According to 2017 International Monetary Fund data, Bangladesh is the 44th-largest economy based on nominal gross domestic product (GDP), which evaluates market prices, and 32nd-largest economy based on purchasing power parity (PPP), which compares the prices of like consumer goods among countries.
With a population of around 163 million, Bangladesh ranks 148th in the world based on nominal GDP per capita and 140th based on GDP by PPP per capita. These measures divide nominal GDP and GDP by PPP by the country’s population.
What should I know about nominal GDP and PPP?Among the multiple ways that economists measure a country’s economic strength, nominal GDP and PPP are two of the most common.
Nominal GDP is based on official government estimates and depends on exchange rates between two countries, typically using the US dollar for one of the denominations. It’s useful for measuring financial flows between countries. But because it doesn’t consider differences in cost of living, it can distort per capita income estimates.
PPP, on the other hand, considers the relative cost of local goods, services and inflation rates — all factors considered to reflect a country’s domestic market. Because PPP compares the costs of a common “basket of goods” — some 3,000 consumer goods that include food, fuel and insurance — it’s considered a more ideal way to project per capita income projections and gauge poverty thresholds.
Bangladesh’s official currency is the Bangladeshi taka (BDT). This currency has recently fluctuated between 82.9 and 84 BDT against the US dollar.
Bangladesh is among the world’s fastest-growing economies, due largely to its focus on exporting much of its industrial output. Industry accounted for almost 30% of GDP and employed 30% of the workforce in 2013.
Major industries in Bangladesh include:
- Leather footwear
- Pharmaceutical products
- Paper and plastic products
- Food and beverages
- Natural gas and crude petroleum
- Iron and steel
Agriculture accounted for around 15% of GDP and employed 40% of the workforce in 2013. Rice, jute, maize, wheat, and vegetables are among Bangladesh’s top agricultural products. Food-grain production has increased in recent years, helped along by numerous flood control projects, more irrigation projects, better fertilizer use and improved distribution networks.
The services sector accounted for around 30% of GDP and employed 57% of the workforce in 2013. Bangladesh enjoys a reputation as a major source for information and communication technology (ICT) professionals, a result of the government’s focus on creating a skilled ICT workforce.
Remittances from Bangladeshis abroad to families back home reached almost $15 billion in 2015, making the country one of the world’s biggest beneficiaries in terms of earnings from citizens working abroad.
As of 2016, an estimated 4.18% of the population was unemployed.
Major contributors to the economy
Bangladesh is a member of the World Trade Organization, D-8 Organization for Economic Cooperation, South Asian Free Trade Area, Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, Asian Infrastructure Investment Bank and the Commonwealth of Nations.
Bangladesh’s top trading partners include China, the EU, the US, India, Singapore, Hong Kong, Canada and Japan.
The country’s top exports include:
- Non–knit clothing
- Knit or crochet clothing
- Other textiles and worn clothing
- Paper, yarn and woven fabric
Its major imports include:
- Machines, engines and pumps
- Electronic equipment
- Iron and steel
Bangladesh averaged a 6.5% GDP growth rate from 2004 onward as exports, remittances and domestic agriculture boomed. The country’s GDP growth rate peaked at 7.1% in 2016, and experts forecast economic growth to continue in the immediate future.
The sustained economic growth has allowed Bangladesh to drastically reduce poverty levels to just 12.9% in 2016 from a high of around 44% in 1991. However, poverty remains a problem, the country home to some 28 million impoverished Bangladeshis.
Structural reforms are needed to make the country’s business climate more attractive to foreign investors and reduce poverty levels to single digits. Improving the country’s energy and transport infrastructure, strengthening human capital programs, encouraging more women to join the workforce and raising economic productivity even further could sustain long-term economic growth.