Overview of Bangladesh Economy

With a continued average economic growth nearly 7% in the last ten years (2008-2018), 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 the impressive economic status. In FY 2017-18, GDP growth was 7.86 % and it is expected to grow around 8.25% in the FY 2018-19. 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 largest economy in the world in terms of nominal GDP in 2017 and 32th in terms of purchasing power parity. The country registered a gross domestic product of US$ 274 billion in FY 2017-18 while it was only US$72 billion in 2005-2006. RMG is the main item of export of Bangladesh surpassed US$34 billion in 2017-2018 and accounts to 83% of total exports. Remittances sent by Bangladeshi expatriates totalled US$15 billion in 2017-18 financial year, also forms a very important pillar of the country’s economy. The Foreign Exchange Reserve was US$ 32.94 billion in FY 2017-18.

Bangladesh experienced a satisfactory FDI in last five years. World Investment Report 2017 ranked Bangladesh 16th among 74 FDI-recipient countries with a record US$ 2.34 billion FDI inflow in 2017. This is the third time Bangladesh’s FDI has exceeded the billion-dollar mark in a single year. Standard & Poors latest credit rating for Bangladesh stands at BB-. Moody’s rating for Bangladesh sovereign debt is Ba3. The transfer and convertibility (T&C) assessment remains ‘BB-‘.

 

Bangladesh Government’s twin policy initiatives--‘Vision 2021’ and ‘Digital Bangladesh’ envisage Bangladesh becoming 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 30 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 US $ 1,752 in 2018 (in real terms). In Bangladesh, a strong middle class is close to 18 % of the entire population. Due to 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, light and medium industries, IT and shipbuilding. While world trade was severely disrupted by the global recession in recent past with exports of most countries declining sharply, the export of Bangladesh shows satisfactory growth. Bangladesh has emerged as the second largest exporter in the world apparel market and is also doing exceedingly well in the exports of finished leathers and leather goods, frozen foods, jute and jute goods, pharmaceutical products, light engineering products and small ocean-going vessels. In 2017-18, Bangladesh posted US$ 40.2 billion export earnings, while at the corresponding periods the country registered import bills of US$ 44.5 billion. Most of the items in the import list are petroleum products, capital goods and industrial raw materials.

Bangladesh has also attained a satisfactory foreign currency reserves in recent months which stands at US$33.41billion in the fiscal year 2017-2018.