An Analysis Of Bangladesh's Economic Development & Potentials

From the second half of the 20 th century,the center of world economic growth has quietly shifted from developed areas in Europe and the United States to the Asia-Pacific region.The countries in the Asia-Pacific region have continuously created the miracle of economic growth.As the youngest country in South Asia,Bangladesh gained independence from Pakistan in 1971.There are 160 million people,poor resources and multiple floods on the land of 140,000 square kilometers,making it the poorest and most catastrophic country in South Asia at the beginning of independence,it has also been the target of international aid.In recent years,the World Bank has raised Bangladesh from low-income countries to low-middle-income countries because its GNI has reached the standard for low-middle-income countries at $1010 since 2013.Bangladesh has maintained its economic growth above 6% since2011,and also,its economic growth rate has ranked among the fastest in the world.As an important node in the Indian Ocean,Bangladesh has a strategic status that can not be ignored in the “One Belt and one Road” initiative.Therefore,an objective analysis of the current situation of Bangladesh's economy and a reasonable forecast of its development prospects will help us to better analyze the future direction of its economy.This study has certain reference value for further economic cooperation between China and Bangladesh,based on the importance of its geographical location and geopolitics.This paper studies whether Bangladesh's economic growth is sustainable by analyzing the current situation,problems and driving forces of Bangladesh's economic growth.The first part is the status and the problem analysis.Firstly,analysis the current economic growth situation in Bangladesh based on industrial structure,trade status quo and investment;Secondly,analysis the status quo of current economic growth in Bangladesh combined with the four macroeconomic indicators of balance of payments,fiscal revenue and expenditure,unemployment rate andinflation;Thirdly,through the above analysis,it summarizes the problems of current economic growth in Bangladesh from four main aspects: industrial structure,trade,investment environment and employment.The second part is the empirical analysis.Firstly,analyzes the impact of various factors on the economic growth of Bangladesh through the econometric models,adopting the Cobb-Douglas Production Function Approach to separately estimate the contribution of capital,labor force and technological progress to Bangladesh's economic growth.Then,this paper measures the growth potential of Bangladesh's economic growth by two parts: long-term and short-term.In the short run,H-P filter and production function are used to measure the output gap between real output and potential output in Bangladesh over the past two decades so as to analyze whether there is a production gap or growth space in Bangladesh's economy in the short term.In the long run,we predict the output of Bangladesh's economy through VAR and ARIMA models and measure its economic growth rate over the next decade.The result shows that Bangladesh's economic growth rate will remain at a high level of 6% over the next ten years.The second part is prospect analysis.Faced with the problems of economic growth in Bangladesh at the present stage,the Bangladesh government took timely measures such as increasing infrastructure construction,further opening up the domestic market and optimizing relevant policies,which created a favorable internal environment for the sustained rapid economic growth in Bangladesh.At the same time,Bangladesh's active participation in regional and sub-regional cooperation organizations will provide a favorable external environment for the sustained and rapid economic growth of the country in the future.The basic conclusion of this paper is that Bangladesh possesses the potential of sustained and rapid economic growth and its major economic indicators are showing good momentum,For instance,overall fiscal revenue and expenditures are stable,foreign exchange reserves hit record highs,the industrial structure is continuously optimized and the degree of foreign dependence is at a balanced level,the technical level of the labor force is constantly improving and inflation is at a moderate level.Ofcourse,for a developing country such as Bangladesh,its economic growth is inevitably affected by non-economic factors such as politics factor.Whether the economy can maintain its steady growth in the future will bring both opportunities and challenges together.In addition,Bangladesh's active participation in the "BCIM " and the "BIMST" and other regional cooperation organizations can provide external opportunities for its sustained economic growth.