Bangladesh should set its sights on becoming an upper middle-income country by 2030 and a developed economy by 2050, said the central bank governor.
The country is set to earn the status as a lower middle income nation in a couple of years, he said.
“Bangladesh is poised to cross the (lower) middle income country group GNI threshold in a couple of years. Time is now therefore to chart the next phase of its progress path,” said Atiur Rahman, governor of Bangladesh Bank.
He spoke while giving a lecture on “recent socio-economic trends and prospects in Bangladesh: stability supportive use of inclusive financing” in London on Friday.
Rahman said Bangladesh has two of the most important requisites: the demographic dividend of a large youthful work force and a broad-based social consensus on social responsibility driven inclusive development strategy to harness the creative energy of the people in overcoming challenges on path of rapid poverty eradication and eventual prosperity.
While the population growth is now 1.5 percent per year, the working age population is growing at 2.5-2.8 percent, the BB chief said, adding that the growing working age population widens the opportunity for rapid development.
The governor said the central bank’s caution-mixed inclusive financing promotion initiatives are serving the economy well, as evidenced by stable, steady economic growth amid the global financial crisis and the lingering global growth slowdown.
“Unlike elsewhere including advanced economies, credit flows for output activities of SMEs in Bangladesh held steady and did not suffer exclusion crunch during or following the global financial crisis, upholding internal demand and output activities on steady long-run growth path,” he said.
He said steadily growing but still a low income economy, Bangladesh has over the years developed a social consensus for inclusive socioeconomic growth equitably opening up advancement opportunities for all population segments.
To this end, Rahman said, annual national budgets consistently allocate substantial expenditure outlays in the social sector for pro-poor human development and social safety net to unleash the creative energies of the entire population.
Besides, expenditure for infrastructure and other areas promoting enabling environment for private sector-driven rapid growth has also gone up, he said.
Rahman said the central bank has been supporting the government’s inclusive growth efforts by promoting inclusive financing of all productive initiatives including those of the traditionally underserved farm and non-farm small and medium enterprises and other innovative niche area entrepreneurs.
Its inclusive financing promotion takes place within the overall monetary growth envelop of monetary programmes designed to maintain price stability and macro-financial stability.
“Attention of the inclusive financing initiatives on adequacy of credit flows to SMEs helps enhance macro-financial stability, with incremental output on the supply side and employment and income generation on the demand side,” he said.
Rahman said the healthy macroeconomic trends upholding the BB- and Ba3 sovereign credit ratings with stable outlook, for four successive years by S&P and Moody’s respectively is well-supported by robust improvement in all other key macroeconomic indicators.
The estimated size of gross domestic product (GDP) in FY13 stood at about $128.8 billion from only $47.1 billion in FY2000, while GNI per capita increased by about 245 percent to $923 in FY13 from only $377 in FY2000.
At the end of June 2013, the amount of international reserves is expected to stand at around $15 billion, which would be more than four months imports equivalent.
Government debt, budget deficit and investment as a percent of GDP are expected to reach at 37.2, 4.8 and 26.8 percent respectively at the end of this month from 46.4, 6.1 and 23 percent respectively at the end of June 2000.
Rahman said there are a few other priorities Bangladesh needs to take care of to help the country achieve higher economic growth.