According to the World Bank, Bangladesh’s GDP growth for the fiscal year 2024-25 (ending in June) is projected to plummet to 3.3%.
The interim government of Bangladesh, under the administration of Mohammad Yunus, is paying a steep price for its confrontational stance against India. This political gamble has pushed the entire nation into a state of economic turmoil, potentially dragging 3 million more Bangladeshis into extreme poverty. The World Bank has sharply downgraded Bangladesh’s growth forecast, warning that the country could soon witness its lowest economic growth in 36 years.
The ongoing tensions with India have caused Bangladesh to miss several strategic opportunities that it traditionally enjoyed due to its proximity and cordial relations with its neighbor, ranging from bilateral trade benefits to emergency financial assistance. Moreover, the intensifying trade war between China and the United States has dealt a double blow to Bangladesh. While the U.S. has imposed higher tariffs on Bangladeshi goods, India has grown increasingly significant for China, sidelining Bangladesh.
According to the World Bank, Bangladesh’s GDP growth for the fiscal year 2024-25 (ending in June) is projected to plummet to 3.3%. This marks a steep drop from the 4.1% forecast made just four months ago in January and represents the country’s slowest growth rate in 36 years. The report highlights several contributing factors, including declining investment, rising inflation, instability in the financial sector, and growing political uncertainty.
This slowdown in Bangladesh’s economy will badly affect the daily lives of people. Usually, when a country’s GDP (its total income) drops by just 1%, it can lead to millions of people losing their jobs. For Bangladesh, the situation is even worse because many people are already struggling to find work.
A report published on April 23 says that because the economy is getting weaker, many people may fall below the international poverty line. This means they will earn less than $2.15 a day, which is not enough to live a basic life.
Not only are jobs becoming fewer, but even daily wages (the money workers earn each day) are going down. By the end of this financial year, about 9.3% of the people in Bangladesh may be living in extreme poverty. Last year, this number was 7.7%. That means nearly 3 million more people may become very poor and face serious problems in meeting their basic needs.