Bangladesh is among the top five fastest growing economies in the world, the World Bank has said.
The report titled 'The Bangladesh Development Update April 2019: Towards Regulatory Predictability', published Thursday, said this growth, despite of insufficient private sector investment, has been attributed to stable macro and export-oriented industry-led growth.
"Overall, the economy is moving forward, growing at a decent pace by Bangladesh's own historical as well as international standards. Growth on the supply side in FY17 was driven by services and industry which accounted for 3.4 percentage point out of the officially estimated 7.3 percent GDP growth," it said in the report.
Bangladesh needs a revamped national accounts system, it advised adding, "Even if a revamped system lowers GDP growth from 7.3 percent to say 6.8 percent or even 6 percent in the last two years, Bangladesh will still be among the fastest growing countries in the world."
Despite many flaws, it is performing decently in a lackluster world economy. Incomes are certainly increasing, though not as rapidly as one would infer from official growth statistics, it added.
The report revealed the growth was caused by manufacturing, construction and a bumper crop harvest, coupled with private consumption, remittance and rural income growth.
The report added that regulatory predictability will drive the growth further up.
"Domestic demand growth appears to have been the driving force with private consumption contributing 4.7 percentage points and investment contributing 3.25 percentage points. Weak exports and strong imports dragged growth in FY17. Private investment stagnated as a percentage of GDP," it said.
The industries sector grew at double digit (10.2 percent) in FY17 with significant contribution from the 11 Percent growth in large and medium scale manufacturing industries, it said in the report.
"Services had a better year with growth rising from 6.25 percent in FY16 to 6.7 percent in FY17. Services growth was driven by wholesale and retail trade, transport and hotel and restaurants. Export of services grew by 10.8 percent in nominal dollars in FY17, compared with a 2.6 percent decline in FY16. Service export growth increased to 14.1 percent in the first half of FY18, compared to the same period a year earlier," it added.
Remittance flow recovered impressively, growing 16.5 percent in the first eight months of FY18, following successive declines in two previous years, it said.