The phrase “trillion-dollar economy” entered Bangladesh’s national discourse in late 2022, when Boston Consulting Group (BCG) forecast that the country would become a trillion-dollar economy by 2040. A Planning Ministry document presented at an Executive Committee of the National Economic Council (ECNEC) meeting in January 2023 reached the same conclusion, adding that the target could be achieved as early as 2030 if growth remained between 8% and 9%. The ousted Sheikh Hasina government subsequently incorporated the figure into its narrative of turning Bangladesh into a developed country by 2041.
Surprisingly, the BNP’s 2026 election manifesto brought that target forward by seven years, pledging to turn Bangladesh into a trillion-dollar economy by 2034. Since the election, BNP leaders, including Prime Minister Tarique Rahman and many of those who now serve as ministers, have repeatedly spoken of this economic ambition.
The latest example came earlier this month, when Finance Minister Amir Khasru Mahmud Chowdhury addressed the opening of World Investor Week 2026 in Dhaka.
However, the promise offered no explanation of how this could be achieved within the next eight years or what calculations underpinned the target. It is also interesting that, in just four years, a consultancy firm’s projection has evolved into a political promise, with no clear indication of where that promise will lead the party.
There is nothing inherently wrong with this, as political ambitions are commonplace. The problem, however, arises when politics and economics intersect: people begin to expect and look for tangible changes. They believe that if a trillion-dollar economy is the target for 2034, reaching even close to that milestone should improve their living standards.
Excessive expectations often carry the seeds of excessive disappointment. Only eight years remain to reach the target, yet the country faces gas, electricity and fertiliser shortages, soaring commodity prices and a deteriorating law and order situation. Foreign investment is at rock bottom, domestic investment is stagnant, the banking sector remains under severe strain, and the stock market offers little cause for optimism. Various institutions have become dysfunctional.
Against this backdrop, is it even possible for Bangladesh to become a trillion-dollar economy within the next eight years?
For two decades, Bangladesh achieved growth of 6% to 7%, rapidly reduced poverty and outperformed wealthier neighbours on social indicators. Economists called this the “Bangladesh paradox” because conventional wisdom holds that sustained growth is impossible without strong institutions. Bangladesh spent two decades demonstrating the opposite.
How did it happen?
Four engines powered this growth: extremely cheap labour, particularly that of young women migrating from rural areas to cities; the ready-made garment (RMG) industry, which still accounts for more than 80% of exports; remittances; and NGOs and microfinance institutions, which compensated for the state’s shortcomings in education, family planning and primary healthcare.
None of these four engines actually depended on a capable state. Garment factories operated through arrangements such as bonded warehouses and back-to-back letters of credit (LCs), which allowed businesses to circumvent bureaucratic obstacles. Remittances flowed because of family ties, not because of government policy. In fact, state inefficiency meant that less remittance money entered through formal banking channels than could otherwise have been the case.
NGOs operated alongside the state and often in its place. The expectation was that the state would at least provide some support. It failed to do so. Instead, by exploiting institutional weaknesses, it allowed corruption and bureaucratic obstacles to flourish, effectively trying to take a cut of what people were rightfully entitled to. Migrant workers were deceived and mistreated; in 2015, many ended up in mass graves in the jungles of Thailand and Malaysia after falling into the hands of human traffickers. Tragedies such as the Tazreen Fashions fire and the Rana Plaza collapse also occurred. Had the state provided even modest support, Bangladesh’s garment industry might now be exporting higher-value products alongside cheap clothing, and labour markets in various countries might not have closed their doors to Bangladeshis.
Ultimately, this paradox was driven by people’s vigour, demand in global markets and the comparative advantage of cheap labour. That combination was enough to take Bangladesh from low-income to lower-middle-income status.
The question is whether the same formula can deliver the next stage of development.
According to provisional estimates by the Bangladesh Bureau of Statistics (BBS), the country’s GDP exceeded $500 billion for the first time in the 2025–26 fiscal year, reaching approximately $501 billion, with real growth of 4.14%. But the indicators buried deeper in the same report tell a different story. The investment to GDP ratio fell to 27.93%, while private investment dropped to 21.53%. Both domestic and national savings declined. Most importantly, growth in manufacturing, the economy’s principal engine, fell to 2.86%.
What, then, would Bangladesh need to do to reach the trillion-dollar mark by 2034?
To grow from $501 billion to $1 trillion in eight years, Bangladesh's economy would need to expand by an average of roughly 9% annually in US-dollar terms. Consider a hypothetical scenario in which real GDP grows by 7.5% annually, domestic inflation averages 5.5%, and the taka depreciates against the dollar by 2% a year. Under these assumptions, the economy would reach approximately $1.17 trillion by 2034. This is an illustrative calculation, however, not a prediction.
The difficulty is that Bangladesh currently falls short of all three assumptions. Under present circumstances, the target is little more than wishful thinking. In other words, the only way to reach it is to sustain high growth, controlled inflation and a stable taka for eight consecutive years—something Bangladesh has never achieved simultaneously.
There is also a trap hidden in this calculation. A 10% depreciation of the taka can reduce dollar-denominated GDP by roughly $50 billion without any change in domestic production. A dollar-based target therefore creates a political temptation to artificially prop up the value of the taka. Bangladesh paid the price for this mistake during its foreign exchange reserve crisis in 2022, while Egypt and Nigeria have paid an even steeper price.
The government’s medium-term framework projects growth of 6.5% in the current fiscal year (FY2026-27), rising to 8.5% by FY2030–31. Over the same period, total investment is expected to reach 40% of GDP and foreign direct investment (FDI) 2.7% of GDP, equivalent to approximately $17–18 billion a year. It is worth noting that Bangladesh received just $1.7 billion in foreign investment in 2024.
Forecasts from independent institutions paint a different picture. In September, the Asian Development Bank (ADB) lowered its growth forecast for the current year to 4%, while projecting inflation at 9%.
The World Bank has sharply downgraded its growth forecast for FY2026-27, cutting it to 3.4% in its latest projection, from 4.6% in June and 6.1% in January.In July, the International Monetary Fund (IMF) projected growth of 3.5% and warned that, without robust reforms, growth could fall below 3% over the medium term.
If the ADB’s forecast proves accurate, Bangladesh’s economy will be worth approximately $540 billion by the end of June 2027. It would then need to grow by an average of roughly 9.2% annually in dollar terms over the remaining seven years to reach $1 trillion.
The global environment is not favourable either. According to the World Bank, global growth will slow to 2.5% in 2026 because of the conflict in the Middle East, the lowest rate in the post-Covid period.
Neither the ADB, the World Bank nor the IMF projects a trillion-dollar economy for Bangladesh by 2034. If their growth forecasts hold and the taka remains stable, the milestone could arrive sometime between 2035 and 2038. But if the taka continues to depreciate at the rate of inflation, the target could be pushed into the 2040s.
Adding to these challenges is Bangladesh’s graduation from the Least Developed Country (LDC) category. The country is scheduled to graduate from the LDC category on 24 November 2026, although the timing remains subject to further consideration at the United Nations. The eventual phaseout of LDC-specific trade preferences could put additional pressure on the ready-made garment (RMG) sector, the biggest engine of the Bangladesh paradox. Automation and buyers’ increasingly stringent compliance requirements will also erode the advantages of cheap labour. Meanwhile, much of the remittance Bangladesh receives goes towards consumption rather than productive investment.
In 2005, Bangladesh’s economy was worth approximately $70 billion, and the poverty rate stood at around 40%, meaning roughly 55 million people were poor. Over the next two decades, the economy grew sevenfold, surpassing $500 billion.
Yet, according to the World Bank, nearly 38 million people still live in poverty, while another 62 million remain just above the poverty line, vulnerable to being pushed back into poverty by a single illness, a flood or a year of inflation. Together, the poor and those at risk account for more than half of the population.
Who, then, has this $500 billion economy actually served?
Some argue that the earlier reduction in poverty was an illusion. The interim government’s White Paper said statistics had become a political tool during the past years and expressed serious doubts about GDP growth figures. But declining child mortality, rising school enrolment and the expansion of electricity access to almost every household point in the same direction. Poverty reduction was real, but it rested on a fragile foundation.
Millions of people had moved just above the poverty line, wages had failed to keep pace with inflation, and a state with one of the lowest tax collection rates had little in the way of a social safety net to offer them.
Looting helped wash away that fragile foundation. According to estimates in the White Paper, approximately $234 billion was illicitly transferred out of the country between 2009 and 2023. Money siphoned from banks did not translate into jobs or loans for small entrepreneurs. Capital flight weakened the taka, while money printing to rescue ailing banks fuelled inflation. Those who spend half their income on food suffered the most. The people at the bottom paid the price for the plunder at the top.
While the economy grew sevenfold, the number of people living in poverty fell by only about one-third, and most of those who escaped poverty remain on the edge. Two decades of development delivered infrastructure and impressive figures, but failed to provide lasting security for people at the bottom.
A trillion-dollar economy is, at its core, a political slogan. But is it possible to move towards that goal under the current system? Unless economic policies are aligned with political slogans, the latter will remain just that—slogans. Every political ambition must rest on a sound and credible policy framework.
The clearest evidence of institutional weakness is the tax-GDP ratio. Under the old GDP base year, this ratio peaked at approximately 10.4% in FY2011–12 and stood at 10.3% in FY2016–17, which is now around 6.8%. It is evident that when the economy has grown, the state’s ability to collect taxes relative to its size has declined. Bangladesh has not merely failed to move forward; it has moved backwards.
This weakness in tax collection is fundamentally not a problem of administrative capacity alone. It is a political choice. Those who benefit from tax exemptions, low tax payments and the advantages of remaining outside the formal economy have remained close to power under successive governments. The initiative to split the National Board of Revenue (NBR) into separate policy and administration wings stalled following protests by officials, demonstrating that insiders within the institution also resist reform because they have a stake in the existing system.
The same pattern appears across other institutions. Loan defaulters in the banking sector have repeatedly received rescheduling opportunities and special concessions. The independence of the central bank has existed more on paper than in practice. Cost overruns and delays have become the norm in development projects. A common logic underpins these failures: institutions operate in ways that generate benefits for those close to power rather than for the country as a whole.
During the paradox years, these weaknesses were tolerable because the engines of growth did not depend on the state. There is no room for such complacency in the next stage.
Bangladesh urgently needs three reforms at the moment. First, taxation: a transparent review of tax exemptions and digital systems that reduce direct contact between taxpayers and officials. Second, banking: genuine central bank independence and visible action against wilful defaulters. Third, the rule of law, because investors value the certainty of rules more than incentives.
With sustained reforms and no major shocks, the country could reach the trillion-dollar mark between 2036 and 2038. That would also bring political dividends for the incumbent government. It must therefore move beyond the false dichotomy of “politics versus policy” and embrace the idea of “politics through policy”. Reforms must be meaningful, not cosmetic.
Without meaningful institutional reform, the trillion-dollar dream could slip beyond 2040. Along the way, other problems could emerge, making life even more difficult for ordinary people.
Ultimately, the yardstick itself must change. The question should not simply be how large the economy has become. Every year, we must also ask how much the real incomes of the bottom 40% have increased.
A trillion-dollar economy will belong to everyone only when people, not numbers, become the measure of development.
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Murad Kibria is a writer and chartered accountant.