Bangladesh’s per capita income will breeze past India’s by 2020, provided the country’s economy continues to deliver market beating growth statistics.
In order to overtake its larger neighbour, Bangladesh will have to hold the GNI and GDP lead it has maintained over India in recent years.
Bangladesh has already outperformed India in social indicators such as child mortality rate, gender equality, and life expectancy.
According to data from the United Nations Conference on Trade and Development, Bangladesh’s per capita income went up by 39.11% to $1,355 in 2016 from $974 in 2013. Meanwhile, India’s per capita income moved up by 13.80% to $1,706 and Pakistan saw 20.62% growth to $1,462 over the same period.
In the three years from 2013-2016, Bangladesh’s gross domestic product (at current prices) in dollar terms grew at a compounded annual rate (CAGR) of 12.9%, more than double the 5.6% by India.
Bangladesh’s GDP has been showing steady growth in recent years. In the last fiscal year, Bangladesh witnessed a 7.28% growth in GDP, according to the Bangladesh Bureau of Statistics (BBS).
In the budget for FY2018-19, Bangladesh is reportedly going to set a GDP growth target of 7.5%.
Considering Bangladesh maintains the same growth gap in Gross National Income (GNI) and GDP with India, the country will overtake its larger neighbour in terms of per capita income by 2020, Centre for Policy Dialogue Research Director Khondaker Golam Moazzem told the Dhaka Tribune.
An advantage for Bangladesh is that its economy has been doing well in recent times and growth may remain the same, the economist said.
He added that while the future is bright for the country, the Bangladesh government should focus on employment generation to further increase per capita income.
He also urged the government to ensure a business friendly atmosphere in order to increase private sector investment .
The manufacturing industry, especially the country’s $28 billion RMG sector, has been one of the heaviest contributors to Bangladesh’s economic development.
The RMG sector has benefited from China shifting its business focus towards more hi-tech and value added products due to increases in labour costs. According to a World Bank study, a 1% apparel price increase in China would create 1.36% additional demand for Bangladeshi products.
Efforts to reduce child marriage, as well as increasing access to education, and financial inclusion for women, also played a role.
Furthermore, the completion of mega projects, such as the Padma Bridge and the Dhaka-Chittagong highway, in the coming years is also set to give Bangladesh’s economy a boost.
The government has also made it a priority to set up a number of Special Economic Zones across the country in an effort to boost investment.
A key driver of economic growth in Bangladesh is its young population and the government’s efforts to engage them in information technology. The government has already established a
Hi-Tech Park dedicated for the ICT sector. ( Subrangindia )