| Bangladesh has a strong track record of growth and development, even in times of elevated global uncertainty. Despite uncertainties and frequent natural disasters, Bangladesh has witnessed robust economic growth and poverty reduction since its independence in 1971. From being one of the poorest nations at birth in 1971, Bangladesh reached lower-middle income status in 2015. Stable macroeconomic conditions underpinned an average annual real GDP growth of 6.4 per cent between 2010 and 2023. Poverty declined from 11.8 per cent in 2010 to 5.0 per cent in 2022, based on the international poverty line of $2.15 a day (using the 2017 Purchasing Power Parity and a comparable welfare series). Similarly, moderate poverty declined from 49.6 per cent in 2010 to 30.0 per cent in 2022, based on the international poverty line of $3.65 a day (using 2017 PPP). Moreover, human development outcomes improved along many dimensions, like a reduction in infant mortality and stunting, and an increase in literacy rates and access to electricity. Despite these gains, inequality has slightly narrowed in rural areas and widened in urban areas. |
| Challenges |
| At a crossroads to upper middle income, Bangladesh faces intertwined challenges in the short and medium terms. Bangladesh's economic growth over the past decade has faced significant challenges in recent years. Real GDP growth is estimated to have moderated to 5.2 percent in FY24 down from 5.8 percent in FY23. Inflation has remained elevated, financial sector vulnerabilities worsened, and pressure on the external sector persisted. Growth is expected to rebound gradually over the medium term. |
| To achieve its vision of attaining upper middle-income status, Bangladesh needs to create jobs through a competitive business environment, increase human capital and build a skilled labour force, build efficient infrastructure, and establish a policy environment that attracts private investment. |
| Development priorities include diversifying exports beyond the RMG sector; resolving financial sector vulnerabilities; making urbanization more sustainable and strengthening public institutions, including fiscal reforms to generate more domestic revenue for development. Addressing infrastructure gaps would accelerate growth. Addressing vulnerability to climate change and natural disasters will help Bangladesh to continue to build resilience to future shocks. Pivoting towards green growth would support the sustainability of development outcomes for the next generation. |
| Since the country’s independence, the World Bank has been a longstanding partner of Bangladesh. Since then, the World Bank through its concessional lending arm—the International Development Association (IDA)—has committed over $39.5 billion in grants, interest-free and concessional financing credits to Bangladesh. Currently, with a total IDA commitment standing at $16.4 billion for 57 ongoing projects, Bangladesh has the largest IDA program globally. The World Bank has also been the largest external funder of Bangladesh, providing over a quarter of all foreign aid to the country. |
| Through a robust program of technical, analytical, and financial support, the World Bank Group is supporting Bangladesh towards its vision of becoming an upper-middle-income country by 2031. This includes supporting the government’s efforts in economic development and growth, power, infrastructure, disaster management, climate change, agriculture, human and social development, and poverty reduction. |
| The Country Partnership Framework (CPF) for FY 2023-2027, anchored in the government’s eighth Five Year Plan and the Long-Term Perspective Plan 2021–2041, aims to support Bangladesh’s goal to achieve upper-middle-income country status by 2031 by helping the country to address key barriers to higher and sustainable growth. It will help develop a diversified and competitive private sector to create more and better jobs; promote socioeconomic inclusion to expand opportunities for all; and address climate and environmental vulnerabilities. These three outcomes are key priorities for Bangladesh’s growth aspirations. |
| Guided by these priorities, the CPF proposes a robust program of technical and financial support focusing on eight objectives—improved business environment for broad-based private sector development; strengthened financial intermediation for long-term growth and resilience; improved effectiveness of public institutions to deliver better services; improved quality and equitable access for human capital development services; enhanced economic opportunities for women and vulnerable groups; strengthened spatial and digital connectivity for inclusive growth; improved effectiveness of delta management for accelerated climate resilience building and sustainability; and productivity in the use of natural capital for green growth and energy transition. |
| For the full document click the link below: |
| Bangladesh: Bangladesh’s Inspiring Rise On Track to Become an Upper-Middle-Income Country by 2031 |
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