Bangladesh has been ranked the 121st freest economy in the world, according to the Economic Freedom Index-2019 released by the Heritage Foundation, a US-based conservative.
This year, Bangladesh moves up seven notches from last year’s ranking that was 128th.
Bangladesh’s economic freedom score is 55.6. Its overall score has increased by 0.5 point, with higher scores on factors including property rights and government integrity countering declines in investment freedom and fiscal health.
Bangladesh is ranked 27th among 43 countries in the Asia-Pacific region, and its overall score is below the regional and world averages.
Robust economic growth of approximately 6 percent annually for two decades has been driven by a rapid increase in private consumption and fixed investment. Nevertheless, Bangladesh still grapples with poor infrastructure, endemic corruption, insufficient power supplies, and slow implementation of economic reforms.
The fragile rule of law continues to undermine economic development. Corruption and weak enforcement of property rights force workers and small businesses into the informal economy. Entrepreneurial activity is also hampered by an uncertain regulatory environment.
Property laws are antiquated, and land disputes are common. The judiciary is slow and lacks independence. Contract enforcement and dispute settlement procedures are inefficient.
Endemic corruption and criminality, weak rule of law, limited bureaucratic transparency, and political polarization have undermined government accountability. High-profile corruption cases are common. Two recent cases involved a chief justice and a former prime minister.
The top income tax rate is 25 percent, and the top corporate tax rate is 45 percent. Other taxes include a value-added tax. The overall tax burden equals 8.8 percent of total domestic income.
Over the past three years, government spending has amounted to 13.6 percent of the country’s output (GDP), and budget deficits have averaged 3.6 percent of GDP. Public debt is equivalent to 32.4 percent of GDP.