Economic Overview

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 3.4% in 2020, 6.9% in 2021 and 7.2% in 2022 despite the international effect of the COVID-19 pandemic. It is forecasted to remain high at 6% in 2023 and 6.5% in 2024, according to the updated IMF forecasts from January 2023. 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 2023.

The general government gross debt remained relatively low in 2021 and 2022 - at 35.5% and 37.5% 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 remain at 37.2% in 2023 and 36.9% in 2024. 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 2021 and 6.2% in 2022, and is expected to increase to 9.1% in 2023 before coming down to 6.8% in 2024. Current account deficit was estimated to have narrowed to -1.1% of GDP in 2021 but reached 4.1% in 2022. It was forecasted to reach -3.8% in 2023 and -3.5% in 2024. 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 2023, the country’s most immediate challenge remains the economic, social and public health impacts of the COVID-19 pandemic as well as the impact of geopolitical events. According to a International Labour Organization (ILO) report, Bangladesh's unemployment rate would remain at 4.8% in 2023, down from the projected 5% in 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 146th 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).

Foreign Trade

Trade represented 28% of Bangladeshi GDP in 2021 (World Bank, 2023). The main export products are clothes, raw jute and its derived products, leather, fish and frozen seafood. Bangladesh mainly imports machinery and equipment, chemical products, steel & metals, cement, food and oil derived products (OEC).

The country's main export partners are the European Union, including Germany at 15% of all exports), the United States (20%), the United Kingdom (11%) and China (2.3%). Bangladesh imports mainly from China (22% of all imports) , India (13%) , Singapore (9.5%) and Hong Kong with 5.6%. The country acts as a passageway between the centre of India and its Eastern provinces. Customs duties in Bangladesh are relatively high; however, the country is implementing a series of measures to reduce its trade barriers, including concessional tariffs, a customs duty recovery system and export processing zones as well as high-level negotiation with key countries. The country has benefited from more simplified procedures and regulations to exports its products to the European Union as an LDC (least developed country).

In 2021, exports of goods from Bangladesh increased to 44.22 billion USD (from 33.60 billion the previous year) and imports of goods increased to 80.44 billion USD (from 52.80 billion in 2020). Since becoming independent, Bangladesh has had a negative trade balance, with its deficit being financed by international aid and expatriate transfers. WTO estimated the 2021 trade balance to be -35.91 billion USD from -18.47 billion USD in 2020. With regards to services, the imports for 2021 were 10.87 billion USD, while the exports were 7.47 billion USD, leading to an overall trade balance of -32.52 billion USD.

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID19 disease in Bangladesh, please visit the Bangladeshi government platform with the official data. Official information on the progress of the epidemic in Bangladesh is consolidated by the Directorate General of Health Services. The agency provides a daily epidemiological update, which includes key national figures.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Bangladesh and the current sanitary measures in vigour, please consult the Bangladeshi Directorate General of Health Services (the website is in Bengali, but the publications are in English) including the up-to-date information on the containment measures put in place and public health recommendations.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of the the Bangladeshi Customs.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Bangladesh on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the information on the economic recovery scheme put in place by the Bangladeshi government to address the impact of the COVID19 pandemic on the Banagladeshi economy, please visit the website of the Bangladeshi Ministry of Finance. The information on the Bangladesh economic emergency plan is available here.

For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and  macroeconomic) taken by the Bangladeshi government to limit the socio-economic impact of the COVID-19 pandemic,  please consult the section dedicated to Bangladesh in the IMF’s Policy Tracker platform.

Support plan for businesses

For the information on the local business support scheme established by the Bangladeshi government to help small and  medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, please consult  the portal of the Bangladeshi Ministry of Finance and the Central Bank of Bangladesh.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

To find out about the support plan for exporters put in place by the Bangladeshi government, please consult the latest publications available on the Bangladeshi Export Promotion Bureau website.