Bangladesh has witnessed a significant decline in consumption as a percentage of GDP during the outgoing fiscal year 2023-24, marking the lowest level in three years. Economists attribute this downturn to persistent inflation, widening income disparities, and weakening purchasing power among the population. Official data from the Bangladesh Bureau of Statistics (BBS) reveals that the consumption-GDP ratio dropped by 1.85 percentage points in FY 2023-24 compared to the previous fiscal year. This decline has had widespread implications for the country’s overall economic health.
Both private and public consumption at the national level have experienced reductions, impacting overall consumption patterns as rising prices force households to trim their spending. According to BBS figures, the consumption-to-GDP ratio decreased to 72.39% in FY 2023-24 from 74.24% in FY 2022-23, which had recorded the highest consumption levels in recent years. Economists highlight that intensified inflationary pressures have negatively affected consumption across both private and public sectors, leading to a cascading impact on economic activities.
In the current fiscal year, public consumption as a percentage of GDP decreased marginally from 5.67% to 5.61%, while private consumption saw a more significant decline from 68.58% to 66.78%. The prolonged period of high inflation, averaging above 9.0% over the past 18 months, has severely constrained purchasing power and curtailed overall economic consumption and production.
Dr. Masrur Reaz, Chairman of Policy Exchange Bangladesh, underscored the impact of inflation and income inequality on consumption patterns, stating, “The decline in imports has reduced supply, affecting local production and subsequently consumption.” Looking forward, economists and policymakers are expected to focus on mitigating inflationary pressures and addressing income disparities to revive consumption and stimulate economic growth in Bangladesh. For updates on Bangladesh’s economic indicators and policy responses, stakeholders are urged to monitor developments closely amid ongoing challenges in the global economic landscape.
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