Overview

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 6.3 percent between 2010 and 2023. Poverty in Bangladesh has declined from 14.7 percent in 2010 to 5.9 percent in 2022, based on the international poverty line of $3.00 USD per person per day (using 2021 Purchasing Power Parity). 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  challenges in recent years. Real GDP growth is estimated to have moderated marginally to 4.0 percent in FY25 from 4.2 percent in FY24. Despite recent moderation, inflation has remained elevated, financial sector vulnerabilities have worsened, and investment growth slowed. 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 labor 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.

Last Updated: Oct 23, 2025

Additional Resources

Country Office Contacts

Plot E 32
Sher-e-Bangla Nagar,
Agargaon, Dhaka 1207,
Bangladesh
(880-2) 5566-7777