Bangladesh flag Bangladesh: Economic outline

Economic Outline

Economic Indicators

Bangladesh recorded one of the fastest growth rates in the world in the past few years, with stable economic performance that has helped to reduce poverty and social inequalities. However, the Bangladesh economy has faced numerous shocks, including disruptions stemming from Russia's conflict in Ukraine and global monetary tightening, which have disrupted a robust post-pandemic rebound, leading to a slowdown in real GDP growth to 6% in FY23, from 7.1% one year earlier. Projected to persist at 6% in FY24 and accelerate to 6.6% the following year, real GDP growth relies on relatively resilient exports, despite subdued private demand (IMF).

The fiscal stance is expected to maintain neutrality, with a fiscal deficit of 4.6% of GDP in FY24, which remains largely unchanged from FY23. The current account deficit is anticipated to remain compressed at around ¾% of GDP in FY24, while improvements are expected in the financial account, including timely repatriation of export proceeds. Foreign exchange reserves are forecasted to gradually increase in the near term and are projected to cover about four months of prospective imports in the medium term. Nonetheless, uncertainties surrounding the outlook remain significant, with risks leaning towards the downside. The IMF estimated the country’s debt-to-GDP ratio at 39.4% in 2023, up from 37.9% one year earlier, with a stable outlook over the forecast horizon (39.9% in 2025).
Headline inflation hit a decade high at 9.9% year-on-year in August 2023, averaging 9% throughout the year. Inflation is expected to ease to 7¼ percent year-on-year by the end of FY24, although the moderation will be gradual due to heightened inflation expectations. Bangladesh is one of the most vulnerable countries in the world to climate change, with extreme weather events estimated to have caused a loss of around 1.8% of GDP in the past few decades. The country has taken measures to promote green financing and is seeking grants from the international community, notably via the Green Climate Fund.

Bangladesh's unemployment rate was estimated at 4.3% in 2022 by the World Bank (latest data available). However, the informal sector is a very significant area of the economy and employment in Bangladesh, particularly for the less skilled people. Other social issues include constant social strikes, terrorist threats, limited access to capital by the population, and disputes over Teesta River water distribution with India. According to government data, the poverty rate in the country has been reduced from 41.5% in 2006 to 18.7% in 2022, and extreme poverty has gone from 25.1% to 5.6%.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 460.20446.35455.16511.79576.49
GDP (Constant Prices, Annual % Change) 7.16.06.06.67.1
GDP per Capita (USD) 2,7312,6212,6462,9463,286
General Government Gross Debt (in % of GDP) 37.939.439.739.940.5
Inflation Rate (%) n/a9.07.96.85.5
Current Account (billions USD) -18.64-3.33-3.68-13.64-17.06
Current Account (in % of GDP) -4.1-0.7-0.8-2.7-3.0

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Bangladesh Taka (BDT) - Average Annual Exchange Rate For 1 GHS 19.6718.4918.2016.1515.14

Source: World Bank, 2015

 

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Latest Update: April 2024