Bangladesh ranked world’s 6th least expensive economy

Ahead by only 1.4 points, the neighbouring country India ranked 171 with Pakistan falling behind to number 176 with a score of 36.4 points

Bangladesh has been ranked 172nd expensive economy out of 177 countries, according to a new World Bank report released yesterday.

The country scored 40.3 on the Price Level Indexes (PLIs) whereas the most expensive economy scored 209.6 based on the ratio of nominal expenditures to real expenditures in terms of US dollar.

Ahead by only 1.4 points, the neighbouring country India ranked 171 with Pakistan falling behind to number 176 with a score of 36.4 points.

Economies falling at the bottom of the PLIs are the ones with the lowest prices, still having a gross domestic product (GDP) per capita among the smallest in the world even though the purchasing power parity-based (PPP) real expenditures are more than double the exchange rate–based nominal expenditures within these countries.

PPP is the measure of an identical goods in different economies using the same currency to observe how much more expensive is the same elsewhere in the world.

Apart from PLIs, the report also mentioned Bangladesh being the 144th position in a ranking by PPP-based GDP per capita, meaning per citizen of the country.

According to World Bank data, Bangladesh had a GDP per capital of $731.9 in 2011 while PPP-based GDP per capital was around $2,000 during the same year.

Compared to the last time the research was done in 2005, middle-income countries gained a bigger share of the world economy at the expense of both high and low-income peers.

The report said: “Middle income economies’ share of global GDP is 48% when using PPPs and 32% when using exchange rates.”

Such phenomenon is seen in the economies, whose linkage to the global trade is not at its most fluent and therefore the gap between PPP-based and currency-based GDP per capital differs significantly, said Shahidul Islam, a chartered financial analyst and CEO of VIPB Asset Management Co Ltd.

According to the ranking, products in India are generally more expensive than in Bangladesh while cheaper in Pakistan.

The International Comparison Program (ICP), the world’s largest statistical initiative has released new data yesterday, showing the world economy produced goods and services worth over $90tn in 2011 based on PPP which was $70tn if measured by exchange rates, out of which, Bangladesh has contributed $111.88bn.

Almost half the world’s $90.6tn in total economic output in 2011 came from low- and middle-income countries, the World Bank said.

Switzerland and Norway are the world’s most expensive economies, followed by Bermuda, Australia and Denmark.

The economies with the lowest prices are Egypt, Pakistan, Myanmar, Ethiopia and Laos, according to the review of economic data, which seeks to compensate for exchange rate effects and measure spending power across countries.

Source: Dhaka Tribune


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