Bangladesh has stood out for its resilient economy, which grew by more than 17% in three years despite a global pandemic and the economic shocks which have gripped so much of the world. International banker Benjamin Hung, who’s chief executive of Standard Chartered for Asia, was in the capital Dhaka recently to take a closer look at what’s being achieved in what he called “an oasis of growth.Bangladesh strikes me as a country of immense opportunities. It is weathering a period of heightened external pressure and economic headwinds that have impacted many economies. With economic growth trajectory remaining stable and with the mitigatory effects of policy actions being visible, it seems that Bangladesh remains on course to achieve sustainable growth.
Bangladesh made a rapid recovery from the COVID-19 pandemic supported by prudent macroeconomic policies. But, the economy now faces considerable challenges with global economic uncertainty, rising inflationary pressure, energy shortages, a balance-of-payments deficit, and a revenue shortfall. Rising commodity prices and a surge in imports in the second half of FY22 resulted in a Balance of Payments (BoP) deficit and accelerating inflation. To achieve its vision of attaining upper middle-income status by 2031, Bangladesh needs to create jobs through a competitive business environment, increase human capital and build a skilled labor force, build efficient infrastructure, and establish a policy environment that attracts private investment.
Development priorities include diversifying exports beyond the RMG sector; deepening the financial sector; making urbanization more sustainable and strengthening public institutions, including fiscal reforms to generate more domestic revenue for development. Addressing infrastructure gaps would accelerate growth. Addressing vulnerability to climate change and natural disasters will help Bangladesh to continue to build resilience to future shocks. Pivoting towards green growth would support the sustainability of development outcomes for the next generation.