India has surpassed both France and the United Kingdom to become the world's fifth largest economy in 2019.

In 2026, it will overcome Germany to become the fourth biggest economy, and in 2034, it will overtake Japan to become the third largest.

Between 2020 and 2034, Pakistan is expected to jump from 44th to 50th rank.

In addition, the Maldives will drop from 149th to 145th place.

Global standing

According to CEBR's 11th annual world economic outlook study, the United States will remain the world's largest economy throughout the 2020s, with China overtaking it only in 2033.

The WELT measures the size of various economies and forecasts changes over the following 15 years, from 2034 to 2034.

The basic data for 2019 comes from the IMF's World Economic Outlook, and the GDP prediction is based on CEBR's Global Prospects model, which forecasts growth, inflation, and exchange rates.

According to the study, 2019 was a poor year for the global economy, with GDP growth at its lowest level since the recession year of 2009.

However, the clouds began to lift near the end of the year, and the CEBR expects that global expansionary fiscal and monetary policies would drive growth in 2020.

Any residual "feel-good factor" from the global economy's boom in 2017 dissipated in 2019, and was replaced by increasing instability and uncertainty.

The United States and China imposed significant tariffs on each other's export industries, escalating trade tensions.

The continued resilience of the US economy is perhaps the most surprising aspect of this study, however the CEBR believes that 2019 will be the high water mark as the trade war and the deficit encroach.

However, in 2011, the US economy accounted for 21.2% of global GDP. Its market share increased to 24.8% in 2019, the most since 2007.

The biggest surprise is how well the US economy has performed, with its proportion of global GDP hitting its highest level in 12 years, according to CEBR Deputy Chairman Douglas McWilliams.

However, in our opinion, it has hit its peak, and the deficit and trade conflicts will begin to hold it back moving ahead.

Even yet, for an old world economy, this is a stunning result.

“The race for the top positions in the WELT league table is still hotly contested,” said Kay Daniel Neufeld, the CEBR's director of macroeconomics.

The CEBR predicts that the world in 2033 will be substantially different from that of 2019.

Many aspects of physical trade between Asia and Europe will be transported by land rather than by sea, as the emerging economies will have largely emerged; the largest element of trade will be down phone lines; and many aspects of physical trade between Asia and Europe will be transported by land rather than by sea.

 

The author is a student of North South University

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