Economic Overview

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%.

Foreign Trade

Trade represents only 34% of Bangladeshi GDP (World Bank, latest data available). According to government data, ready-made garments comprise the majority of exports, followed by jute, shrimps and prawns, and footwear; whereas imports are led by Iron & steel, edible oil, fertilizers, and petroleum products.

The country's main export partners are the U.S. (19.8%), Germany (14.4%), the UK (9.1%), Spain (6%), and France (5.1%). Imports come chiefly from China (21.3%), India (17%), Singapore (8%), Indonesia (5%), and Malaysia (3.9% - data NBS). The country acts as a passageway between the center 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, export processing zones, as well as high-level negotiations with key countries. Bangladesh has benefited from more simplified procedures and regulations to export its products to the European Union as an LDC (least developed country).

Since becoming independent, Bangladesh has had a negative trade balance, with its deficit being financed by international aid and expatriate transfers. In 2022, exports of goods from Bangladesh increased to USD 54.7 billion (from 44.2 billion the previous year) and imports of goods increased to USD 88.2 billion (from 80.4 billion in 2021 – data WTO). With regards to services, the imports for 2022 were USD 12.1 billion, while the exports were USD 8.2 billion. The World Bank estimated the country’s trade deficit at 8% of its GDP (from 6.4% one year earlier). In the first half of the 2023-24 fiscal year (July 2023-June 2024), Bangladesh's total exports increased by 0.84% year on year to USD 27.54 billion, as per the latest official data. Meanwhile, imports fell by 18.19% year on year to USD 33.68 billion during the same period.

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.