The dream of Bangladesh becoming a middle-income country (MIC) by 2021 has faded following a lower-than-projected performance of the economy and some other major economic indicators in recent years, development analysts said Saturday.
They said it would be difficult for the country to become a MIC as its gross domestic product (GDP) growth and some other indicators have been showing a weak performance against the targets set in the Perspective Plan- 2021.
Since the financial year (FY) 2011-12, Bangladesh's GDP growth has been consistently falling short of the targets after an impressive performance in the FY2011.
In FY2010-11, the country's economy expanded at a rate of 6.7 per cent.
It started to decline from the FY 2012 when the growth rate was 6.2 per cent against the target of 7.0 per cent, followed by 6.0 per cent in FY2013 against the target of 7.2 per cent set in the perspective plan 2021.
In the perspective plan, the projected growth of the economy has been set at 7.6 per cent for the current FY2014. But the target in all probability will not be achieved, the analysts said.
"In the previous two consecutive years, the GDP growth rate recorded a fall. In the current fiscal, the rate is likely to fall further making in almost impossible to achieve the MIC status by 2021," said Dr. Mirza Azizul Islam, former finance and planning adviser of the caretaker government.
He said, "The economy will require large-scale public and private sector investments in the coming years to compensate for the lower-than-expected economic growth in the previous years. But the private sector investment until now has been poor. So, it will be impossible for Bangladesh to achieve the middle income country status by 2021."
According to Perspective Plan, the country's gross investment is required to go up to 31 per cent of the GDP. The investment is now hovering at around 25 per cent over the last few years.
On the other hand, the remittances and exports have been affected and ready-made garment (RMG) is having a hard time. All these are not anyway a good omen for the economy, he told the FE.
Dr. Ahsan H. Mansur, Executive Director of the Policy Research Institute (PRI), told the FE that in terms of per capita income the country might graduate to MIC by 2021. "But the situation may not be comfortable for it as a MIC country. It could be a lower-tier MIC", he said.
"The current rate of economic growth is less than the projections made in the Perspective Plan. So, the target of transforming the country into a MIC with high income will be difficult to achieve within the year 2021," he added.
General Economic Division (GED) chief Professor Shamsul Alam, however, is optimistic about the graduation of Bangladesh's economy to the MIC status by 2021 as he sees good days within next few months.
"I hope the export will pick up, private sector will come up with more investments getting out of their current cautious approach. The remittance will also rise within next six months," he told the FE.
Prof Alam however said, "The GDP growth in the current fiscal will also be lower. But I am hopeful that the economic growth will pick up from the next fiscal overcoming all the setbacks in last few years."
Meanwhile, the World Bank, Asian Development Bank and the International Monetary Fund in their latest economic review reports have projected the Bangladesh's GDP growth at less than 6.0 per cent in the current fiscal.
The WB in its latest development update has shown that the weaker investment scenario and the impact on the major export earner -- RMG -- could hamper Bangladesh's economic growth.
Country\\\'s graduation to middle income status by 2021 unlikely
FHM Humayan Kabir | Published: May 05, 2014 00:00:00 | Updated: November 30, 2025 06:01:00
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