Overview of Bangladesh Economy

With a continued average economic growth nearly 7% in the last eleven years (2008-2019), Bangladesh now proudly stands as an emerging trade and investment destination. The steady growth in export business, hard-working labour force and committed entrepreneurs supported by the pro-business, pro-investment policies of the Government are leading Bangladesh towards the line of global business competency. The country’s unequivocal position for peace and harmony, regional stability, cooperation, economic development through international and regional trade with its trade partners and an increasing flow of remittance by expatriate Bangladeshis living across the world have helped the country achieve and retain an impressive economic status. In FY 2018-19, GDP growth was 8.15 %. A strong domestic demand, high export growth and continued expansion of infrastructural facilities attributed to the accomplishment of accelerated growth.

International Monetary Fund (IMF), in its World Economic Outlook, 2018, has ranked Bangladesh as the 44th the largest economy in the world in terms of nominal GDP in 2017 and 32nd in terms of purchasing power parity. The country registered a gross domestic product of US$ 302.6 billion in FY 2018-19 while it was only US$72 billion in 2005-2006. Ready Made Garment (RMG) is the main item of export of Bangladesh surpassed US$34 billion in 2018-2019 and accounts for 84.21% of total exports and RMG is providing employment of four million workers, eighty percent of them are female. Remittances sent by Bangladeshi expatriates totaled US$15 billion in the 2017-18 financial year, also forms a very important pillar of the country’s economy. The Foreign Exchange Reserve was US$ 32.94 billion in FY 2017-18.

Bangladesh experienced a satisfactory FDI in the last five years. World Investment Report 2017 ranked Bangladesh 16th among 74 FDI-recipient countries with a record US$ 2.65 billion FDI inflow in 2019. This is the fifth time Bangladesh’s FDI has exceeded the billion-dollar mark in a single year. 

Bangladesh Government’s twin policy initiatives--‘Vision 2021’ and ‘Digital Bangladesh’ envisage Bangladesh becoming a Middle-Income country by 2021 and a developed country by 2041. The World Bank upgraded Bangladesh a Lower Middle-Income country in 2015 and projected to be one of the top 24th economies in the world by 2030.  In the year 2018, the UN Committee on Development Policy (CDP) declared Bangladesh’s legibility for graduation from LDC to Developing country.

The real per capita income stands at the US $ 1,909 in 2019 (in real terms). In Bangladesh, a strong middle class is close to 18 % of the entire population. Due to the emerging middle class and in general better income level of common people, domestic demand is growing and that becomes an important driver of economic activity. Bangladesh has now emerged as an important manufacturing base for textile products, pharmaceuticals, finished leathers, jute and jute goods, light and medium industries, IT, light engineering products, and small ocean-going vessels. Bangladesh has emerged as the second-largest exporter in the world apparel market. In 2018-19, Bangladesh posted US$ 40.54 billion export earnings (fob), while at the corresponding periods the country registered import bills (CIF) of US$ 56.06 billion. Most of the items in the import list are petroleum products, capital goods, industrial raw materials, and agricultural goods.

Bangladesh has also attained satisfactory foreign currency reserves  which stood at US$ 32.71 billion in the fiscal year 2018-2019 and its remittances grew by 9.8 percent in this time reaching a record of US $16.4 billion.