Bangladesh poised to become $500b economy by next fiscal year

Bangladesh is gunning to become a half-a-trillion-dollar economy next fiscal year buoyed by a successful vaccination campaign and a steady growth in agriculture and industry.

As per the finance division's projection, the size of the Bangladesh economy would be $510 billion in fiscal 2022-23 after growing at 10.7 percent.

The GDP is estimated to be $455 billion at the current price this fiscal year, up from $411 billion. The overall growth will reach 12.08 percent, according to the forecast, which was presented at the Fiscal Coordination Council meeting presided over by Finance Minister AHM Mustafa Kamal on Wednesday.

The projections did not factor in the Omicron variant of the coronavirus that is tearing through the globe and is rolling back the economic recovery made this year.

"People are spending money. Exports were good. The remittance flow was good except for the last few months. These are all symptoms of normalcy," said Selim Raihan, executive director of the South Asian Network on Economic Modelling.

The government had revised down the GDP growth last fiscal year.

"Since they brought down the growth, it is obvious that the GDP growth will take a leap in the current fiscal year," he said, adding that the neighbouring countries are also projecting high growth.

But there are some concerns.

The spread of Omicron in some countries of North America and Europe may affect the country's export sector.

"We hope that it does not become dreadful like the earlier [Delta] variant. However, we need to be watchful. Above all, I am hopeful that we will be able to attain the projected growth," Raihan added.

The production of crops, especially Aman and Boro, continued to grow like in the previous year, according to the finance division's presentation.

Crop production will increase 9.7 percent year-on-year to 472 lakh tonne in fiscal 2021-22, according to the Department of Agricultural Extension. In fiscal 2019-20, crop production was 430.35 lakh tonnes.

During economic transformation, agricultural growth slows down. But that was not the case in Bangladesh, even during the pandemic.

On the other hand, the overall production of medium and large industries saw 19 percent growth in August 2021. The growth rate was 4.38 percent in the last year.

Among others, the leather industry witnessed a giant 125.24 percent growth while the textile 29 percent and other non-metallic minerals 30.72 percent.

The state of the pandemic, as well as the ongoing vaccination campaign, were also discussed in the meeting.

The daily infection rate has dropped under five percent from October and no impact of Omicron is visible in the country.

As of December 21, more than 11.7 crore doses of vaccines were administered, according to a presentation of the finance division.

The finance division estimated Bangladesh's total population to be 169.8 million in 2020. About 41 percent of the total population and 63 percent of the population aged over 15 have received the vaccine for Covid-19.

So far, the government has secured 30 crore doses of vaccines and targets completing both doses by the first quarter of next year.

From December 19, the Directorate General of Health Services has begun booster doses. As of yesterday, 54 persons have received the booster shot.

The government aims to administer Pfizer as booster jabs, which will be procured for $250 million provided by the World Bank, according to finance division officials.