The government wants to raise the country’s average per capita income to $4,500 over the next five years. The per capita income target for the 2030-31 fiscal year has been set at $4,591.
This income target appears in a report titled “Transforming Economy from Fragility to Prosperity” by the Planning Ministry’s General Economics Division (GED). Average per capita income in the outgoing fiscal year stood at $2,958.
The GED report lays out the government’s plans for reform and development across various sectors over the next five years. The report was published Wednesday. The plan covers the 2026-27 through 2030-31 fiscal years.
Per capita income is not an individual’s own income. It is calculated by combining all forms of income a country earns — domestic income alongside remittances from abroad — to arrive at gross national income, then dividing that national income per head of population. This gives a country’s average per capita income.
High inflation has been one of the economy’s biggest challenges for several years now. The current government wants to bring inflation under control. Under the plan, the target is to bring inflation down to 5 percent by the 2030-31 fiscal year. Inflation stood at 8.32 percent this past July.
Meanwhile, the government wants to push gross domestic product (GDP) growth to a record level over the next five years. GDP growth for the current fiscal year has been set at 6.5 percent. According to the GED report, growth will rise each year over the next five years, reaching 8.5 percent in the 2030-31 fiscal year.
Under the GED’s plan, the next five years of economic transformation have been divided into three phases. In the first year, the macroeconomy will be brought to a stable footing by stabilizing the exchange rate, controlling inflation, and improving conditions in the banking sector. The first year is called the year of recovery and stability.
The first through third years are called the years of restoration. During this period, priority will be given to increasing revenue collection, ensuring effective government spending, and bringing stability to the management of distressed loans. The third through fifth years are called the years of restructuring and accelerated growth. During this period, the focus will be on boosting domestic and foreign investment and driving the economy forward through job creation, with the aim of achieving “takeoff.”
The GED’s report, “Transforming Economy from Fragility to Prosperity,” outlines reform plans across various sectors — including banking, revenue, health, education, communications, employment and development activities — to bring about this economic transformation.
M Masrur Reaz, chairman of Policy Exchange Bangladesh, said this plan reflects the government’s vision for the future. It carries an aspiration for development, and offers some broad directions. But he said what is needed are implementable action plans, with clear timelines, across various sectors such as employment, taxation, banking and long-term investment.
M Masrur Reaz further said the economy faces a range of crises and problems — such as an export sector overly dependent on readymade garments, an investment slowdown, and the international trade environment. The economy’s driving forces are weak. Effective, implementable strategies are needed to overcome these various economic challenges, he said, and the GED’s plan lacks that.
Banking
The government has drawn up a five-year reform plan for recovering non-performing loans in the banking sector, strengthening oversight, establishing good governance, and restoring depositors’ confidence.
The country’s banking sector suffers from record levels of non-performing loans, weak governance, political interference, and lending to politically influential businesspeople. This has damaged the capital and profitability of many banks. State-owned banks face the greatest risk.
The government will implement this reform program in three phases. In the first year, immediate risks will be brought under control; over the following two years, banks will be restructured; and from the third through the fifth years, deeper reform initiatives will be undertaken.
In the first year, priority will be given to the banking sector’s highest-risk banks, non-performing loans, and depositor protection.
According to the report, Bangladesh Bank will identify willful loan defaulters and take legal action against them.
Over the following two years, bank governance, risk management and loan-recovery systems will be strengthened, alongside efforts to reinforce the financial safety net. In the final phase of reform, the focus will shift to making banks more efficient and competitive while reducing risk across the entire financial system.
Efforts will be made to increase governance and transparency at banks, improve information systems, and strengthen Bangladesh Bank’s supervisory capacity. Legal and institutional changes will be introduced to increase Bangladesh Bank’s operational independence. At the same time, a regulatory framework will be built in line with international standards.
Revenue
Under the GED’s plan, the revenue-policy and revenue-collection divisions will be separated as part of revenue-sector reform. This initiative, however, was already undertaken during the interim government’s tenure.
Other reforms in the revenue sector include: introducing a single VAT rate; reducing tax exemptions; bringing the informal sector into the tax net by setting a minimum tax for small businesses; and simplifying the tax-payment system through digitalization.
The target is to raise the tax-to-GDP ratio to 10 percent by the 2030-31 fiscal year. Bangladesh currently has one of the lowest tax-to-GDP ratios in the world.
Communications and transport
The communications sector has been set as one of the government’s top priorities. It wants to undertake several major projects over the next five years. These include the Narayanganj-Cumilla-Laksam-Feni chord line (railway). The government also wants to electrify the Dhaka-Chattogram double railway line. There are also plans for a Dhaka-Panchagarh double line and a Dhaka-Chapainawabganj double line. The plan also names as a priority an initiative to build a rail link from Dhaka through Myanmar to Kunming, China.
There are also plans for a metro rail, elevated rail, commuter rail lines and monorail for the capital, Dhaka, and other major cities.
Youth employment
Unemployment is highest among Bangladesh’s highly educated youth. The government has planned various initiatives for young people. For example, 560 young people will be given funding from a startup fund each year through 2030. Every year, 1,200 women entrepreneurs will be given various forms of support.
Good governance
The GED report places emphasis on establishing good governance. It says good governance is an essential precondition for macroeconomic stability, sustainable and inclusive economic growth, and development outcomes. This includes effective management of public resources, adherence to the rule of law, transparency, accountability, and building strong institutions.
The report further says that when a good-governance framework functions effectively, it creates a stable economic environment marked by effective fiscal and monetary policy, low inflation, and sustained investor confidence.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report