GDP Growth Target May Be Cut to 5.25%

Unpaid household labor, predominantly carried out by women, remains excluded from GDP calculations despite its immense economic value. Women in Bangladesh spend seven times more time on unpaid labor than men, dedicating 24.5% of their daily hours to household and caregiving tasks.

Bangladesh has one of the lowest tax-to-GDP ratios globally, even lower than Nepal and war-torn countries like Afghanistan and Pakistan. In 2023, Bangladesh’s tax-to-GDP ratio was 8.21%, ranking as the fourth lowest worldwide, with only Sudan, Yemen, and Haiti having lower figures.

Bangladesh's GDP is projected to exceed $500 billion for the first time in FY2025-26, reaching $517.7 billion (Tk 6,315,923 crore), according to the finance ministry. The initial estimate for FY2024-25 was $491 billion but is expected to be revised downward to $470 billion.

Bangladesh’s GDP growth for FY24 was revised down to 4.22% from the preliminary estimate of 5.82%, primarily due to a sharp decline in industrial output and lower-than-expected export earnings. The industrial sector’s growth was cut to 3.51% from 6.66% after export growth, initially projected at 12.21%, was revised to a decline of 21.07%.

Bangladesh's GDP growth target for the current fiscal year may be revised down to 5.25% from the original 6.75%, driven by multiple floods and a contractionary monetary policy aimed at curbing inflation. The ADB has lowered its projection to 5.1% due to supply chain disruptions from political unrest, while the World Bank reduced its forecast by 1.7 percentage points to 4%, citing uncertainties and data limitations.

Bangladesh's economic unit growth slowed to 52% from 110% in the last decade due to capital shortages, especially in rural areas. The number of economic units reached 1.18 crore in 2024, with rural growth declining to 49% from 141%. Urban growth remained stagnant at 58.38%.