Growth slowed before the politics did

Bangladesh 2036, chapter 1 of 10. Contents, sources and the five numbers.

Growth slowed before the politics did

The 2024 transition is the wrong explanation for the slowdown, because the slowdown is visible in the sector data before it happens.

The record is a high plateau with two shocks. The World Bank series, which mirrors the rebased BBS national accounts, runs from 5.57 percent in FY10 to 7.11 percent in FY16, averaging 6.33 percent over those seven years, and 6.59 percent in FY17. The BBS series carries 7.32 percent in FY18, 7.88 in FY19, the pandemic trough of 3.45 in FY20, then 6.94 and 7.10 in FY21 and FY22, and 5.78 in FY23. The World Bank series extends it: 4.22 percent in FY24 and 3.49 percent in FY25. Across FY10 to FY24 the fifteen readings average 6.24 percent.

The mapping matters more than it sounds. The World Bank year for Bangladesh is the fiscal year ending in June of that year. Its 2020 row is 3.45 percent and its 2023 row is 5.78 percent, identical to the BBS FY20 and FY23 figures. Any analysis that reads the 2024 row as FY25 is a full year out, and several published summaries do exactly that.

The engine downshifted in the composition data first. Industrial growth ran 10.29 percent in FY21 and 9.86 percent in FY22, then 8.37 percent in FY23. Manufacturing ran 11.59 and 11.41 percent in those two high years, then 8.89 percent in FY23. Total investment peaked at 32.21 percent of GDP in FY19 and was 30.95 percent in FY23. Private investment peaked at 25.25 percent in FY19 and was 24.18 percent in FY23. The economy saves 29.95 percent of GDP including remittances and invests 30.95 percent. It is not short of money. It is short of a mechanism to move money to its best use.

The institutions now mark FY26 low. The IMF projects 4.7 percent for FY26, then 4.3, 4.5, 5.7, 5.8 and 6.1 percent through FY31, an average of 5.2 percent. The World Bank projects 3.9 percent for FY26 rising to 5.3 percent by FY28. Neither reaches 6 percent before FY31, the sixth of the eleven years that remain.

The 6 percent decade is not the continuation of a trend; on both institutional paths it has to be built, and the first five years of it are already spoken for.

Poverty has already registered the stall. The national upper poverty rate fell from 48.9 percent in 2000 to 18.7 percent in 2022. The World Bank now estimates 21.4 percent for 2025 and projects 19.3 percent for 2028, still above the 2022 level. On the World Bank lines, 58.0 percent of the population was below 6.85 international dollars a day in 2022. That near sixty percent, not the 5.6 percent still in extreme poverty, is the population the decade is about.

The state cannot pay for the decade it has promised

Every commitment the rest of this piece describes is a claim on a treasury that collects less than eight taka in every hundred of national income.

The tax record is regression, not stagnation. The World Bank central government series reads 9.02 percent of GDP in 2012, 8.50 in 2015, 7.32 in 2016, 7.00 in 2017, 7.73 in 2018, 7.64 in 2019, 7.00 in 2020, and 7.64 in 2021. The FY25 iBAS++ actual of 6.79 percent sits below all of them. Revenue excluding grants tells the same story from a wider base: 11.15 percent of GDP in 2012 against 9.54 percent in 2021.

The interest bill is now the binding item. Interest on sovereign debt cost 134,430 crore BDT in FY25, of which 116,617 crore was domestic. That is 35.7 percent of tax collected before a single school, clinic or embankment is funded. External debt service ran 1,592.5 million USD in FY19 and 3,371.6 million USD in FY24, an increase of 112 percent in five years. The interest component alone went from 492.1 million USD in FY22 to 1,349.8 million USD in FY24, a rise of 174 percent. Debt service took 12.76 percent of revenue and grants in FY23, up from 8.3 percent in FY18. The stock stays moderate at 15.5 percent of GDP for external debt in FY23, and the IMF projects general government gross debt at 41.8 percent of GDP for 2026. The problem is the flow, not the stock, and graduation raises the price of the flow.

The development programme is written for a richer state. The NEC approved an FY26 Annual Development Programme of 230,000 crore BDT. Development expenditure actually executed in FY25 was 156,706 crore BDT. The programme is therefore 46.8 percent above the previous year's outturn. The project table for FY26 on this machine records 1,356 projects sharing 166,900.5 crore BDT, of which project aid finances 36.12 percent and the ten largest projects absorb 18.7 percent. A programme with a tail of thirteen hundred projects and a head of ten megaprojects is built for allocation, not for completion.

A second budget sits outside the first. The Finance Division's consolidated accounts of the twenty major state owned enterprises show liabilities of 3.46 trillion BDT in FY23, up 29 percent in one year, against assets of 4.74 trillion BDT and equity of 1.29 trillion BDT. Debt to equity rose from 2.12 to 2.69 in a single year. Those companies paid the state 7.0 billion BDT in dividends, a return of 0.15 percent on the assets they hold. Twenty enterprises is not the whole sector, so this is a floor.

A state whose interest bill is thirty six percent of its tax take has already spent the decade; the only question left is whether the revenue ratio moves before the arrears do.

Start: Contents and the five numbers

Next: The banking system is the largest unbooked liability on the national balance sheet

Bangladesh 2036, the series. Contents and the five numbers · 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10

Sources for every figure in this chapter are listed on the contents page and in the series source ledger.