Economic and Political Overview

flag Bangladesh Bangladesh: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

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: real GDP growth fell to 5.2% in FY24 due to weak consumption and exports and is expected to decline further to 4.0% in FY25 amid sluggish investment and industrial activity before rebounding to 5.5% in FY26 (World Bank).

The fiscal deficit was 4.5% of GDP in FY24. Revenue growth was robust but remained one of the lowest globally at 8.5% of GDP. Expenditure is estimated to have increased modestly to 13.0% of GDP, driven by current expenditure. The public debt to GDP ratio increased to 38.8% but remained sustainable. The fiscal deficit is projected to remain below 5.0% of GDP over the medium term. In the short term, total expenditure as a share of GDP is expected to decline due to contractionary fiscal policy. Over the medium to long term, strengthening revenue performance will be crucial to expanding investments in infrastructure and human capital (World Bank). Inflation remained high, averaging 9.7% in FY24, driven by elevated food and import prices. In response, the policy rate was increased by 100 basis points in FY25 to 9.5%, marking a cumulative rise of 425 basis points since May 2022. 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.

Despite a decline in overall unemployment (estimated at 4.5% in 2024), urban educated youth face rising joblessness as job creation stagnates in key industries like ready-made garments. Income inequality is also growing, with the Gini index rising from 0.50 to 0.53 between 2010 and 2022, particularly in urban areas. 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, and limited access to capital by the population.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 451.53451.47481.86540.62591.94
GDP (Constant Prices, Annual % Change) 5.85.44.57.77.3
GDP per Capita (USD) 2,6522,6252,7733,0823,343
General Government Gross Debt (in % of GDP) 39.338.539.239.540.1
Inflation Rate (%) 9.09.710.75.65.0
Current Account (billions USD) -11.63-6.51-7.35-12.75-13.52
Current Account (in % of GDP) -2.6-1.4-1.5-2.4-2.3

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

The Bangladeshi economy relies on its enormous human resources, rich agricultural soils, and abundant water resources. Agriculture represents 11% of GDP and employs 35.3% of the total workforce (World Bank, latest data available). 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. Jute, once the country's primary export crop, remains a significant contributor to the economy, although its importance has diminished over time. Cereal imports in Bangladesh are primarily wheat, which accounts for 80% of consumption, along with smaller amounts of rice and maize. For the 2024/25 marketing year, total cereal imports are forecast at 8.3 million tonnes, below average. Rice imports for 2025 are expected at 450,000 tonnes, wheat at 6.1 million tonnes, and maize at 2.1 million tonnes, driven by demand from livestock and fishing industries (FAO data).

Industry represents 34.6% of GDP and employs 20.9% of the total workforce (World Bank). The textile and garment industry is the cornerstone of Bangladesh's industrial economy, contributing significantly to export earnings and providing employment to millions of people, particularly women, across the country. The pharmaceutical sector has also witnessed notable growth, with Bangladesh emerging as a key player in the global generic drug market. Light manufacturing industries such as electronics, footwear, and plastics are gaining momentum, fueled by favourable government policies and increasing foreign investment. Industrial output in Bangladesh grew at its slowest pace since the COVID-19 pandemic, increasing by just 6.66% in fiscal year 2023 due to declining exports, import restrictions, and reduced domestic demand caused by persistent inflation (data Bangladesh Bureau of Statistics – BBS).

Services account for 51.1% of GDP and employ 43.8% of the total workforce (World Bank). Key sectors include telecommunications, banking and finance, transportation, and the burgeoning IT sector. Telecommunications has experienced remarkable growth, with widespread mobile phone penetration and increasing internet connectivity transforming communication networks across the country. The IT sector is emerging as a promising area, with a growing number of companies engaging in software development, outsourcing, and IT-enabled services. The services sector grew by 5.80% in FY24, with wholesale and retail trade, along with the repair of motor vehicles, motorcycles, and household goods, posting a growth of 6.19% (data BBS).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 35.3 20.9 43.8
Value Added (in % of GDP) 11.0 34.6 51.1
Value Added (Annual % Change) 3.4 8.4 5.4

Source: World Bank - Latest available data.

 

Find more information about your business sector on our service Market Reports.

 
 
Monetary Indicators 20162017201820192020
Bangladesh Taka (BDT) - Average Annual Exchange Rate For 1 MUR 2.212.332.462.372.15

Source: World Bank - Latest available data.

 
 

Find out all the exchange rates daily on our service Currency Converter.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
56,5/100
World Rank:
120
Regional Rank:
25

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.02/10
World Rank:
71/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

Return to top

Foreign Trade in Figures

Trade represents only 31% of Bangladeshi GDP (World Bank, latest data available). The vast majority of exports comprises apparel and clothing accessories (43.4% of the total for knitted, 37.9% for not knitted), while footwear accounts for 2.2% and cotton for 1.2% (data Export Promotion Bureau for FY 2023). As per imports, they are led by refined petroleum (10.4%), petroleum gas (4.0%), raw cotton (3.3%), scrap iron (2.7%), and non-retail pure cotton yarn (2.2% - data OEC).

The country's main export partners are the United States (15.7%), Germany (15.2%), the United Kingdom (7.8%), Spain (7.2%), and Poland (5.6%); while imports come chiefly from China (34.5%), India (17.0%), Indonesia (5.4%), Singapore (4.7%), and Malaysia (3.7% - data OEC, 2023). 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, 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 2023, exports of goods from Bangladesh increased to USD 55.7 billion (from 54.7 billion the previous year) and imports of goods increased to USD 66.8 billion (from 88.2 billion in 2022 – data WTO). With regards to services, the imports for 2023 were USD 10.7 billion, while the exports were USD 6 billion. The World Bank estimated a trade deficit of 4.7% of GDP (from 8% one year earlier). According to data from the Export Promotion Bureau (EPB), in the first half of fiscal year 2024-25, exports rose 12.84% to USD 24.53 billion. Garment shipments, the largest export category, grew 13.28% to USD 19.88 billion. Of this, knitwear exports totalled USD 10.83 billion, up 13.01%, and woven garment exports reached USD 9.05 billion, increasing 13.60%. Leather goods exports grew 10.44% to USD 577.29 million, while cotton products rose 16.32% to USD 319.06 million. Home textiles increased 7.85% to USD 410.81 million, and non-leather footwear surged 39.10% to USD 273.89 million, according to EPB data.

 
Foreign Trade Indicators 20192020202120222023
Imports of Goods (million USD) 59,09452,80480,44888,23466,863
Exports of Goods (million USD) 39,33733,60544,22354,69555,788
Imports of Services (million USD) 9,5587,92710,86612,19010,713
Exports of Services (million USD) 6,2146,0207,4758,2346,095
Imports of Goods and Services (Annual % Change) 0.5-11.415.331.2-9.8
Exports of Goods and Services (Annual % Change) 11.5-17.59.229.48.0
Imports of Goods and Services (in % of GDP) 18.515.817.120.917.8
Exports of Goods and Services (in % of GDP) 13.110.410.712.913.2
Trade Balance (million USD) -15,929-16,394-32,617-29,613-9,652
Trade Balance (Including Service) (million USD) -19,273-18,300-36,008-33,568-14,288
Foreign Trade (in % of GDP) 31.626.327.733.831.0

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 
 
 
 
 

To go further, check out our service Import-Export Flows.

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

Return to top

Sources of General Economic Information

Ministries
Ministry of Finance
Statistical Office
Bangladesh Bureau of Statistics
Central Bank
Bangladesh Bank
Stock Exchange
Dhaka Stock Exchange
Search Engines
Ethikana
Economic Portals
Bangladesh Economy

Return to top

Political Outline

Current Political Leaders
President: Mohammad Shahabuddin CHUPPI (since 24 April 2023)
Prime minister: Muhammad YUNUS (since 8 August 2024)
Next Election Dates
Presidential: 2028
House of the Nation: December 2025
Main Political Parties
The main political parties include:

- Awami League (AL): governing party, centre to centre-left. It is the ruling party since 2009;
- Bangladesh Nationalist Party (BNP): centre to centre-right, one of the two dominant parties in Bangladesh;
- Jamaat-e-Islami Bangladesh: Islamist, social conservatism;
- Workers Party of Bangladesh (WPB): left-wing to far-left, communism, marxism-leninism;
- Jatiya Party (JP): centre-right to right-wing;
- Jatiya Samajtantrik Dal (JSD): left-wing, socialism;
- Bangladesh Kalyan Party (BKP): radical centre, nationalism.
Type of State
Bangladesh is a parliamentary republic.
Executive Power
The President of Bangladesh, as Head of State, is elected by Parliament for a 5-year term and primarily holds a ceremonial role. Executive power is concentrated in the hands of the Prime Minister, who is appointed by the President and must be the leader of the majority party or coalition in Parliament. The Prime Minister selects the members of the government, who are then formally appointed by the President.
Legislative Power
Legislative power in Bangladesh is vested in a unicameral parliament called the Jatiya Sangsad. It consists of 350 members, of whom 300 are directly elected through universal suffrage for a 5-year term. The remaining 50 seats, reserved for women, are filled indirectly by the elected members of parliament through proportional representation. All members serve 5-year terms.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
152/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
5/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Return to top

Any Comment About This Content? Report It to Us.

 

© eexpand, All Rights Reserved.
Latest Update: May 2025