GDP poised to reach Tk55,97,410cr in next FY

Al Amin :

Like many other countries, Bangladesh’s economy is currently facing significant challenges due to the ongoing conflicts in Europe and the Middle East. These crises show no immediate signs of resolution, compounding the difficulties as Bangladesh approaches its LDC graduation.

Key economic indicators, such as export earnings, remittance inflows, and foreign currency reserves, are all trending downward. Additionally, the country is grappling with high inflation rates, putting immense pressure on the populace.
In this context, the Bangladesh government plans to expand the size of the country’s gross domestic product (GDP) in the next fiscal year, according to the finance ministry. For the fiscal year 2024-25, the GDP is projected to reach Tk 55,97,410 crore, which is an increase of Tk 5,90,628 crore compared to the current fiscal year’s GDP of Tk 50,6,672 crore.

Officials from the finance ministry assert that the economy is rebounding, thanks to various measures taken by the government to create a favorable business environment and to develop a skilled labor force. These initiatives are expected to help achieve the desired GDP growth.
Dr. Selim Raihan, Executive Director of SANEM, commented on
the necessity of growth, stating, “Growth is necessary because without growth, people’s incomes won’t grow, and overall economic activity won’t expand.” He emphasized the importance of understanding the sources of growth and ensuring that it is inclusive.

Dr. Raihan noted that the growth in recent decades has been driven primarily by the export of ready-made garments (RMG), remittance inflows, and infrastructural development, with agriculture also playing a crucial role. However, he pointed out that this growth base is not particularly strong, as it relies heavily on a single export commodity and fluctuating remittance earnings. Sustaining this growth will be challenging without significant economic or export diversification and attracting large-scale foreign direct investment.

Reflecting on the historical context, GDP growth averaged around 3% in the 1970s and 1980s. This began to change in the 1990s with increased private sector participation, pushing growth to 4-5%. After 2000, growth further increased, surpassing 6% in the fiscal year 2010-11 and exceeding 7% by 2015-16. By 2018-19, GDP growth had reached 8.13%. However, the COVID-19 pandemic disrupted this trajectory, slowing economic activities.

According to the World Bank’s Dhaka office, Bangladesh has demonstrated a strong track record of growth and development, even amid global uncertainties. The country has benefited from a robust demographic dividend, strong RMG exports, resilient remittance inflows, and stable macroeconomic conditions over the past two decades.

However, to sustain and further accelerate growth, Bangladesh must focus on creating jobs through a competitive business environment, increasing human capital, developing a skilled labor force, building efficient infrastructure, and establishing policies that attract private investment. This multifaceted approach is essential to achieving the desired growth rate and ensuring long-term economic stability.