Economic Environment

Main Features of the Economy

Bangladesh is a least developed country (LDC), but it is expected to graduate from this status in 2024 (Section 2.1.3). Strong GDP growth over the past decade has resulted in GDP per capita increasing to USD 1,675 (Tables 1.1 and 1.2) and Bangladesh crossing the World Bank's threshold to lower middle-income country status in 2015. Growth has also resulted in a decline in poverty levels, which fell to 21.8% in fiscal year (FY) 2018 and an improvement in other social indicators, such as infant mortality and life expectancy. Inequality as measured by the Gini coefficient remained largely unchanged, at around 0.32 during the review period. The services sector is the largest contributor to GDP, accounting for nearly 56% of GDP in 2017/18, followed by industry (30%, of which manufacturing 19%) and agriculture, fisheries and forestry (13.8%). Recently, the construction sector has also become an important contributor to GDP. Prudent macroeconomic management has resulted in declining price levels, relatively low unemployment and manageable external debt levels (Table 1.1). Furthermore, it is estimated that a sizable portion of the economy is informal, implying that GDP and GDP per capita are significantly underestimated, thereby reducing the effectiveness of government policy.