Bangladesh Bank Training Academy Journal

Abstract

An analysis of the impact of government policies on economic development is very important for further policy decision. This paper attempts to analyse such impact in the context of Bangladesh for the period of 1972-2015. It is observed that the government policies in Bangladesh drastically shifted from socialist to market-oriented economic system in the mid-1970s that emphasised on private sector-led export-oriented industrialisation strategy, instead of public sector-led import substitution industrialisation strategy. Governments provided lots of facilities to the industrial sector including duty free import of industrial raw materials and machinery. As a result, the share of industrial sector in GDP increased largely from 10 percent in 1973 to 32 percent in 2015. The GDP growth increased gradually from around 3 percent in 1973 to above 6 percent in 2015. The inflation rate significantly reduced from around 54 percent in 1973 to around 6 percent in 2015.