1. Will Bangladesh have only 4.1% GDP growth rate in 2026?
Iffat Anjum
Senior Research Associate, SANEM

2. Harvard University CID New Growth Projections
More diversified and complex economies will grow the fastest in the coming decade.
Emerging markets are expected to outpace the growth of advanced economies.
The new decade will see poor countries converging and catching up with rich countries (conditional convergence theory). But not all poor countries.

3. Harvard University CID New Growth Projections
Low income countries that lack in diversification embedded in their exports will continue to be stuck with low incomes.
What matters most is policy prioritization to facilitate introduction of new productive sectors in the economy by taking advantage of existing productive know-how.
Southeast Asian countries will dominate global growth scenario, driven by the diversification of economies into complex manufacturing.
Sub-Saharan African countries- growth driven significantly by population growth, and also by labor shifting out of agriculture to manufacturing sector, resulting into more diversified export basket.

4. Top 10 Fastest Growing Economies to 2026
Rank
Country
Projected Annual Growth (%) 1
India
7.89 2
Uganda
7.46 3
Egypt
6.63 4
Tanzania
6.15 5
Indonesia
6.13 6
Kyrgyzstan
6.04 7
Pakistan
5.99 8
Vietnam
5.89 9
Mali 10
Kenya
5.87

5. Prediction for Selected South Asian and Southeast Asian Countries
Rank
Country
Projected Annual Growth (%) 1
India
7.89 5
Indonesia
6.13 7
Pakistan
5.99 8
Vietnam
5.89 11
Philippines
5.75 19
Thailand
5.15 23
Malaysia
4.97 37
Cambodia
4.64 40
Sri Lanka
4.5 53
Bangladesh
4.08

6. Country Complexity Ranking
ECI value 1
Japan
2.26 2
Switzerland
2.17 3
Korea
2.03 4
Germany
2.01 5
Singapore
1.89 6
Austria
1.74 7
Czech Republic
1.71 8
Sweden
1.65 9
Finland
1.57 10
USA
1.55
A measure of the knowledge in a society as expressed in the products it makes, calculated based on the diversity of exports a country produces, and the number of countries able to produce them.
China (18th), Malaysia (22nd), Thailand (27th), India (49th), Vietnam (56th), Uganda (75th), Pakistan (93rd), Bangladesh (101st).
ECI was found to predict growth with five times greater accuracy than the Global Competitiveness Index of the World Economic Forum.

7. Calculating Complexity
The Harvard CID researchers examine two characteristics of a country’s productive output to determine its Economic Complexity Index:
Diversity of a country
Ubiquity of a product
Complexity Opportunity Index (COI): Captures how well positioned is a country to increase their level of complexity.

8. Five Economies to Watch: What are they doing right?
India
China
Uganda
Vietnam
Mexico

9. What did Bangladesh Export between 1996 and 2016?

10. Export Diversification: Comparison between Bangladesh and Vietnam

11. Export Concentration Intensifying

12. Drivers of Growth in Bangladesh
Bangladesh’s growth is mostly driven by investment and exports.
The most important determinant of growth in Bangladesh has been capital accumulation (World Bank 2012; World Bank 2007).
Expansion of labor force and investment in human capital have contributed to growth.
TFP growth played a positive role in the growth effort during , especially during (World Bank 2012).

13. Capital Accumulation
The investment rate expanded from 10% of GDP in the 1970s to % in This accumulation of capital has been one of the key drivers of growth in Bangladesh so far.
Sluggish private sector investment in the recent years are cause for concern.

14. Role of Labor Force
On an average the labor force has grown by 2.9% per year between and 2010, as compared with a population growth rate of 2.1%.
-Decline in dependency ratio
-Increase in FLFPR (from 12% in 1989 to 33.5% in )

15. Role of TFP
Research shows an increased contribution of TFP growth to Bangladesh’s GDP growth, particularly since the onset of broad-based economic reforms since 1990.
One important factor that is likely to have contributed to TFP growth is the increase in competition resulting from broad-based market oriented economic reforms involving investment deregulation and trade openness.

16. Remittance Inflow
Remittance inflows grew slowly in the 1990s but then gained momentum in the 2000s. In FY2014 official remittances stood at US$ 14.3 billion.
Declining remittance in recent years.

17. Bangladesh in Global Competitiveness Index
Country
GCI Ranking
Malaysia 23
China 27
Thailand 32
Indonesia 36
India 40
Vietnam 55
Philippins 56
Bhutan 82
Sri Lanka 85
Nepal 88
Bangladesh 99
Pakistan
115

18. Way Forward
Improving business environment to attract greater FDI and private sector investment.
Increasing efficiency of public spending.
Increased investment in human capital (education, health).
Increasing export diversification by appropriate policy support.
Policy prioritization to facilitate introduction of new productive sectors in the economy by taking advantage of existing productive know-how.

19. References:
New Global Growth Projections by Center for International development, Harvard Kennedy University:
7th Five Year Plan of Bangladesh
Global Competitiveness Report 2017, World Economic Forum.
Ahmed, S., Searching for Sources of Growth in Bangladesh, June, 2014, First Bangladesh Economists’ Forum Conference.

20. Thank you