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Bangladesh Economy At a Glance

"Bangladesh is now one of the two fastest growing economies in the world”. During last seven years, the size of the economy doubled, the foreign currency reserves more than quadrupled (in 2009, the reserves stood at less than US$6.5 billion, now it crossed US$29 billion.), inflation came down (around 6%), and the interest rates declined. Remittances from the Bangladeshi diaspora which is around 8.6 million provide vital foreign exchange.

Bangladesh has made remarkable progress in raising incomes, improving social indicators and has been upgraded as a “Lower Middle-Income Country” by World Bank under the dynamic leadership of the current Prime Minister Sheikh Hasina.

The country has been classified as a "Next Eleven" emerging market and one of the "Frontier Five" emerging economies in the world by Goldman Sachs and JP Morgan respectively.

In Bangladesh, a strong middle class is gradually forming which according to some estimates is close to 18 % of the population. Middle-class people is rising rapidly and would be 25 percent of the total population by 2025. The huge demographic dividend has created the window of economic opportunity for Bangladesh. Poverty has been reducing about 2 percent per year and the predication says that it will come down to 8 percent by 2021.

The country of 160 million people is characterized by a vibrant domestic consumer market. Bangladesh is a largely homogeneous society with no major internal or external threats and a population with great resilience in the face of adversity. A huge labor with enthusiasm, hardworking ability and specifically with cheaper cost is suitable for any labor-intensive industry.

Being a bridge between South and South-East Asia, Bangladesh has a great advantage of her strategic location under the shadow of two giants China and India. Bangladesh has achieved annual export growth rate of 13.6 % over the last ten years - a testimony to its export competitiveness. Our export is diversifying from labor-intensive to capital-intesive industry which has been coined as a move from "Shirt to Ship."

The steady growth in export business, hard-working labour force and committed entrepreneurs supported by the pro-business, pro-investment policies of the Government are leading Bangladesh towards the line of global business competency. The country’s unequivocal position for peace and harmony, regional stability, cooperation, economic development through international and regional trade with its development and trade partners and an increasing flow of remittance by expatriate Bangladeshis living across the world have helped the country achieve and retain the impressive economic status.

International Monetary Fund (IMF) in its World Economic Outlook, 2015 has ranked Bangladesh as the 56th largest economy in the world in terms of nominal GDP in 2014. World Bank’s ranking of Bangladesh in the same category is 58th (2013), the United Nations’ (2013) - 57th and the World Fact Book of the CIA has placed Bangladesh in 56th position (2014). The Gross Domestic Product (GDP) of Bangladesh was worth US$ 200 billion in 2015. Bangladesh has experienced average GDP growth rate of more than 6 percent over the past decade. The seventh five year plan has forecast the average economic growth rate of Bangladesh over the next five years will be 7.4 percent. Although more than half of the GDP is generated through the service sector, almost half of the total population are employed in agriculture.

Bangladesh experienced a satisfactory FDI in the last five years. World Investment Report 2014 ranked Bangladesh 16th among 74 FDI-recipient countries with a record US$ 1.59billion FDI inflow in 2013. This is the third time Bangladesh’s FDI has exceeded the billion dollar mark in a single year. Standard & Poors latest credit rating for Bangladesh stands at BB-. Moody’s rating for Bangladesh sovereign debt is Ba3. The transfer and convertibility (T&C) assessment remains ‘BB-‘. The Government of Bangladesh has planned a long-term perspective plan, with a target to make Bangladesh a middle- income country by 2021, by raising the real per capita income to US$ 2,000 which now stands at US $ 1,327 (in real terms).

The Bangladesh textile industry is the second-largest in the world and has been forecasted to exports to the value of US$50 billion by 2021. Due to emerging middle class and in general better income level of common people, domestic demand is growing and that becomes an important driver of economic activity. As major economies of the world are gradually losing their competitiveness, manufacturing has been gradually starting to take root in the country. Bangladesh has now emerged as an important manufacturing base for textile products, pharmaceuticals, finished leathers, light and medium industries, IT and shipbuilding. While world trade was severely disrupted by the global recession in recent past with exports of most countries declining sharply, the export of Bangladesh shows satisfactory growth. Bangladesh has emerged as the second largest exporter in the world apparel market and is also doing exceedingly well in the exports of finished leathers and leather goods, frozen foods, jute and jute goods, pharmaceutical products, light engineering products and small ocean going vessels. Most of the items in the import list are petroleum products, capital goods and industrial raw materials.

It is now seen as a model for other comparable economies for its impressive achievements in the socio-economic sector in the recent years. Seven mega development projects by the government are well underway and are expected to have significant positive impact for the country. All of the seven top priority Fast Track Projects costing around US$40 billion have now gained pace. The projects are the Padma Bridge, Rooppur Nuclear Power project, Paira Sea Port, the coal fired large power projects of Matarbari and Rampal, Metro Rail and LNG terminal. The Rooppur project alone claims more than US$12 billion. The Paira port project, which would take seven years to complete in three phases, also may need over US$15 billion. In a report, the World Bank stated that the Padma Bridge project, once completed, alone will enhance GDP by 0.56 percent annually while accelerating economic activities in the backward south -western region of the country.

Design and Developed by AKM Mahfujur Rahaman