Structural change in the Bangladesh economy: An analysis of composition of output

Abstract

This paper examines the changes in the sectoral composition of Bangladesh’s GDP over the period 1973 – 2017 both at the aggregated and disaggregated levels. As expected, perceptible changes occurred at the aggregated level with the share of the agricultural sector declining steadily while the relative shares of industry and services showing increasing trends. All three broad sectors of the Bangladesh economy grew over time. It appears from the study that the industrial sector grew the fastest followed by the services sector. The share of agriculture fell from about 39 percent in 1973 to 16 percent in 2017. During the same period, the share of the industrial sector rose from just over 15 percent to more than 31 percent. On the other hand, the share of the services sector increased from 46 percent in 1973 to about 54 percent in 2016. An analysis of the intra-sectoral composition suggests that the production of some commodities grew faster than others, and then over time some new commodities gained prominence thereby causing remarkable structural changes.