The Voice News: Bangladesh’s economy has recorded its slowest growth in 34 years—excluding the pandemic-induced contraction—expanding by just 3.97% in the current fiscal year, according to provisional estimates from the Bangladesh Bureau of Statistics (BBS).
This marks the lowest non-pandemic growth since FY 1990–91, when GDP growth was just 3.24%. The only time the rate dipped lower in recent history was during FY 2019–20, amid the global COVID-19 crisis, when it stood at 3.75%.
The downturn reflects widespread sluggishness across the agriculture and service sectors, while only modest resilience was observed in industry, largely due to strong performance in the ready-made garment (RMG) sector.
Sector-wise Performance
Agriculture: Grew by just 1.79%, a significant decline from 3.30% in the previous fiscal year. The World Bank attributed this to severe flooding in the early part of the year, which severely disrupted crop production.
Service Sector: Expanded by 4.51%, down 58 basis points from last year. Within this category:
Wholesale and retail trade grew by 4.35% (down from 5.77%)
Transport services grew by 4.37% (down from 5.15%)
Real estate saw stagnant growth at 3.19%
Industry: Surprisingly improved, with growth at 4.34%, up 83 basis points from last year. However, this growth was concentrated mainly in the RMG sector, while other industrial segments remained subdued.
Electricity production offered a rare bright spot, growing by 6.32% compared to just 1.55% last year. On the other hand, the gas sector’s performance deteriorated.
Revised Projections and External Views
The Awami League government had originally targeted 6.75% GDP growth for FY 2024–25. This was later revised down to 5% by the interim government amid ongoing economic challenges.
However, international development institutions were even more cautious:
World Bank: 3.3%
Asian Development Bank (ADB): 3.9%
Both institutions highlighted a toxic mix of political instability, high inflation, and factory disruptions—including worker protests—that weakened both consumer demand and investor confidence.
Investment and Inflation Trends
The overall investment-to-GDP ratio fell to 29.38%, down from 30.7% last year. This includes:
Private investment: 22.48% of GDP (down from 23.96%)
Public investment also declined but to a lesser degree.
The private sector credit growth, a key indicator of business confidence and expansion, stood at just 7.3% year-on-year as of December 2024—the lowest rate in 30 years.
Persistently high inflation eroded consumer purchasing power, leading the Bangladesh Bank to maintain a tight monetary policy stance. The central bank raised its policy rate several times throughout the fiscal year to manage inflationary pressures.
Overall Economic Indicators
Despite the slowdown, the size of the economy expanded to $462 billion, up from $450 billion the previous year. The per capita income rose slightly to $2,820, compared to $2,738 last fiscal year.
However, several economists have cast doubt on the credibility of these figures.
Concerns Over Data Accuracy
Dr. Selim Raihan, Executive Director of the South Asian Network on Economic Modelling and a professor at Dhaka University, expressed concern over the reliability of national accounts data. He was part of a 12-member expert panel that authored a white paper on the state of Bangladesh’s economy earlier this year.
“GDP and income figures are often based on flawed assumptions and outdated methods,” said Raihan. “They are inflated and manipulated.”
The white paper claimed that Bangladesh’s economic growth has been overstated since 1995, with more deliberate inflation of figures occurring after FY 2012–13. During this time, the previous government promoted a narrative of rapid development that many experts now consider statistically questionable.
Raihan reiterated the panel’s recommendation for the establishment of an independent data commission to audit and revise the methodologies used in national statistics.
“Without reliable data, economic planning becomes delusional rather than developmental,” he added.
Analysis:
This fiscal year’s performance underscores a critical moment for Bangladesh. While the economy remains sizeable and resilient in some sectors, its long-standing growth narrative is being seriously questioned. Structural weaknesses—ranging from unreliable data and political unrest to declining investment—demand urgent attention from policymakers, analysts, and international partners alike.
