Bangladesh has recently attained the status of a lower middle-income economy (LMIE) against the backdrop of fast-paced GDP growth, diversification of production and exports, the growing competitive strength of a number of sectors in the economy, high inflow of remittance, and overall robust economic performance.

In the history of development, many countries after graduating to middle-income status fail to sustain their past growth momentous and, as a result, get stuck in the middle-income trap (MIT). Bangladesh must pursue a well-articulated strategy to sustain and build upon its past growth momentum to avoid the MIT. For the transformative journey, Bangladesh will be required to take concrete steps towards good governance, strong institutions, rule of law, transparency and accountability, enhanced productivity and efficiency gains, structural transformation of the economy, decentralization of the economy, efficiency in the public expenditure allocation, better public sector management, and distributive justice. Further, a new correlation of drivers will need to emerge to sustain and accelerate Bangladesh’s growth momentum and avoid the MIT.