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Bangladesh's Economic Rise: A Story of Resilience and Progress
- By Naveed Al Razi -- 6 minutes read --
- Dec 14, 23
" A Brief Introduction to Bangladesh’s Economic Growth and How Bangladesh is Progressing in Emerging Markets "
In the realm of emerging markets, the story of Bangladesh's Economic Growth stands as a remarkable example of resilience and strategic development. Since gaining independence in 1971, Bangladesh has transitioned from being among the world’s poorest nations to achieving lower-middle-income status by 2015. This transformative journey showcases the power of focused policy-making and development strategies.
Bangladesh's Economic Growth Story
Over the past two decades, the narrative of Bangladesh's Economic Growth has been marked by impressive achievements. The country has capitalized on its demographic dividend, bolstered by robust exports from the ready-made garment (RMG) sector. Furthermore, remittances from the Bangladeshi diaspora have played a vital role in strengthening the economy. This, combined with a stable macroeconomic environment, has contributed significantly to the rapid pace of Bangladesh's Economic Growth, making it a model for other developing economies.
Poverty Reduction and Development
A cornerstone of Bangladesh's economy has been its extraordinary success in poverty reduction. The poverty rate has drastically fallen from 11.8 per cent in 2010 to just 5.0 per cent in 2022. This decline reflects the nation's efforts to uplift its citizens' living standards. Alongside, Bangladesh has seen improvements in human development, with better health, education, and overall quality of life for its people.
Future Growth and Challenges Ahead
The future of the economy of Bangladesh looks cautiously optimistic. Although a slowdown is expected in FY24 due to import suppression measures, the medium-term prospects are positive. This expected growth will be supported by easing inflation and improving external conditions, with a projected surplus in the balance of payments driven by financial and remittance inflows.
Despite these strides in Bangladesh's Economic Growth, the country faces challenges. The disparity between urban and rural areas is one such issue, alongside the hurdles posed by the COVID-19 pandemic. However, the resilience of Bangladesh is evident in its rapid recovery, with an estimated GDP growth of 6.0 per cent in FY23. Yet, to maintain this momentum, Bangladesh must address rising inflation, energy shortages, and fiscal deficits.
Bangladesh’s ambition to reach upper middle-income status by 2031 hinges on several critical factors. Creating jobs, enhancing human capital, improving infrastructure, and fostering an environment conducive to private investment is essential for sustaining Bangladesh's economic growth and ensuring long-term stability.
Development Priorities
To maintain its momentum, Bangladesh must focus on diversifying exports beyond the RMG sector, addressing financial sector vulnerabilities, promoting sustainable urbanization, and strengthening public institutions. Addressing infrastructure gaps and climate change vulnerabilities will also be crucial for resilience and sustainable development.
The economic journey of Bangladesh is a testament to the potential of strategic planning and dedication. Significant progress in poverty reduction and overall development has been made, but challenges remain. With a continued commitment to addressing these challenges, Bangladesh is well-positioned to achieve its goal of upper-middle-income status, serving as an inspiring model for other emerging economies worldwide.
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