Bangladesh’s economic story is often told in headlines: rising GDP, booming banks, swelling remittances, and a growing middle class. On paper, it’s a success story.
But scratch beneath the surface, and a very different picture emerges, one that ordinary households feel every day.
Income growth is not always translating into savings or financial security, and many families still struggle to make ends meet.
This gap between headline growth and daily experience is becoming increasingly visible in key indicators like bank deposits and household resilience.
For over a decade, the country has celebrated its economic growth. Annual GDP growth rates of 6-8%, expanding banks, and rising remittances paint a picture of stability and progress.
International reports applauded Bangladesh as a “success story” of development in South Asia. Yet, there is one crucial indicator that tells a more nuanced story: Financial system deposits, the money households and businesses park in formal banks.
Measured as a share of GDP, this indicator shows the proportion of the country’s total economic output that is saved in the formal financial system, reflecting both household and corporate savings behavior.
New data reveals a troubling trend. Deposits as a share of GDP peaked at 51.11% in 2015 but have steadily declined to 39.14% in 2023. A simple bar chart captures the story: Years in green show deposits above 50% of GDP; years in red mark the decline.
The shift from green to red signals a slow erosion of household and corporate savings, a reality often invisible in glowing macroeconomic reports.
In the absence of finalized data for 2024–2025, statistical indicators point to continued downward pressure on financial system deposits as a share of GDP. By September 2025, non-performing loans reportedly surged to 36% of total loans, while bank capital adequacy fell to 4.5% in mid-2025, far below the 10% regulatory minimum, conditions that typically weaken depositor confidence and constrain deposit growth.
Interestingly, remittances from overseas Bangladeshis have remained relatively stable, even showing signs of growth in recent years. Between 2015 and 2024, remittances fluctuated around 4.6–6.1% of GDP, providing a critical lifeline for many households.
Yet, despite this steady inflow of external support, financial system deposits continued to fall. This contrast highlights that households are increasingly relying on cash or informal channels rather than saving in banks, underlining the disconnect between rising GDP, stable remittances, and the shrinking financial buffer for ordinary families.
Basically, bank deposits aren’t just numbers on a balance sheet. They represent economic security, resilience, and the ability to plan for the future. When deposits shrink relative to GDP, it signals that people are either unable or unwilling to save.
The implications extend beyond households. Deposits fuel banks’ ability to lend. When deposits fall, credit growth slows, financial buffers weaken, and the system’s capacity to absorb shocks diminishes.
A country can look stable in national accounts while many families continue to face liquidity stress, juggling daily expenses, and uncertain income. The period after 2015 is particularly telling. Despite robust GDP growth, deposits-to-GDP began a steady decline.
This divergence highlights a growing disconnect between measured economic performance and the lived reality of households. People survive, but their savings, the foundation of long-term economic security, are shrinking.
To put this in perspective, consider a typical family in Dhaka. Even if their income remains the same, rising rent, utility costs, food prices, and education expenses often absorb any extra earnings.
For businesses, the story is similar. Small and medium enterprises (SMEs) often rely on cash transactions or informal credit channels because bank deposits are declining. This limits investment capacity, slows growth, and perpetuates vulnerability to economic shocks. When both households and businesses reduce formal savings, the financial system loses the capital it needs to drive broader growth.
What explains the decline?
Partly, it reflects structural and behavioral changes. As households and firms confront rising living costs and volatile income sources, they may avoid keeping money in banks. Partly, it is linked to financial literacy and trust. Many people still perceive banks as inaccessible or risky, especially in rural areas.
Policy choices also matter. Incentives to save formally have been limited, and programs to expand financial inclusion have not fully reached the families and small businesses most at risk.
Strengthening financial inclusion, incentivizing formal savings, and building trust between citizens and financial institutions are essential. Small steps, like simplified deposit accounts, digital savings tools, and targeted programs for low-income households, can make a big difference.
Without addressing these gaps, macroeconomic stability risks being an illusion, strong numbers on paper, fragile security in people’s lives.
This is not just an economic argument; it is a social one. Savings empower families, create financial resilience, and provide opportunities for investment in education, health, and business. When savings erode, so too does the capacity to build a better life.
The decline in deposits is a warning signal, a red flag that growth must translate into tangible security and prosperity for ordinary citizens. For millions of households, the story is one of struggle, squeezed savings, and financial vulnerability.
In the end, GDP growth is only part of the story. To truly understand the health of Bangladesh’s economy, we must measure how households save, spend, and withstand economic stress.
Financial system deposits, declining steadily since 2015, are a key indicator that growth has yet to reach everyone. Coupled with stable remittances, they are a wake-up call: Prosperity must reach the people, not just the statistics.
Bangladesh has come a long way. Its economic progress is real. But if the country hopes to turn growth into shared security, policymakers, banks, and communities must work together to strengthen savings, expand access to financial services, and ensure that growth on paper becomes prosperity in everyday life.
True economic health is measured in the wallets, accounts, and financial resilience of ordinary people. And right now, those indicators tell a sobering story.
Bithe Rani Aich is a Research Associate, Bangladesh Institute of Governance and Management (BIGM).
