Bangladesh to become trillion dollar economy by 2040: BCG

Bangladesh is on course to emerge as a $1 trillion economy by 2040 at an average growth rate of 5 per cent, powered by a surge in middle and affluent consumers, an American consulting firm said in a study.

The global management consultant Boston Consulting Group (BCG) in its November report titled “The Trillion-Dollar Prize: Local Champions Leading the Way” said that the economy would rise to $1 trillion by 2030 with a growth rate of 10% or by 2040 with an even growth rate of 5%.

The forecast was disclosed through a report launching the program in the capital where Keynote Speaker of the program, Country Head of Corporate Commercial Banking, HSBC Bangladesh Riaz A Choudhury said that Bangladesh was the 42nd largest economy in the world in 2018 and will be 28th by 2030.

The current growth rate of the country’s economy for the last five years was 6.4% and even with 5% growth rate the economy would reach a trillion US dollars within 2040, he added.

According to the report, 57% of Bangladeshis believe the next generation will do better while the country has a young, growing workforce with a median age of 28 years and a 113 million working-age population ready to create value.  

The country has a high savings rate (34% for Bangladesh vs 27% globally) and low national debt (35% for Bangladesh; lowest amongst peers), it added.

The report forecast that the country will have fastest growing consumer market in the world over the next decade to become 9th largest consumer market globally by 2030,

The country has 650,000 freelancers; 2nd largest supplier of online labour globally (15% global share) and also the 2nd largest apparel exporter globally; the number of large companies (>USD200Mn revenue) grew from 10 in 2016 to 28 in 2021; 1200+ active start-ups receiving USD700Mn+ in funding; 8th largest mobile market in the world driven by private cos.

Riaz a Choudhury said that public spending on infrastructure quadrupled from BDT532Bn in 2012 to BDT2,236Bn by 2022.

The pharmaceuticals market value would reach US$ 6 billion by 2025 with a growth of 156% or more, he added.  

Through the report, 20 champions of the country have been mentioned. According to the report these companies are World’s largest nongovernmental organisation - Brac, top-tier lender Brac Bank, and mobile financial services giant Bkash, PHP, Shop, Pathao, Walton, Pran, Summit Group, pharmaceutical firms Square, Renata, Beximco, FCI, Meghna Group, Confidence Group are in the BCG’s case studies. Five companies denied disclosing their name so they were not included in the publication.

The report said that 78% of emerging champions who would lead the country to step into a one trillion economy strongly believe they must build a culture of continuous transformation. They are bold in ambition and their vision as 83% have an ambitious vision with 61% pursuing strategic international expansion on the path to establishing globally-recognized brands.

56% having social impact top-of-mind, while 40% building their own ecosystem through investing in end-to-end vertically integrated operations or partnering with a wide variety of stakeholders, he added saying 40% investing in building manufacturing centres close to consumption hubs.

Zarif Munir, managing director and senior partner of BCG Malaysia office said that Bangladesh has made dramatic progress in recent years.

These champions are looking for leapfrog. They never said about 5-10% growth. They are talking about how they can go to 150 countries, he added.

While talking about shareholder value for emerging champions backed by strong fundamental performance, supported by powerful businesses, Zarif said that there was a 12.6% annual shareholder return.

Zarif Munir said that as Bangladesh is not yet in global investors’ minds they are receiving fewer investors than could have been much more in reality.

Chief Guest of the program state minister for ICT division Zunaid Ahmed Palak urges the BCG to have their office in Dhaka as well.

In the program, Global Chairman of BCG Hans-Paul Burkner and some of the founders and CEOs of the champions and several other businessmen were also present.