$520b economy by next fiscal year
Bangladesh's gross domestic product is projected to surpass the $500 billion mark for the first time in the upcoming fiscal year contingent upon exchange rate stability.
In fiscal 2025-26, the nominal GDP is expected to reach Tk 62,44,578 crore at current prices, according to the finance ministry's projections.
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As per the provisional estimate by the Bangladesh Bureau of Statistics, the nominal GDP this fiscal year would be Tk 55,52,753 crore, which is about $462 billion using the exchange rate of Tk 120.29 per dollar.
If the exchange rate, which has been liberalised this month, remains between Tk 120 and Tk 123 in the next fiscal year, the GDP could reach $520 billion.
Currently, 45 out of 218 countries have a GDP exceeding $500 billion. Among them, seven countries have GDPs ranging between $500 billion and $600 billion.
"Whether our GDP will hit $500 billion depends on how much the taka depreciates against the dollar -- the dollar remains strong and our supply of dollar has increased, so it is unlikely that the taka would depreciate further here," said Zahid Hussain, a former lead economist of the World Bank's Dhaka office.
Therefore, it is possible that the GDP would hit the $500 billion mark. But several other factors will play a role.
The nominal GDP growth is estimated to be about 12.5 percent.
"It is achievable since it is not extraordinarily high," he added.
The GDP could reach the $500 billion mark if the calculation is done properly, said Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue.
"But has BBS made the back calculation based on the findings of the White Paper on the State of the Bangladesh Economy? The white paper identified flaws in the BBS's GDP growth estimates."
The BBS is calculating the GDP size based on the Household Expenditure Survey 2022.
"While the BBS has projected the growth rate correctly, questions remain regarding the base year used for calculating GDP size. We believe a new survey should be conducted to crystallise the GDP size. Only then we can truly say that we are a $500 billion economy," he added.
The finance ministry's projection of GDP size is based on the current economic reality, The Daily Star has learnt with people involved with the computation.
Foreign multilateral lenders such as the Asian Development Bank ADB, the World Bank and the International Monetary Fund have projected higher GDP growth in the coming years despite lowering the projections for fiscal 2024-25.
The finance ministry projected the economy to rebound with real GDP growth projected at 5.5 percent and inflation at 6.5 percent for the next fiscal year.
Along with the rising trend in exports and remittances, the overall volume of imports is expected to increase in the coming years.
In the first nine months of the fiscal year, imports rose by 6.38 percent, according to central bank statistics.
The finance ministry expects imports to rise 8 percent next fiscal year.
The government also projected that exports would grow at 10 percent in fiscal 2025-26, up from 9 percent in the revised budget for this year.
In the first nine months of the fiscal year, exports grew 9.45 percent, according to central bank data.
The remittance growth is projected to be 8 percent in fiscal 2025-26. In the first 10 months of this fiscal year, remittance inflows soared 28.3 percent year-on-year to $24.4 billion.
Although the private sector credit is still record low, it is expected to pick up in the next fiscal year.
If Bangladesh's GDP exceeds $500 billion, it could attract foreign investors, Hussain said.
"If an economy gets bigger, it boosts the confidence of investors. Besides, it will positively impact domestic revenue collection."
However, concerns remain over the reliability of the official statistics among foreign investors.
"This is because inflated figures and numbers were presented in the past and the current size of GDP is a continuation of that."
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