Bangladesh flag Bangladesh: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Bangladesh recorded one of the fastest growth rates in the world in the past few years with a stable economic performance that has helped to reduce poverty and social inequalities. GDP growth reached 8.2% in 2019 and remained positive at 3.5% and 4.6% in 2020 and 2021 despite the international effect of the COVID-19 pandemic. It is forecasted to pick up to 6.5% in 2022 and 7.2% in 2023, according to the updated IMF forecasts from October 2021. The post-pandemic global economic recovery and the private consumption boosted by strong remittance flows from the Bangladeshi diaspora around the world are expected to be the key drivers of growth in 2022.

The general government gross debt remained relatively low in 2020 and 2021 - at 38.9% and 39.9% of GDP respectively - as a result of a tight fiscal policy. Nonetheless, the tax base is narrow owing to a number of exemptions, weighing on public revenue. Public debt ratio to GDP is consequently anticipated to increase to 41% in 2022 and remain stable in 2022. A new VAT law was introduced at the start of the fiscal year 2019-20 in an attempt to increase tax income; however, its impact has been limited since the launch. Financial situation of the banking sector remains weak due to a large share of non-performing loans and an increase in restructured loans. Inflation moderated to 5.6% in 2020 and 2021, and is expected to remain stable in 2022 (5.7%) and in 2023 (5.8%) despite the COVID-19 pandemic. Current account deficit was estimated to have narrowed to -1.1% of GDP in 2021 and was forecasted to reach -1.5% in 2022 and -1.9% in 2023. 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.

In 2022, the country’s most immediate challenge remains the economic, social and public health impacts of the COVID-19 pandemic. The official unemployment rate according to the latest survey was 4.2% in 2019, 4.1% in 2020 and 6% in 2021 (Trading Economics, 2022) but this more than doubles to over 10% for the youth unemployment rate. More importantly, 29.8% of young people in Bangladesh, including over 47% for young women, were not involved in education, employment or training in 2020. 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. Climate change also poses a serious threat to Bangladesh. Transparency International ranks Bangladesh as 147th out of 180 countries in its Corruption Perceptions Index 2021, stable compare to a year earlier.

Fiscal risks include weak domestic revenue growth (if tax reforms are delayed) and higher COVID-19-related expenditure. In the financial sector, contingent liabilities from non-performing loans combined with weak capital buffers could necessitate recapitalizations of state owned banks and depress credit growth. External risks remain elevated. While demand for RMGs appears to be stabilising, the recovery is fragile. Demand for Bangladesh’s overseas workforce in the Persian Gulf region may also be impacted by the ongoing recession in that region, impairing future remittance inflows (World Bank, 2022).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 302.40323.06e355.69390.61429.42
GDP (Constant Prices, Annual % Change) 8.23.5e4.66.57.2
GDP per Capita (USD) 1,855e1,962e2,1392,3272,534
General Government Gross Debt (in % of GDP) 35.738.9e39.941.041.0
Inflation Rate (%) 5.55.6e5.66.06.2
Current Account (billions USD) -5.10-4.72e-3.81-5.84-8.26
Current Account (in % of GDP) -1.7-1.5e-1.1-1.5-1.9

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Bangladesh Taka (BDT) - Average Annual Exchange Rate For 1 ZAR 5.336.056.305.835.14

Source: World Bank, 2015

 

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Latest Update: July 2022