Bangladesh economy: In charts: Hasina’s Bangladesh stitched a blistering growth story that ended her rule

Bangladesh, seen as a rising success story in the South Asian subcontinent in recent decades, took a turn for the worse when student protests toppled Sheikh Hasina’s government in early August. Apart from political discontent, economic discontent also played a role in the destabilization of Hasina’s government.

Bangladesh now has a new interim government. Nobel laureate Muhammad Yunus was sworn in and his interim cabinet was formed with 16 members from civil society, including two student protest leaders, following the president’s dissolution of parliament. The new cabinet members were selected after discussions between student leaders, civil society representatives and the military.

In the short term, the country must restore order and stabilize its economy. In the long term, Bangladesh must address the broader economic issues that initially drove the protesters to the streets.

Bangladesh’s Economy: A Story of High Reliability

Beginning in the 1970s, Bangladesh embarked on economic reforms, and the garment industry became a major sector for decades. Since coming to power in 2009, Hasina has significantly driven the country’s growth by focusing on the industry, expanding into new global markets.

The affordability of Bangladeshi clothing attracts international retailers, particularly fast-fashion brands such as Zara and H&M. This demand not only created millions of jobs, primarily for women, but also improved living standards. Hasina invested heavily in infrastructure, giving international companies confidence in their ability to meet their needs.

Garment exports drive more than 80% of the country’s revenue.

Bangladesh’s economy, in numbers

Even retail inflation fell below 6 percent after 2016, having seen a steady 6 percent growth between 2011-19. Bangladesh’s GDP per capita doubled from $1,032 in 2011 to $2,154 in 2019. Then, the Covid-19 pandemic hit. The textile-export powerhouse has been badly hit by the Covid-19 pandemic.

Even after recovering from the Covid-19 pandemic, Bangladesh’s growth rate is expected to remain below 6 percent in 2024. The country faces additional economic challenges, including inflation exceeding 9 percent and a devalued currency, the Dhaka. This demonetization reduced per capita income in dollar terms and contributed to the depletion of foreign exchange reserves. Reports also highlighted significant unemployment, all of which contributed to youth unrest and the eventual end of the Hasina regime.

Bangladesh’s GDP per capita is moderate, so is its growth rate and overall economic size. The country has failed to diversify its development options and is heavily dependent on textiles.

Its exports are expected to triple from $15.1 billion in 2009 to $54.7 billion in 2022. The share of textiles and clothing in its overall exports increased from 84.7% in 2009 to 87.5% in 2022. This over-confidence caused the trade deficit to affect the value of its currency. , leading to a devaluation of the Dhaka against the US dollar.