The Asian Development Bank (ADB) expects the Bangladesh economy to grow at 8.0 per cent during the current fiscal.
The growth will be the highest in the Asia-Pacific region.
"Bangladesh has emerged as one of the main forces in the Asia-Pacific region to improve the economic growth of this region," said ADB country director in Bangladesh Manmohan Parkash.
The growth rate has surpassed even that of India and China, he said.
He was speaking to reporters at the launch of Asian Development Outlook Update 2019 on Wednesday at the Dhaka office of the ADB.
According to the report, Bangladesh has the highest growth prospect during the fiscal year 2020 too as the growth forecast for India and China has been lowered to 7.2 per cent and 5.4 per cent respectively.
The country's gross domestic product (GDP) growth was also estimated at the highest rate at 8.1 per cent in the last FY2019 compared to 6.5 per cent and 5.5 per cent for India and China respectively.
"The GDP growth of almost all countries is on a declining trend, but it is on a rising trend in Bangladesh, Mr Parkash said.
Buoyant exports, robust private consumption, ongoing reform to improve the cost of doing business including the establishment of a one-stop service for private investment, and stepped up budget spending, especially to develop the infrastructure are the among drivers of the growth, the ADB said.
The ADB Update, however, said inflation is likely to accelerate to 5.8 per cent in FY'20 due to upward adjustments of domestic natural gas tariffs, expansion of value added tax (VAT) net, and depreciation of local currency.
The ADB country chief said Bangladesh's governance will have to be improved to enhance its economic growth and development.
"The current drive against corruption is a good gesture of the government. Improving your (country's) governance will facilitate your development further," he added.
Mr Parkash said although Bangladesh is doing well, it has some downside risks including skill development, establishing a robust financial sector and easing the cost of doing business.
He also suggested urban-rural connections to grow the economy at a sustainable rate.
"Only the growth of Dhaka and Chittagong city is not enough for the country. The country needs to develop some other cities as those can contribute to the economic enhancement," he said.
Asked about the vulnerable banking sector, the ADB country director said the government's actions are not enough as it needs more reforms to build the confidence of the investors in the financial sector.
"When your financial sector will be able to establish its own confidence among the investors, the local and foreign investment will rise automatically," he added.
Mr Parkash suggested Bangladesh utilise the trade-war benefits between the US and China through developing its skilled manpower, ensuring better business climate, attracting more investments, and diversifying export baskets.
For example, if Bangladesh can develop skill of its migrant workers, its remittance can grow to even US$100 billion from the current $16.4 billion, he noted.
The ADB official said Vietnam has benefited most from the ongoing US-China trade-war as it has tapped 33.4 per cent of the trade redirection benefit due to its product diversification.
However, Bangladesh's benefit was 13.4 per cent concentrated on a single product, Mr Parkash said.
ADB senior economist Soon Chan Hong quoting the report said despite global economic slowing, export growth is expected to be strong at 10 per cent in FY2020 as Bangladesh benefits from trade redirection caused by US-China trade tensions.
"Exports to newly penetrated markets are expected to rise further. Exports should benefit as well from government efforts to improve the investment climate by reducing the cost of doing business."
Still, import growth will be substantially higher than in FY2019 as the implementation of large infrastructure projects picks up and boosts imports of capital equipment and raw materials, the report said.
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