In a recent report by the Center for Policy Dialogue (CPD) there have been major issues in the economic sector of Bangladesh. In a press briefing by the CPD on December 23, it attempted to discredit Bangladesh’s economic progress without verifiable information or data.
The CPD analyzed the various reports published in the newspaper. In addition, the report says that in the current crisis, the overall economy of the country has not faced such a challenge before. The economy is becoming increasingly fragile. According to the organization, major reforms are needed to solve the crisis in the economy.
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Now the question arises whether the information provided by CPD has any accuracy or not with the current situation of Bangladesh’s economy.
Highlights of the CPD report on key economic points and issues
The report provides an overview of the Bangladesh economy in FY2023-24, focusing on areas such as public finance, inflation, the banking sector, the external sector, and labor rights.
Public Finance: Revenues and expenditures as a share of GDP declined in FY2023 compared to the previous year. The slow pace of revenue mobilization led to a revenue shortfall of Tk 67,142 crore in FY2023. The implementation rate of ADP expenditure was 77.5% in FY2023, lower than previous years. The pace of implementation has been slow in the early months of FY2024. Bangladesh has to fulfill several IMF conditions related to public finance including those on revenue collection, primary balance, priority spending, capital investment, etc.
Inflation: The point-to-point inflation rate was close to 10% during April-Oct 2023. Food inflation particularly saw a spike.Prices of essentials like rice, lentils, edible oil, flour, fish, meat, milk, etc. have risen sharply from 2019 to 2023. Government measures to control inflation have been ineffective so far.
Banking Sector: Irregularities and scams have led to the loss of over Tk 92261 crore from banks during 2008-2023.Non-performing loans (NPLs) have tripled over the past decade, reaching Tk 1560.4 billion in Q4FY23. Lack of independence of the central bank, weak governance of banks, and legal loopholes were identified as reasons behind NPLs.Liquidity pressure on banks increased, with declining excess liquidity. Real interest rates on deposits turned negative.
External Sector: Import compression led to marginal improvements in trade balance but reserves fell to USD 20.7 billion by October 2023.Debt servicing liabilities are set to rise considering higher interest costs and reduced concessionality of loans. The gap between EPB and BB figures on export earnings increasing; indicating data issues.
Labor Rights: Concerns raised by the US, EU, and UN regarding freedom of association, workplace safety, child labor, gender discrimination, etc. in Bangladesh. Bangladesh lags behind peer nations in the legal framework, inspection authority, budget allocation, etc. for ensuring labor rights.
The report highlights the major economic challenges facing Bangladesh and provides recommendations in each focus area according to CPD. Addressing these will be critical as Bangladesh aims to restore macroeconomic stability.
Bangladesh: A developing economy
In a testament to its economic prowess, Bangladesh has emerged as the world’s fastest-growing brand nation, soaring 37% from $371 billion in 2022 to a staggering $508 billion in 2023, according to the Global Soft Power Index 2023 report by Brand Finance. Securing the top-gaining brand nation position globally, Bangladesh outpaces counterparts like Uzbekistan, Azerbaijan, UAE, and Georgia. Remarkably, it now boasts the second-highest brand value in South Asia, surpassing Pakistan by double and Sri Lanka by tenfold.
The report underscores Bangladesh as an economic beacon, endorsed by the World Bank for its inspiring model of poverty eradication. Boston Consultative Group’s “The Trillion Dollar Prize” report further amplifies Bangladesh’s economic strength, with a 6.4% average GDP growth from 2016-2021, outperforming lower-middle-income countries. Key drivers include rising consumer spending, a dynamic young workforce, economic resilience, digital advancements, increased government spending, and rapid private sector investment growth. The economic landscape has transformed, with agriculture contributing 12% and industry surging to 35%.
Once considered accidental, Bangladesh’s success is now a global “Development Miracle,” evident in meeting Millennium Development Goals, prestigious awards, and transition from Least Developed Country status. Under Prime Minister Sheikh Hasina’s leadership, macroeconomic policies and infrastructure projects solidify Bangladesh’s stable and growing economy. Digital transformation sees a doubled digital economy, reaching $3.5 billion in 2022.
Initiatives like Centenary Delta Plan 2100 and the National Social Security Strategy define Bangladesh’s commitment to climate resilience, smart development, and social progress, ensuring a sustained trajectory of growth and prosperity. The last decade showcases not just economic achievements but the resilience and dynamism of Bangladesh’s people in the face of challenges.
Bangladesh’s GDP in the last 15 years
| Year | GDP | Per Capita | Growth |
| 2022 | $460.20B | $2,688 | 7.10% |
| 2021 | $416.26B | $2,458 | 6.94% |
| 2020 | $373.90B | $2,233 | 3.45% |
| 2019 | $351.24B | $2,122 | 7.88% |
| 2018 | $321.38B | $1,963 | 7.32% |
| 2017 | $293.75B | $1,816 | 6.59% |
| 2016 | $265.24B | $1,660 | 7.11% |
| 2015 | $195.08B | $1,236 | 6.55% |
| 2014 | $172.89B | $1,109 | 6.06$ |
| 2013 | $149.99B | $974 | 6.01% |
| 2012 | $133.36B | $877 | 6.52% |
| 2011 | $128.64B | $856 | 6.46% |
| 2010 | $115.28B | $777 | 5.57% |
| 2009 | $102.48B | $699 | 5.05% |
| 2008 | $91.63B | $630 | 6.01% |
Undoubtedly, the GDP growth statistics of Bangladesh demonstrate the country’s continuous development. Each year, the GDP has experienced an upward trajectory, rebounding even after a slight dip following the 2020 pandemic.
The Inflation Rate of Bangladesh in the last 15 years
| Year | Inflation Rate (%) | Annual Change |
| 2022 | 7.7.% | 2.15% |
| 2021 | 5.55% | -0.15% |
| 2020 | 5.69% | 0.10% |
| 2019 | 5.59% | 0.05% |
| 2018 | 5.54% | -0.16% |
| 2017 | 5.70% | 0.19% |
| 2016 | 5.51% | -0.68% |
| 2015 | 6.19% | -0.80% |
| 2014 | 6.99% | -0.54% |
| 2013 | 7.53% | 1.31% |
| 2012 | 6.22% | -5.18% |
| 2011 | 11.40% | 3.27% |
| 2010 | 8.13% | 2.70% |
| 2009 | 5.42% | -3.48% |
| 2008 | 8.90% | -0.21% |
Over the past 15 years, Bangladesh encountered an inflation rate of 11.40% only once, in 2011. Throughout the remaining 14 years under the AL government, there hasn’t been any instance of an inflation rate surpassing 10%. Therefore, the inflation rate information provided by CPD has been demonstrated to be inaccurate.
The loss of the banking sector
CPD alleges a loss of 92 thousand crore taka in the past 15 years under the AL government. In response, AL General Secretary and Bridge Minister Obaidul Quader demand evidence for this claim. He questions the whereabouts of such a substantial amount and asserts that the government is willing to respond if the money is identified. Until then, he urges against baseless accusations tarnishing the government’s reputation for development across various sectors without proper proof.
Reserve of Bangladesh in the past 10 years
Total reserves in Bangladesh from 2013 to 2022 (in billion US dollars)
Development in the Labor Rights
Bangladesh’s labor force, comprising 58.2% of the population, is pivotal to economic growth, with 2 million youths entering annually. Measures are in place to address ILO Constitution Article 26 complaints and enhance labor quality. Recent labor rule amendments from September 2022 aim to boost female workforce participation, applying nationwide and in industrial zones. Despite positive shifts, concerns persist.
Labor laws were amended in 2013 and 2018, improving compliance since the Labor Act 2006 and Bangladesh Labor Rules 2015. The nation is recognized for its labor intensity, notably in the ready-made garment and labor export sectors. Revisions, prompted by international scrutiny, prioritize productivity, worker well-being, and human rights compliance, addressing areas such as trade unions and employee rights.
Bangladesh’s regulatory agency for wage-related matters is the Minimum Wages Board. As of 2023, it has implemented minimum wage structures for workers across 44 different sectors. The labor rights of Bangladesh include-
- Yearly Increment
- Disciplinary Action Procedure
- Maternity leaves for Female Employees
- Better Workspace
- Looking after Worker’s Families
- Compensation for Work in Holidays and Wages of Workers
- Compensation
- Trade Union
Over the past 15 years, Bangladesh has orchestrated a transformative journey marked by robust economic growth, social progress, and resilience. Noteworthy achievements include consistent GDP elevation, dynamic labor force engagement, and commendable strides in women entering the workforce. The nation’s commitment to labor law amendments, and addressing international concerns, underscores its dedication to human rights and productivity. Despite challenges, Bangladesh’s economic and social landscape has evolved significantly, positioning it as a global player. The strides made in infrastructure, climate resilience, and inclusive development affirm Bangladesh’s status as a development success story in the last decade and a half.
