Bangladesh : Economy

Economy

GNI: 
US$142.9bn
GNI PC: 
US$900
GDP Growth: 
5.9% p.a. 2009–13
Inflation: 
7.6% p.a. 2009–13

The country has a high population density, limited natural resources and an agricultural economy vulnerable to floods and cyclones, but it nevertheless achieved economic growth averaging around four per cent p.a. from the 1970s. It also has huge reserves of natural gas (estimated at 300 billion cubic metres in January 2014) and some coal.

Economic policy has long aimed at the alleviation of poverty through increasing food production and expanding education, while developing an industrial and technological base, but severe floods have often frustrated development plans.

From the mid-1990s, successive governments were committed to free-market policies, privatisation of state-owned enterprises, attracting overseas investment and banking reform. More than 60 state-owned enterprises, in areas as diverse as manufacturing, agriculture, transport and communications, were identified for divestment, but progress was slow due to strong popular opposition. These policies led to an improvement in economic performance, even in 1998 when the country was devastated by floods that covered nearly two-thirds of the land area.

From 2000 the economy grew strongly, with growth rates of at least six per cent p.a. in 2011–14 driven by strong exports. In 2008–09, despite the world economic downturn, the economy remained buoyant with continuing growth in clothing exports and remittances from Bangladeshis living abroad. Keeping inflation under control, however, proved more challenging.