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Total Factor Productivity in Bangladesh: An Analysis Using Data from 1981-2014

Bangladesh has been experiencing a steady increase in the growth rate of real GDP since independence, accelerating from an average of less than 4% per year during 1972-1990 to 6.5% in 2010-2016. Bangladesh is one of the sixteen countries that have to strive for a journey to get herself out of LDC and at the same time to secure the middle income status (WDI 2016 database). This growth performance is overwhelming considering the low initial base. It is a matter of great surprise that it has successfully managed to continue 6% growth rate since 1996. Moreover, the country hits the highest 7.11% growth rate in fiscal year 2017-2018. The average growth rate of output for 1981-2014 is 4.89% while its population has grown by around 1.99% (source: every year over the same period.

Nonetheless, this performance is expected to gear up by ambitious endeavors of the government in recent times. The 7th FYP targeted achieving an 8% annual rate of GDP growth by 2015 and the Perspective Plan projected to further accelerate this growth to 10% by 2021 with 8% GDP growth per annum.  

This expeditious movement of economy induces the needs of further cogitations; how realistic are these growth targets?  What are the likely sources of growth and what will it take for Bangladesh to realize and sustain such growth targets over the next 15-20 years?  How policy could favorably influence growth dynamics?


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