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Friday, 8 March 2013

Bangladesh outpaces neighbours in economic growth

Bangladesh outpaces neighbours in economic growth

Although economic downturn has impacted much of South Asia, Bangladeshis continue to enjoy greater purchasing power and tangible improvements in their quality of life.
Twenty years ago it was not so easy to buy a quality shirt in Dhaka. They were available in only a few shopping areas, recalls Rizwan Sharif, 32, a senior lecturer at University of Liberal Arts Bangladesh (ULAB) in Dhaka. The situation today, however, is much improved.

"Now, due to the presence of numerous fashion houses, you can find good quality apparel products all over the city. This is possible due to increasing purchasing powers of the common people," he told Khabar South Asia.

The wider availability of quality shirts is just one of the many positive signs of a growing economy.

"Due to economic growth, you can see the latest mobile handsets, tablets and other devices in the hands of most people," Sharif said. Market conditions are similar to those "in most developed countries around the world," he added.

In fact, when it comes to growth, Bangladesh is outpacing many of its neighbours. A recent UN study reported that Bangladesh's economic growth in 2012 was second only to Sri Lanka's in the entire South Asian region, outdoing economies like India, Nepal, Pakistan and Iran.

The study also anticipated growth in Bangladesh to continue over the next two years.

Amid slackening growth, a strong performer

Unveiled on January 17 in seven cities across the world, the UN World Economic Situation and Prospects (WESP) 2013 report had sobering news for the region as a whole, though it also contained room for cautious optimism.

It found that economic growth in South Asia fell to its slowest pace in a decade during 2012, but is likely to rebound slowly over the coming years.

"Persistent high inflation, political uncertainties, and transport and energy constraints weighed on household consumption and business investment," the UN said in a statement. "At the same time, the exports of most countries in the region were hit by the slowdown in developed and emerging economies," it said.

The report put 2012 growth at 4.4%, compared to 5.8% in 2011. However, it predicted the number would rise to 5% this year, followed by 5.7% in 2014. Bangladesh's rate of Gross Domestic Product (GDP) expansion slowed by .5% during 2012, but the country remained one of the region's top performers.

At 6.2%, it trailed only Sri Lanka (6.5%) in South Asian GDP growth, outpacing India (5.5%), Nepal (4%), Pakistan (3.8%) and Iran (-1.9%).

Economic expansion in both Sri Lanka and Bangladesh was based on strong growth in private investment and consumption and a steady increase in worker remittances sent from abroad, the report said.

Do all share in the growth?

Business professionals in Dhaka acknowledged the trend and its impact. "The income of people has risen by two-to-three times over the past few years," businessman Shamim Kawser told Khabar. A Tk 6,000 ($110.68) salary in 2006 would now be Tk 18,000 ($332), he said.

But Nayan Islam, who works at an event management firm in Dhaka, said rising prices have prevented many common people from enjoying an increased standard of living, despite the growth of paycheques.

Shortfalls in agricultural production, energy price adjustments and the rising demands of consumers with higher incomes have driven inflation in recent years, said Zaid Bakht, research director of Bangladesh Institute of Development Studies, an independent think tank.

But overall, the economic picture is bright for people of all income levels, he said, adding, "Economic growth is extremely pro-poor as it reduces poverty by increasing employment opportunities."

The UN WESP report forecast that Bangladesh would continue to enjoy steady growth at 6.3% and 6.4% in 2013 and 2014 respectively.