Bangladesh will be the second fastest-growing economy from among 46 countries next year, according to an annual economic outlook of Mastercard Economics Institute (MEI).

The country's real gross domestic product (GDP) is expected to grow 6.3 percent in 2024 whereas India's expected growth is 6.4 percent, the highest among the countries in the list.

Vietnam came in third with a projection of 6.2 percent.

The MEI released the "Economic Outlook: Balancing Prices & Priorities" for the coming year yesterday, outlining the watchouts that would define global growth.

However, the MEI's estimate is lower than the Bangladesh government's target of 7.5 percent for fiscal year 2023-24.

Earlier, International Monetary Fund (IMF) projected a 6 percent GDP growth while World Bank 5.6 percent.

In fiscal year 2022-23, the country's economy grew 6.03 percent, according to state data.

According to the MEI outlook, the Philippines' GDP is expected to grow 5.6 percent, the fourth highest, followed by Indonesia's 5.1 percent.

It also forecasted a 4.6 percent GDP growth for Mainland China and 4.5 percent for Malaysia.

According to the report, there is no one-size-fits-all story for the Asia Pacific region.

The macro picture is expected to be one of modest growth, largely on par with 2023 levels, as economies continue to stabilise while key drivers of growth, like exports and tourism, edge closer to pre-pandemic norms.

"Drilling down into individual economies, growth expectations are mixed across the region," it said.

On one end of the spectrum, Singapore, Malaysia, the Philippines, Thailand, Taiwan, and South Korea should see upticks while slowdowns are anticipated in Australia, the Chinese Mainland, Japan and New Zealand, said the MEI.

India and Indonesia are expected to hold largely steady at 2023 levels, it said.

Inflation to Persist

Meanwhile, Mastercard has projected a 7.3 percent consumer price inflation for Bangladesh in 2024, the fourth highest among 48 countries and highest among South Asian countries.

Earlier, Bangladesh set a 6 percent inflation target for 2023-24 while the IMF projected 7.25 percent. The country's Consumer Price Index recorded 9.02 percent in 2022-23.

The EMI predicted the highest 156.9 percent inflation for Argentina while 53.3 percent and 24.9 percent for Turkey and Egypt, the second and third highest respectively.

Sri Lanka's inflation is projected to stand at 6.9 percent, the fifth highest in the world and second highest in South Asian. India's inflation is expected to be at 4.5 percent in 2024.

More Discretionary Spending

Consumers across the Asia Pacific region are likely to spend more on discretionary items such as travel and entertainment in 2024, according to the MEI.

As the economic ripple effects of the pandemic subside in 2024, Asia Pacific consumers should be able to allocate a larger share of their wallets to discretionary spending, it said.

This is in stark contrast to 2022 and 2023, two years marked by high inflation that caused essentials like groceries and fuel to take up a larger percentage of household budgets, leaving less money left over for "wants" or extras.

Mastercard Chief Economist for Asia Pacific David Mann said, "2024 is set to be a year of recalibration as consumers rebalance their wallets. And what the data shows is that people remain eager to travel and dine out, although levels vary from market to market."

Signifying another shift in demand, consumers across Asia Pacific are expected to spend more on goods than they did in 2023, said a Mastercard press release.

"This marks the start of a new cycle that will see growth rates for goods rebounding to pre-pandemic levels, reversing the 2022-2023 trend that saw consumers prioritising key 'out-and-about' services such as dining and 'revenge' travel as economies re-opened post-pandemic," it said.

In 2024, the rising demand for goods, such as household items and clothing, is expected to resuscitate the Asia Pacific manufacturing sector, which plays a crucial role in the global economy, it said.

"This shift will drive a convergence in performance between the manufacturing and services sectors in the region which trended in opposite directions as manufacturing lagged and services boomed in 2023," Mastercard said.