Bangladesh

Since independence, Bangladesh has made remarkable progress. From one of the poorest countries in 1971, it reached lower-middle-income status within four decades and is now among the world’s fastest-growing economies.

Human development and women’s empowerment have been central to this strategy. Bangladesh is among the first developing countries to achieve gender parity in school enrollment. Average life expectancy rose from 46.5 years in 1972 to over 70 today. Nearly all households now have electricity. Thousands of rural women work in the textile sector, making Bangladesh the world’s second-largest exporter of ready-made garments. The country is also a leader in climate adaptation and disaster preparedness, reducing cyclone-related fatalities 100-fold since 1970.

Despite these gains, significant challenges remain. Bangladesh is highly vulnerable to climate change and natural disasters such as floods and cyclones. Institutional weaknesses persist, with scope to improve public service delivery. The economy must diversify, the private sector needs to deepen, and continued investment in human capital and climate resilience is essential. Urgent, far-reaching reforms are needed to create quality jobs for the two million youth entering the labor market each year and to ensure inclusive growth.

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Bangladesh averaged 6.0 percent GDP growth over the past decade, but that growth momentum has weakened over the past three years. Services continue to account for over half of GDP, followed by industry (34.9 percent) and agriculture (11.7 percent). National poverty is estimated to have increased for a third consecutive year, increasing from 18.7 percent in 2022 to 21.4 percent in 2025. After rising in 2023 and 2024, inequality is estimated to have eased slightly in 2025.

Bangladesh faces a challenging near-term outlook marked by weak growth, high inflation, elevated poverty, and financial sector stress. The World Bank projects GDP growth to remain subdued at 3.9 percent in FY26 and rise gradually to reach 5.3 percent in FY28. Poverty is also projected to decline from 20.9 percent in 2026 to 19.3 percent in 2028, though it would remain above its 2022 level. The conflict in the Middle East poses significant macroeconomic risks for Bangladesh, compounding pre‑existing domestic vulnerabilities. In the medium term, growth prospects remain constrained by financial sector weaknesses and poor domestic revenue mobilization, although a gradual recovery in private and public investment is expected to provide some support.

To stay on an inclusive, sustainable growth path, a focused set of short-term priorities is needed to stabilize the economy and lay the groundwork for structural reform. Structural reform should focus on strengthening the financial sector, improving the business environment, enhancing domestic revenue mobilization, diversifying exports, and creating jobs for its large youth population.

Last Updated on 28 April 2025

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Bangladesh’s growth and development story is inspiring, and the World Bank Group has been a close partner from the start. Over more than 50 years, this partnership has helped millions escape poverty and lead better lives.

Through its concessional arm—the International Development Association (IDA)—the World Bank Group has committed over $45 billion in grants, interest-free credits, and concessional financing to support Bangladesh’s sustainable development. With $14.08 billion across 50 ongoing projects, Bangladesh has one of the largest IDA programs globally. The World Bank is also the country’s largest external funder, providing over a quarter of all foreign aid.

In FY25, the World Bank Group’s private sector arm, IFC, made a record $2 billion commitment, and MIGA’s gross outstanding exposure stood at $854 million.

Through robust technical, analytical, and financial support, the World Bank Group is helping Bangladesh realize its vision of becoming an upper-middle-income country. This includes support for job creation, economic growth, power, infrastructure, disaster management, climate change, agriculture, human and social development, and poverty reduction.

Since 1981, IFC has invested more than $11 billion in long-term finance in Bangladesh, focusing on private sector growth across finance, power, manufacturing, agribusiness, and infrastructure. IFC’s pioneering efforts include supporting the first independent power producer and co-developing and financing the first LNG import terminal. IFC also provides trade finance; in FY25 alone, trade finance volume was approximately $1.5 billion.

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The World Bank Group’s Country Partnership Framework (CPF) for Bangladesh for FY2023–2027 supports the country’s ambition to achieve upper-middle-income status. Anchored in Bangladesh’s own development priorities, the CPF tackles key barriers to sustainable and inclusive growth by: developing a more diversified and competitive private sector to create more and better jobs; promoting socioeconomic inclusion to expand opportunities for all; and addressing climate and environmental vulnerabilities—three priorities central to Bangladesh’s growth aspirations.

Guided by these priorities, the CPF outlines a robust program of technical, analytical, and financial support across eight objectives: improving the business environment for broad-based private sector development; strengthening financial intermediation for long-term growth and resilience; enhancing the effectiveness of public institutions to deliver better services; improving quality and equitable access to human capital development services; expanding economic opportunities for women and vulnerable groups; strengthening spatial and digital connectivity for inclusive growth; improving delta management to accelerate climate resilience and sustainability; and boosting productivity in the use of natural capital to advance green growth and the energy transition.

The International Finance Corporation (IFC) plays a pivotal role in advancing these goals by enabling and mobilizing private investment and fostering private sector–led solutions. Its work includes expanding access to finance for SMEs, developing critical power infrastructure, and catalyzing sustainable investments for job creation—directly contributing to the CPF’s objectives on private sector development, resilience, and green growth.

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The World Bank has provided robust support to Bangladesh across multiple sectors.

Health outcomes have improved significantly: maternal mortality fell from 574 to 153 per 100,000 live births (1990–2022); under-five mortality from 273 to 31 per 1,000; and stunting from 63% to 24%.

In response to COVID-19, $600 million in financing helped vaccinate nearly half the population and equip hospitals with oxygen systems, ventilators, ICU units, and other essential services.

In education, the World Bank supports primary through tertiary levels and technical training. In 2023, net primary enrollment reached 93.1% and lower secondary 76.3%, with higher enrollment for girls than boys.

The World Bank currently has $1.45 billion in ongoing energy support to expand capacity, generate clean energy, and improve efficiency in generation, transmission, and system operation. IDA support has added 2,634 MW to the national grid and 185 MW through renewables, including solar home systems, solar irrigation pumps, solar mini-grids, and grid-tied rooftop solar.

With agriculture employing nearly half the population, World Bank projects support two million farm households and small and medium agro-entrepreneurs to improve livestock production sustainably, increase productivity, and enhance market access.

To address disasters and climate risks, $1.4 billion from the World Bank has strengthened resilience for about 6.7 million people through shelters, roads, embankments, protective infrastructure, and afforestation. Environmental initiatives and ongoing projects have improved 255,000 hectares of forest and supported 2.4 million forest-dependent people across 34 districts.

Water and sanitation projects have provided safe water to over 1.2 million people and improved sanitation for 3.3 million. World Bank–supported governance reforms include the e-GP system, which saved the government over $500 million (2012–2016) and, through efficiency gains, contributed an estimated 0.5% to GDP in 2019.

Social protection programs reached 14.4 million beneficiaries. World Bank financing supported digital payments for 12 million vulnerable people; income support and early childhood development services for over 1.8 million pregnant women and young mothers; economic inclusion support for over 225,000 youth and microentrepreneurs and 200,000 returnee migrants; and assistance for Rohingya refugees. These efforts also helped build shock-responsive capacity in flagship public works and unconditional cash transfer programs.

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