ASSIGNMENT NO- 01

INTRODUCTION TO THE ECONOMY OF BANGLADESH

COURSE CODE AEP-321(T)

COURSE TITLE Economy of Bangladesh (Theory)

ASSIGNED DATE SUBMISSION DATE

5 11 2024 11 11 2024

SUBMITTED TO SUBMITTED BY

Ms. Bibi Marium GROUP- B

Assistant Professor ID NO: 2104016, 2104017, 2104018, 2104019,
2104020, 2104021, 2104022, 2104023, 2104024,
Department of Agricultural Economics and 2104027, 2004007
Policy
SESSION: 2020-21
Faculty of Agricultural Economics and
Business Studies B.Sc. Ag. Econ. (Hons.)
Sylhet Agricultural University, Sylhet-3100 Level:03; Semester: 02
Faculty of Agricultural Economics and Business
Studies

Sylhet Agricultural University, Sylhet-3100

 Assignment No: 01 Name of the Assignment: Page No.

Date: INTRODUCTION TO THE ECONOMY OF 1

BANGLADESH
5/11/2024
Introduction:
Bangladesh, a country located in South Asia, has seen significant economic growth in recent
decades, emerging as one of the world's fastest-growing economies. Despite challenges such as high
population density, poverty, and vulnerability to climate change, the country has made impressive
strides in development. The market-based economy of Bangladesh is the 35th largest in the world
in nominal terms and 25th largest by purchasing power parity. It is classified among the eleven
emerging market middle income economies and a frontier market. Dhaka and [rr1] Chattogram are
the principal financial centers of the country, being home to Dhaka Stock Exchange and the
Chattogram Stock Exchange. The financial sector of Bangladesh is the second largest in the
subcontinent.
According to the IMF, Bangladesh’s GDP is projected to grow by 4.5 % in the fiscal year 2024-25.
This is a decrease from the forecast of 6.6 %. It generates 60 % in global growth, more than its share
in global GDP of about 40%. The IMF also projects that inflation will remain high at around 9.4 %
in 2024, but will decrease to about 7.2 % in 2025. The country has pursued export – oriented
industrialization.
Bangladesh’s per capita income in 2024 is estimated to be between $2624 and $2846.76. Bangladesh
is a member of the D-8 Organization for Economic cooperation, the South Asian Association for
Regional cooperation, the International Monetary Fund, the World Bank, the World Trade
Organization and the Asian Infrastructure Investment Bank. The economy faces challenges of
infrastructure bottlenecks, insufficient power and gas supplies, bureaucratic corruption, political
instability, natural calamities and a lack of skilled workers.
Economic Sectors of Bangladesh:
The economy of Bangladesh has been expanding and diversifying over the past several years due
to the ongoing acceleration of the economic wheel in a number of financial and economic activities.
The three fundamental sectors that make up Bangladesh's economy are agriculture, industry, and
services. Agriculture is regarded as the economy's central sector. But while economic activity
continues to grow, the agricultural sector's share of the total is gradually diminishing. Bangladesh's
political unrest and infrastructural shortcomings prevented industry from developing significantly
more effectively. The service sector contributes significantly to the GDP and to the employment
share in Bangladesh, researchers and economists are becoming very much concerned about this
sector and its growth effect. The manufacturing sector is a significant contributor to Bangladesh's
economy, contributing to the country's GDP and exports.
Table 1 shows the contributions of various sectors, including agriculture, industry, services, and
manufacturing, which are 6%, 41.7%, 49.2%, and 27.2% respectively. The agriculture sector's GDP
contribution in 2023 was 3,479.70 million BDT, up from 3,391.30 million BDT in 2022. The
country's agricultural goods include rice, wheat, corn, beans, fruits, vegetables, meat, fish, seafood,
and dairy products.
 Assignment No: 01 Name of the Assignment: Page No.

Date: INTRODUCTION TO THE ECONOMY OF 2

BANGLADESH
5/11/2024
Table 1: Contribution of different sectors to GDP in FY 2024
Sectors Contribution in percentage (%)
Agriculture 6%
Industry 41.7%
Service 49.2%
Manufacturing 27.2%
Agriculture sector consists of four subsectors- Crops, fisheries, livestock and forestry. These
subsectors contribute to the country’s GDP and exports.
The crop sector plays a significant role in Bangladesh's agriculture, contributing to the country's
GDP, employment, and food security. The ministry of agriculture has set a target of producing 44.66
million metric ton (MMT) of food grains for FY2023-24. The specific targets for each crop are -
Aus (3.98 MMT), Aman (17.18 MMT), Boro (22.27 MMT) and Wheat (1.23 MMT).
Bangladesh's fishing sector benefits the economy in a variety of ways, including GDP, foreign
exchange profits, employment, animal protein, rural employment, and poverty reduction.
Bangladesh's fishery exports have recently increased, rising from $376.71 million in 2000-01 to
$601.59 million in 2021-22. In fiscal year (FY) 2023, the fisheries sector contributed 2.41% of
Bangladesh's GDP, down from 2.70% in FY 2019. Shrimp exports are likely to expand in the future
due to their high value.
Livestock contributes 1.80% of GDP in FY2024. In addition, the livestock sector in Bangladesh has
benefited the country's economy in a variety of ways, including increased output, employment, and
socioeconomic growth. Between 2022 and 2023, Bangladesh's meat output climbed to 8.71 million
tons, milk production to 14.07 million tons, and egg production to 23,376 million.
Finally, the forestry sector provided 3% of the country's GDP and employed 2% of its workforce.
Bangladesh's yearly state forest production is approximately 440,000 m3 of lumber, 800,000 m3 of
fuel wood, and 90 million pieces of bamboo. Bangladesh's main forest products include lumber,
poles, fire wood, bamboo, thatch grasses, and cane.
Export and Import Sectors in Bangladesh:
Bangladesh has made notable advancements in its import and export industries, with a focus on
diversification and adapting to economic obstacles. The Ready-Made Garment (RMG) industry
remains the key driver, accounting for more than 80% of all exports. However, the country has
implemented policies to diversify its exports, concentrating on 14 core sectors, such as electronics,
leather goods, plastic products, medicines, and jute products. These sectors aim to reduce reliance
on textiles and expand into high-potential industries. In the first half of the 2023–2024 fiscal year,
Bangladesh’s exports totaled $27.54 billion. The leading destinations for Bangladesh's exports
include the United States, Germany, and the United Kingdom.
 Assignment No: 01 Name of the Assignment: Page No.

Date: INTRODUCTION TO THE ECONOMY OF 3

BANGLADESH
5/11/2024
Bangladesh imports a significant amount of food, equipment, chemicals, petroleum, and textiles,
particularly raw materials for the RMG industry. In FY 2023–2024, imports decreased by around
18%, totaling $33.68 billion, partly due to economic pressure to correct trade imbalances and
regulatory actions.
Key Export Sectors and Goods:
1. Textiles and Ready-Made Garments (RMG): The RMG sector accounts for around 80%
of Bangladesh’s total exports. Major items include denim, woven clothing, and knitwear.
Main Export Destinations: United States, European Union, Canada.
2. Jute and Jute Products: Bangladesh is one of the leading global producers of jute. The
country exports jute yarn, raw jute, and finished products such as bags, carpets, and textiles.
Main Export Destinations: Turkey, India, and European nations.
3. Leather and Leather Products: Bangladesh exports a variety of leather goods, such as
shoes, bags, and accessories.
Main Export Destinations: United States, Japan, and Europe.
4. Agriculture and Frozen Foods: Key agricultural exports include frozen seafood (prawns,
fish), vegetables, and spices. Bangladesh also exports tea and tropical fruits.
Main Export Destinations: Middle East, Japan, and European countries.
5. Pharmaceuticals: Bangladesh’s pharmaceutical industry is expanding rapidly, exporting
generic medications to over 150 countries in Asia, Africa, and Latin America.
Key Import Sectors and Goods:
1. Machinery and Equipment: Bangladesh imports machinery, industrial tools, electrical
equipment, and packing equipment for its manufacturing and textile industries.
Main Suppliers: China, India, and Japan.
2. Textile Raw Materials: The country imports essential materials for the textile industry,
including yarn, dyes, chemicals, and raw cotton.
Main Suppliers: United States, Central Asian nations, and India.
3. Petroleum and Fuel Products: To support the transportation and industrial sectors,
Bangladesh imports crude oil and refined petroleum products.
Main Suppliers: Middle Eastern countries.
4. Consumer Goods and Staple Commodities: Key imports include edible oils, sugar, dairy
products, wheat, and rice. Additionally, medical supplies, cars, and technology are among
other significant imports.
Employment Sectors in Bangladesh:
The employment sector in Bangladesh plays a crucial role in the nation's economic growth. A large
portion of the population is engaged in agriculture, industry, and services, with each sector providing
 Assignment No: 01 Name of the Assignment: Page No.

Date: INTRODUCTION TO THE ECONOMY OF 4

BANGLADESH
5/11/2024
varying levels of employment opportunities. While agriculture remains the largest employer, other
sectors like industry and services are rapidly growing, diversifying the economy.
1. Agriculture: Agriculture remains the backbone of Bangladesh's economy, though its share
of GDP has declined in recent years. It continues to employ around 40-45% of the workforce,
including those in farming, fishing, and forestry. The sector contributes 13-15% to GDP,
with key products like rice, jute, tea, vegetables, fruits, and fish. Although agriculture's
contribution to GDP is shrinking, it is still vital for employment.
2. Industry: The industrial sector, primarily driven by textiles and garments, has grown
rapidly, contributing 30-35% to GDP. The RMG industry remains the largest export earner.
Around 20-25% of the workforce is employed in industry, with a significant portion in
garment manufacturing. Other important industries include textiles, cement, chemicals, and
shipbuilding.
3. Services: The services sector has expanded significantly, now contributing more to GDP
than both agriculture and industry, at 50-55%. It employs around 30-35% of the workforce,
with many in education, healthcare, finance, and IT. Key areas include retail trade, banking,
telecommunications, transport, and health services.
4. Construction: The construction sector has experienced growth, fueled by urbanization and
infrastructure development. It contributes 8-10% to GDP and employs 7-10% of the
workforce, mostly in residential real estate, commercial projects, and public infrastructure
like roads and bridges.
5. Transport and Communication: The transport and communication sector is vital for trade
and movement, contributing 6-8% to GDP. It provides employment in logistics, truck
driving, railways, and shipping, supporting the country's infrastructure.
6. Financial Services: The financial sector, including banking, microfinance, and insurance,
contributes around 4-6% to GDP. It supports economic growth and provides employment in
financial institutions and related services.
7. Information Technology (IT): The IT sector is growing rapidly, contributing about 1-2%
to GDP. It employs professionals in software development, IT outsourcing, and digital
services, with increasing exports of software and IT-enabled services.
8. Tourism: Tourism contributes around 2-3% to GDP, with potential for growth due to
Bangladesh’s cultural and natural heritage. It provides employment in hospitality, travel
agencies, and airlines.
Women’s Contribution to Bangladesh Economy:
Women in Bangladesh play a pivotal role across various economic sectors, from garments to
agriculture and beyond. Their contributions drive income growth, social progress, and gender
equality, making them essential to the nation’s development. However, barriers remain, highlighting
the need for further empowerment and policy support.
1. Ready-Made Garment (RMG) Sector: The RMG sector is central to Bangladesh's
economy, contributing over 80% of total export earnings. Women make up 80-85% of this
workforce, increasing household incomes, lifting families out of poverty, and driving social
changes like delayed marriage and greater female workforce participation.
 Assignment No: 01 Name of the Assignment: Page No.

Date: INTRODUCTION TO THE ECONOMY OF 5

BANGLADESH
5/11/2024
2. Agriculture: Women play a crucial role in agriculture, especially in subsistence farming,
poultry, livestock, and fisheries. Despite often being unpaid or unrecognized, their
contributions are essential for rural economy stability, household nutrition, and food
security.
3. Entrepreneurship and Microfinance: Institutions like Grameen Bank and BRAC provide
microloans to women, helping them start businesses and boost their confidence. This
financial inclusion fosters job creation, economic growth, and enhances women's
participation in the economy.
4. Education and Healthcare Sectors: Female educators play a significant role in raising
literacy rates, especially at primary and secondary levels. In healthcare, women serve as
nurses, community health workers, and midwives, contributing to improved public health
outcomes.
5. Technology and Service Sectors: Digital literacy programs have empowered women in IT,
e-commerce, and freelancing. Women also contribute significantly to the banking,
telecommunications, and customer service sectors, enhancing economic diversity.
Challenges and Opportunities: Despite their economic contributions, women face challenges such
as sociocultural restrictions, wage inequality, and limited leadership roles. Addressing these issues
through education, gender equality initiatives, and skill development can further empower the
female workforce.
Impact on Socioeconomic Development: Women's economic involvement boosts household
income, improves health and education, reduces poverty, and fosters socioeconomic progress. Their
contributions promote literacy, reduce infant mortality, and encourage family welfare, challenging
gender norms and advancing equality.

Problems and Prospects of Bangladesh Economy:

Bangladesh's economy is marked by impressive growth and progress, yet it also faces significant
challenges that could impact its long-term stability. By examining both the obstacles and
opportunities, a clearer picture of the nation's economic trajectory emerges, offering insight into
pathways for sustainable development.
Problems:
• Poverty and Inequality: Despite growth, poverty remains a critical issue, with a significant
portion of the population living below the poverty line. Income inequality is also substantial,
with wealth concentrated among a small fraction of society.
• Unemployment and Underemployment: High unemployment, particularly among youth
and women, presents a pressing concern. Additionally, many individuals are
underemployed, working in low-paying or part-time jobs that do not provide adequate
income or hours.
• Infrastructure Deficiencies: Bangladesh faces infrastructure limitations in transportation,
energy, and sanitation, which restrict economic progress. Power outages and poorly
 Assignment No: 01 Name of the Assignment: Page No.

Date: INTRODUCTION TO THE ECONOMY OF 6

BANGLADESH
5/11/2024
maintained roads hinder business operations and deter foreign investment.
• Natural Disasters and Climate Change: Bangladesh is highly vulnerable to natural
disasters such as floods and cyclones, which damage infrastructure, disrupt livelihoods, and
present long-term challenges for agriculture and rural communities. Climate change
intensifies these risks, threatening economic stability.
• Political Instability and Governance Issues: Political unrest and governance issues create
an unpredictable business environment, reducing investor confidence and hampering
economic growth.
• Dependence on the Garment Sector: The garment industry accounts for a large share of
Bangladesh’s exports, creating reliance on a single sector. This dependence makes the
economy susceptible to global market fluctuations and changing consumer trends.
• Education and Skill Gaps: Although literacy rates have improved, a gap remains between
the skills taught and those needed in the labor market. This skills mismatch limits
productivity in key industries.

Prospects:

• Economic Growth Potential: Robust growth in the garment sector, remittances, and
agriculture drives Bangladesh’s economy. Continued investment in these areas could sustain
economic momentum.
• Demographic Dividend: With a young population, Bangladesh has the opportunity to
capitalize on its demographic dividend by investing in education and skill development to
prepare youth for the job market.
• Diversification of Industries: Efforts to expand into pharmaceuticals, information
technology, and renewable energy can reduce reliance on textiles and enhance economic
resilience.
• Infrastructure Development Initiatives: Government and foreign investment in
infrastructure aims to improve transportation, energy, and trade connectivity, supporting
economic growth.
• Global Market Integration: Integration through trade agreements and partnerships can
expand export markets and attract foreign direct investment, enhancing growth potential.
• Sustainable Development Goals (SDGs): Commitment to SDGs supports inclusive
growth, social equity, and environmental sustainability, benefiting the overall economy.
• Remittance Growth: Steady remittances from overseas workers contribute to domestic
consumption and investment, helping stabilize the economy against external shocks.
 References
Azran, A. (2024). The rapid growth of Bangladesh’s economy, and what comes after. Dhaka:
Thedailystar.
Biswas, Shekhar, & Choudhury, J. (2007). Forest and Forestry in Bangladesh: the question of
sustainability. International Forestry Review, 7-8.
Contributor, W. (2024, 07 05). Econpmy of Bangladesh, Wikipedia. Retrieved from Wikipedia:
https://en.wikipedia.org/wiki/Economy_of_Bangladesh#
Md. Mostafa Shamsuzzaman, M. M. (2020). The economic contribution of fish and fish trade in
Bangladesh,. Sciencedirect, 174-181. doi:https://doi.org/10.1016/j.aaf.2020.01.001.
Mujeri, M. K. (2021, January 6). Women's economic empowerment and future development of
Bangladesh. Retrieved from The Financial Express:
https://thefinancialexpress.com.bd/views/views/womens-economic-empowerment-and-
future-development-of-bangladesh-1609856560