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

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.