Changing economic conditions in Bangladesh

At the start of the 2010s, Bangladesh experienced significant inflationary pressure, with inflation reaching 10.9% in 2011. This rapid increase in the general price level eroded the purchasing power of Bangladeshi households' disposable incomes, reducing private consumer spending. It also harmed the relative price competitiveness of the nation's exports, leading to a decline in net demand from abroad.

By the end of the decade, the inflation rate had stabilized at around 5.6% in 2019 and 5.7% in 2020. Relative export prices had also adjusted, helping to support domestic industries.

To sustain long-term economic growth, the government has significantly increased its domestic spending on public infrastructure, primary healthcare, and education. It has also received financial development aid from the Asian Development Bank (ADB) to fund large-scale transport networks. Fig. 1 shows the ADB aid per capita received by six Asian countries and their GDP per capita in 2021 as index figures.

Fig. 1: Index figures for ADB Assistance per capita and GDP per capita 2021

This rise in government spending has stimulated domestic business investment, although its long-term impact on the country's national debt and trade balance remains a point of debate among economists.

Map of Bangladesh showing major international trading routes, highlighting key destination nations for clothing exports (such as the USA and Germany) and key source nations for raw industrial materials (such as China and India).