Despite 6.5% annual growth, Bangladesh’s exports and imports relative to GDP have declined over the past decade.
The decline in trade ratios could hurt Bangladesh’s economic growth. The government could take steps to encourage exports, such as providing subsidies or tax breaks to exporters.
Bangladesh could also try diversifying its export markets to reduce reliance on a few key countries.
The share of international trade in Bangladesh’s economy has declined significantly in the past decade.
The ratio of imports to GDP has fallen from 21.2% in 2013-14 to 10.69% in 2023, while exports to GDP have fallen from 17.2% to 7.66%.
This decline has raised questions about the accuracy of Bangladesh’s income estimates and the willingness of Bangladeshi entrepreneurs to export their products.
Analysts say that the decline in trade ratios is due to several factors, including the country’s inward-looking industrialization strategy, which has shielded domestic markets from foreign competition.
The recently introduced national tariff policy reflects this trend, with Bangladesh’s average tariff protection rate falling from over 70% two decades ago to 30.58% in 2023.
The decline in trade-to-GDP ratios also calls into question the credibility of GDP estimates by the Bangladesh Bureau of Statistics.
As Bangladesh strives to recalibrate its economic strategy, the nation’s ability to balance its trade ratios will significantly shape its economic trajectory.
