Bangladesh has been experiencing relatively steady economic growth, averaging 6 per cent annually over the past decades. This growth has been overly reliant on the country's demographic dividend, which is defined as the temporary boost to productivity and savings potential that occurs when a large share of the population is of working age compared to dependents. With Bangladesh boasting a burgeoning young workforce, the increase in the working-age population has propelled domestic consumption and labour supply for the export sector. Private consumption expenditures have been growing at a rate of 7-8 per cent annually (Bangladesh Bank), driven by this rise in the working-age population.
However, Bangladesh is already witnessing a decline as the birth rate has dropped from 6.3 to 2.0 children per woman between 1975 and 2021 (World Bank). Meanwhile, other sources of economic growth remain hindered by systemic inefficiencies in policies, governance, and industries. Job creation has failed to keep pace with population growth, and health and education outcomes are subpar. Furthermore, over-dependence on low-skilled garment exports leaves the economy vulnerable.
Without urgent reforms to bolster diversification, enhance skills, promote female participation, and improve the business environment, Bangladesh risks losing its growth advantage within the next decade as demographic transition accelerates. Progress could grind to a halt unless holistic development is taken to nurture demographic factors.
Abdullah Al Farabi
Student,
Department of Accounting and Finance
North South University
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