Finding new markets for exports, attracting large numbers of foreign investors and investing in mega projects have been contributing to the economic growth of Bangladesh, said International Chamber of Commerce-Bangladesh (ICCB).
The News Bulletin (Oct-Dec, 2019) of ICCB published on Wednesday said the performance of the economy of Bangladesh in 2019 with reference to global, macro and micro levels presents a mixed picture.
Globally, Bangladesh did not suffer any major setback during the year, but it faced some obstacles from the shrinking trend of global economic growth.
It said the country achieved an 8.15 percent growth in GDP (Gross Domestic Production) in FY2019, considered by the Asian Development Bank (ADB) as the fastest-growing economy in the Asia-Pacific Region.
According to World Bank Chief Economist for the South Asia Region, Hans Timmer, "Bangladesh is doing better than the rest of the region, especially than India, Sri Lanka and Pakistan. We see that in industrial production; we see that in exports."
Bangladesh's export earnings in 2019 was $39.33 billion which was $39.25 billion in 2018. Import payment during 2019 was $59.09 billion against 60.49 billion in 2018.
Remittance earnings stood at $20 billion at the end of 2019, registering a growth of 9.8 percent being boosted by the depreciation of Taka and cash incentives given at the rate of 2.0 percent of the remitted amount.
The ICCB bulletin said, mentioning a report of World Economic Forum (WEF), the success of the IT industry is central to the digital transformation and ongoing economic growth of Bangladesh. The country exports nearly $1 billion of technology products every year – which is expected to increase to $5 billion by 2021.
According to the WEF, Bangladesh has 600,000 IT freelancers.
According to the ICCB, the government depends on bank borrowing to finance its development programmes, due to limited resource mobilisation. The spike in government borrowings from banks has worsened the flow of credit to the private sector.
The growth of the flow of loans to the private sector slowed to 11.32 percent in the fiscal year 2018-19 against a target of 16.5.
Currently, banks are facing a liquidity crunch. This is mostly due to banks holding large amounts of non-performing loans (NPL).
NPLs accounted for 11.69 percent of total outstanding loans last June and many of these are due to willful defaulters.
According to a recent report of the World Economic League Table (WELT) 2020, London-based Centre for Economics and Business Research (CEBR), Bangladesh's economy will make one of the biggest jumps between 2020 and 2034 on the back of demographic dividend and rising per capita income.
The report said Bangladesh's economy will outshine the economy of Malaysia, Hong Kong and Singapore with its presence as the 30th largest economy in the world by 2024.
Bangladesh's economy will further climb from the 40th place in the World Economic League Table in 2020 to 26th and 25th position respectively by 2029 and 2034.