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The government has set an ambitious target of raising Bangladesh’s average per capita income to $4,591 and increasing economic growth to 8.5 percent by fiscal year 2030-31, with sweeping reforms in the banking, revenue, health, education, transport and employment sectors planned over the next five years.
The targets are outlined in a five-year development strategy titled “Transforming Economy from Fragility to Prosperity”, prepared by the General Economics Division (GED) of the Planning Commission. The plan covers fiscal years 2026-27 to 2030-31 and was released on Wednesday.
Bangladesh’s per capita income stood at $2,958 in the last fiscal year. The GED’s target therefore represents a substantial increase over the next five years.
The report also aims to bring inflation down to 5 percent by FY31 from 8.32 percent in July this year. GDP growth, meanwhile, is targeted at 6.5 percent in the current fiscal year and is expected to rise gradually each year before reaching 8.5 percent in FY31.
Per capita income, the report notes, does not represent an individual’s actual earnings. It is calculated by dividing the country’s gross national income, including income generated domestically and remittances from Bangladeshis abroad, by the population.
The GED has divided the five-year economic transformation programme into three broad phases.
The first year will focus on recovery and stability, with priorities including stabilising the exchange rate, controlling inflation and improving conditions in the banking sector.
The first to third years will be dedicated to restoration. During this period, the government plans to increase revenue collection, ensure more effective public spending and bring stability to debt management.
The third to fifth years will focus on restructuring and accelerating growth. The government plans to use this period to increase domestic and foreign investment, generate employment and create the conditions for an economic “take-off”.
The report contains reform proposals covering banking, taxation, healthcare, education, transport, employment and development activities.
Economist and Policy Exchange Bangladesh Chairman M Masrur Reaz said the plan reflects the government’s future vision and contains broad development directions. However, he stressed the need for practical and time-bound action plans covering employment, taxation, banking and long-term investment.
He also pointed to challenges including Bangladesh’s heavy dependence on readymade garment exports, weak investment and an increasingly difficult international trade environment, saying the economy currently lacks sufficient growth drivers.
The banking sector is one of the major areas targeted for reform.
The government has prepared a five-year plan to recover non-performing loans, strengthen supervision, improve governance and restore depositors’ confidence. The sector has been struggling with record levels of bad loans, weak corporate governance, political interference and lending to politically influential business groups.
State-owned banks are considered particularly vulnerable, according to the report.
The reforms will be implemented in three stages. The first year will focus on containing immediate risks, while the following two years will concentrate on restructuring banks. The final two years will involve deeper reforms aimed at making banks more efficient and competitive and reducing risks across the financial system.
In the first year, priority will be given to high-risk banks, non-performing loans and protection of depositors.
According to the report, Bangladesh Bank will identify deliberate loan defaulters and take legal action against them.
During the second phase, the government plans to strengthen corporate governance, risk management, loan recovery mechanisms and financial safety systems. The final phase will focus on improving efficiency and competitiveness across the banking system.
The government also plans to improve transparency and governance, modernise information systems and strengthen Bangladesh Bank’s supervisory capacity. Legal and institutional changes will be introduced to enhance the central bank’s operational independence and bring the regulatory framework closer to international standards.
Revenue mobilisation is another major priority. Under the proposed reforms, tax policy and tax collection functions will be separated. The initiative was already taken during the interim government, according to the report.
Other proposed measures include introducing a single VAT rate, reducing tax exemptions, bringing informal businesses into the tax net through minimum taxation and simplifying tax payments through digitalisation.
The government aims to raise the tax-to-GDP ratio to 10 percent by FY31. Bangladesh currently has one of the lowest tax-to-GDP ratios in the world.
The transport sector has also been identified as a priority, with several major railway projects planned over the next five years.
These include the Narayanganj-Comilla-Laksam-Feni rail corridor, electrification of the Dhaka-Chattogram double railway line, and construction of double lines on the Dhaka-Panchagarh and Dhaka-Chapainawabganj routes.
The plan also prioritises an initiative to establish a railway connection from Dhaka through Myanmar to Kunming in China.
For Dhaka and other major cities, the government plans to expand urban mass transit through metro rail, elevated rail, commuter rail and monorail systems.
Employment generation is another key component of the five-year strategy, particularly as unemployment remains high among highly educated young people.
The government plans to provide funding from startup programmes to 560 young entrepreneurs annually until 2030. It also plans to support 1,200 women entrepreneurs every year through various programmes.
The strategy seeks to create an environment in which young people can develop businesses and generate new employment opportunities rather than relying solely on conventional jobs.
The GED report places considerable emphasis on good governance, describing it as an essential prerequisite for macroeconomic stability, sustainable and inclusive growth and effective development outcomes.
The governance agenda includes efficient management of public resources, adherence to the rule of law, transparency, accountability and the development of strong institutions.
According to the report, effective governance can help create a stable economic environment by supporting sound fiscal and monetary policies, maintaining lower inflation and strengthening investor confidence.
The five-year strategy therefore seeks not only to raise growth and income but also to address some of the structural weaknesses that have made the economy vulnerable to shocks.
If implemented effectively, the plan envisages an economy moving from a phase of recovery and stability, through restoration, and eventually towards restructuring and accelerated growth by FY31.