economic growth of Bangladesh
Suffice it to say that Economic growth is the indicator of the growth of annual income of a country.
The rate of economic growth of a country is the percentage annual change in
national income. In case of Bangladesh economy where mixed economic system
is prevailing, national output in 1994/95 was valued at Tk.117026 crore (27.53
billion US Dollar) and in 1995/96 it was Tk. 130160 crore (30.62 billion US
Dollar). Output grew in value by Tk.13134 crore that gives a nominal growth
rate between 1994/95 and 1995/96 of 11.1%. On the other hand, this is not the
real change in growth because living standards will only be improved by real
changes in output. Some of 11.1%
increase in output might be due to inflation. If the inflation rate over the
period was 4.1% then the real increase in the value of output was 7%. Given the
population growth in the country X is 2.17%, this implies that the real value
of output per head grew by 4.83 %(7%-2.17%).
The potential economic growth rate is the rate of growth
achievable if all wealth were fully employed and used resourcefully. It is the highest
rate at which the economy of a country could nurture. Prospective growth will
be exaggerated by any change in resources – natural resources, labor or
Bangladesh is an agriculture-based
overpopulated developing country. Political instability, natural calamities,
poverty and illiteracy are the common feature of Bangladesh. Following table shows the general
Population Growth Rate
147570 Sq. K.M.
GDP(at current market value)
Tk.140258 crore (1996-97)
Rate of Savings (Domestic)
Total Rate of investment
ADP financing by domestic resources
With poor natural resources
and high unemployment rate Bangladesh is trying to improve its economic condition. For
financing Annual Development Programme (ADP) it has to depend on foreign loans,
debts and grants, which are about 52%. Still Bangladesh has been experiencing steady economic growth since
its independence in 1971. Bangladesh was heavily dependent on agricultural sector.
1973/74 contribution of agricultural sector to GDP was 48.3% where in 1996/97
it was about 32.4%. However industrial sector does not grow as expected. Its
contribution remains almost same, as it was 11.1% in 1973/74. Political
instability and inconsistent economic and industrial policy might have the
consequent reasons. Other professional
and commercial service sectors are rising from 36% to about 50%. Rural people living below poverty level were
73% in 1973/74. It falls to 50% in 1991/92. Infant mortality rate fell from 154
per thousand in 1970s to 80 per thousand in 1990s. Females that were ideal are
coming to the garments industry. About one million females are now working in
the garments industry. Per catia income rises from Tk.3066 in 1980/84 to
Tk.11284 in 1996/97.
The following table and
graph show the economic growth of Bangladesh over recent seven years.
Rate of Growth of Gross
Growth Rate of
Table: Growth rate of GDP (Valued at price 0f 194/85)
From aforementioned table
and chart, it is evident that Bangladesh has been practicing a considerable economic growth
over the past years. The growth rate given here is adjusted with the inflation
rate. Actually, a country’s national
economic growth depends on annual demand where savings, government spending as
well the trend and overall position of surplus. Such surplus depend on the
difference between balance of export and import. Export done more in a year, the nature of consumer price index becomes positive and inflation rate may prevail
in favourable side.