Economic growth to hit lowest in five years amid per capita income hits record $2,820FY25 GDP growth falls to 3.97pc: BBS estimate

Bangladesh's economy has grown by just 3.97% in the ongoing 2024-25 fiscal year (FY25), according to provisional estimates released on Tuesday by the Bangladesh Bureau of Statistics (BBS).

This marks the lowest growth rate since the COVID-affected fiscal year 2019-20, when GDP growth stood at 3.45%, and the estimate is almost close to the projection by the International Monetary Fund's (IMF) 3.8% for the year.

The BBS report also provides a sector-wise breakdown of GDP performance. The agriculture sector experienced a marked decline, with growth falling to 1.79% in FY25 from 3.30% in FY24 – a decrease of 1.51 percentage points.

Conversely, the industrial sector improved, posting 4.34% growth compared to 3.51% the year before, a gain of 0.83 percentage points. The services sector registered a slowdown as well, growing at 4.51% in FY25, down from 5.09% in the previous fiscal year.

Broader economic indicators also point to mixed trends. Investment as a share of GDP declined by 1.32 percentage points in FY25. Domestic savings fell by 0.71 percentage points, although national savings increased modestly by 0.59 percentage points – suggesting a slight rebound in overall saving behaviour within the economy.

Despite the slowdown, the country’s per capita income, however, reached an all-time high of $2,820. This represents an $82 increase from the previous fiscal year's figure of $2,738.

The BBS attributes the rise in per capita income partly to changes in the exchange rate. The average exchange rate used in the calculation rose from Tk111.06 per US dollar in FY24 to Tk120.29 in FY25, which had a significant impact on the dollar-denominated income figures.

In local currency terms, per capita income for FY25 stands at Tk339,221, up from Tk304,102 in FY24. This reflects nominal income growth, even amid external economic pressures and fluctuations in the exchange rate.

Bangladesh’s previous highest per capita income in dollar terms was $2,793 in FY22. In the years that followed, dollar income figures dropped, mainly due to depreciation of the local currency, even though nominal income in taka continued to grow.