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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).

 
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 , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

The Bangladeshi economy relies on its enormous human resources, rich agricultural soils and abundant water resources. Agriculture represented 11.6% of GDP and employed 38% of the total workforce in 2022 (World Bank, 2023). Main crops include rice, tea, jute, wheat, sugarcane, tobacco, spices, and fruits. Bangladesh is the world's fourth biggest rice producer, although shortages caused by natural disasters occasionally force the country to import rice. 

Industry represented 33.3% of GDP and employed 21% of the total workforce in 2022 (World Bank, 2023). Textile is by far the largest industry, accounting for more than 80% of the country's total exports. Secondary industries include paper, leather, fertilisers, metals, and pharmaceuticals.

Services accounted for 51.3% of GDP and employed 40% of the total workforce in 2022 (World Bank, 2023). Microfinance and computing are among the largest sectors, with the country's technology exports reaching around USD 1 billion per year.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 37.1 21.7 41.2
Value Added (in % of GDP) 11.2 33.9 51.0
Value Added (Annual % Change) 3.1 9.9 6.3

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Bangladesh Taka (BDT) - Average Annual Exchange Rate For 1 USD 78.4780.4483.4784.0084.70

Source: World Bank - Latest available data.

 

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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.

 
Foreign Trade Values 20182019202020212022
Imports of Goods (million USD) 60,49559,09452,80480,44888,234
Exports of Goods (million USD) 39,25239,33733,60544,22354,695
Imports of Services (million USD) 9,6199,5587,92710,86612,155
Exports of Services (million USD) 5,4466,2146,0207,4758,270

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 32.531.626.327.733.8
Trade Balance (million USD) -17,284-15,929-16,394-32,617-29,792
Trade Balance (Including Service) (million USD) -21,457-19,273-18,300-36,008-33,677
Imports of Goods and Services (Annual % Change) 23.90.5-11.415.331.2
Exports of Goods and Services (Annual % Change) 6.111.5-17.59.229.4
Imports of Goods and Services (in % of GDP) 19.818.515.817.120.9
Exports of Goods and Services (in % of GDP) 12.713.110.410.712.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) 3.02.27.27.57.8
Volume of imports of goods and services (Annual % change) -12.92.417.69.59.0

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Member of South Asian Association for Regional Cooperation (SAARC), as well as of the preferential trade agreements (SAPTA) and Free Trade Area (SAFTA) associated with the Association.
Member of the Group of 8 Developing Countries (
G-8).
Member of the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation (
BIMSTEC).
Member of the Asia-Pacific Trade Agreement (
APTA).
 
 

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Political Outline

Current Political Leaders
President: Mohammed Shahabuddin (since 24 April 2023)
Prime minister: Sheikh Hasina (since 6 January 2009)
Next Election Dates
Presidential: 19 February 2023
House of the Nation: January 2024
Main Political Parties
The main political parties are :

- Awami League (AL): governing party, centre to centre-left;
- Workers Party of Bangladesh: left-wing to far-left, communism, marxism-leninism;
- Jatiya Party: centre-right to right-wing;
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Bangladesh Nationalist Party (BNP): right-wing, national and social conservatism, economic liberalism.

Other minor parties are:

-Jatiya Samajtantrik Dal (JSD)
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Bangladesh Tarikat Federation (BTF)
-Bangladesh Jamaat-e-Islami (JIB)
-Liberal Democratic Party (LDP)

Executive Power
The Head of State, the President of the Republic, is elected for a 5-year term by the Parliament. The President of Bangladesh has a representative role as the Prime Minister holds most executive powers. The latter is appointed by the President and must be a member of the majority party in the parliament. The government is composed of ministers selected by the Prime Minister.
Legislative Power
Legislative power is vested in a unicameral parliament called the House of Nations or Jatiya Sangsad. Its 350 members are elected by direct universal suffrage for a five-year term.
 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Bangladesh, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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