Bangladesh economy crosses half-trillion-dollar mark

Bangladesh's gross domestic product (GDP) growth for the outgoing FY2025-26 has been provisionally estimated at 4.14%, slightly higher than the 3.49% in FY2024-25.

According to data released by the Bangladesh Bureau of Statistics (BBS) today (10 June), for the very first time, the size of the economy at current prices stood at Tk61,20,209 crore - approximately $501 billion - in FY26, up from Tk55,15,026 crore, or $456 billion, in FY25.

Sector-wise data showed that the agriculture sector maintained positive momentum during FY26. Growth in the sector rose to 2.78% this fiscal year from 2.42% in FY25.

However, industrial growth slowed during the period. The provisional estimate for the sector stood at 2.86%, down from 3.71% in FY25.

The services sector recorded a modest improvement, with growth rising to 4.59% in FY26 from 4.35% in the previous fiscal year.

Despite the increase in overall GDP growth, both investment and savings ratios declined.

The investment-to-GDP ratio fell to 27.93% in FY26 from 28.54% in FY25. Domestic savings also declined to 21.38%, while national savings dropped to 26.93%.

Meanwhile, per capita income increased to Tk3,68,873 or $3,020 in FY26, up from Tk3,34,511 or $2,769 in the previous fiscal year.

According to economists, the decline in investment and savings despite higher GDP growth signals underlying vulnerabilities in the economy and could affect long-term growth momentum.

On GDP reaching $501 billion, Professor Sayema Haque Bidisha of the Economics Department at the University of Dhaka said, "An increase in the size of GDP and per capita income is certainly a positive development. It indicates that the economy is gradually recovering. However, we should not focus solely on the size of growth; we must also examine how widely the benefits of that growth are being distributed."

She added that political and economic stability play a crucial role in attracting investment, as investors generally seek environments that offer stability and predictability.

On GDP growth, Bidisha said overall growth is a positive sign, but the country's objective should be to ensure growth that is sustainable, inclusive and employment-oriented, particularly through the manufacturing sector.

"GDP growth is undoubtedly an important indicator. But even more important is the quality of that growth. We need to understand how the growth is being generated, which sectors are driving it, and how much of its benefits are reaching ordinary people," she said.

She stressed that growth should not be evaluated solely based on numbers. "Rather, we should assess whether the growth is inclusive. A slight increase or decrease in growth in a single year is not a major issue; what matters is the long-term structure of growth and its overall impact."

Professor Bidisha noted that expecting very high growth in the agricultural sector is not realistic because the sector operates within natural constraints.

However, she said the overall increase in growth is a positive signal for the economy and suggests that economic activities are gradually regaining momentum.

The professor expressed particular concern over the slowdown in industrial growth, especially in the manufacturing sector.

"For a country's structural economic transformation, the manufacturing sector is extremely important. A significant share of future growth is expected to come from this sector. Therefore, a slowdown in manufacturing growth should serve as a warning sign for us," she said.

Professor Bidisha further noted that the sluggish pace of private-sector investment and the negative trend in manufacturing deserve serious attention from policymakers, as these sectors serve as the primary driving forces of the economy.

Emphasising the link between growth and employment, she said, "Employment is the main channel through which the benefits of growth reach ordinary people. However, past experience shows that job creation has not kept pace with economic growth, particularly in the industrial and service sectors. As a result, even when growth occurs, its benefits do not reach everyone."

She said future policymaking should prioritise forms of growth that generate employment opportunities and help reduce income inequality.