Bangladesh is currently the standout South Asian economy in terms of growth, shows the Asian Development Bank’s latest economic outlook update. As the charts show, Bangladesh has been seeing high and consistently rising growth rates, while its levels of inflation have remained stable.
Since 2016, Bangladesh has been growing at 7%-plus every year, and its growth is likely to cross the 8% mark both in this and the coming year, according to the report. Over this same period, India has seen a secular decline in growth rates, even though an uptick is expected in the coming year.
Sri Lanka has been the worst performing South Asian economy in terms of growth, according to the report. The South Asia average has been falling since 2016, mainly on account of the poor performance of the Sri Lankan and Pakistani economies.
The performance of the Bangladeshi economy has been boosted by a booming industrial sector, which leads to significant job creation. This is different from the situation in India, where the bulk of the population is stuck in the agriculture sector (which contributes the least to the GDP), and services is the major growth engine. Bangladesh’s robust domestic industry has ensured that the country’s exports have grown from 6.7% in 2018 to 10.1% in 2019.
“Growth in garment exports rose from 8.8% to 11.5%, reflecting strong demand from the US and newer markets… like Australia, Canada, India, Japan, the People’s Republic of China, and the Republic of Korea,” says the ADB report. Garments accounted for 84.2% of exports, the report says.