Nearly 29 per cent of highly educated young people in Bangladesh are unemployed, while almost half of the country’s highly educated workers are employed in jobs that do not fully utilise their education and skills, according to a report by the International Monetary Fund (IMF). The findings highlight persistent weaknesses in the country’s labour market, including a mismatch between academic qualifications and employers’ requirements, as well as a shortage of suitable employment opportunities.
The findings were published in the IMF’s Regional Economic Outlook: Asia and Pacific, released on Thursday, 15 October. The report draws on information available up to 2 October and examines economic conditions, labour market developments and the growing influence of artificial intelligence (AI) across the Asia-Pacific region.
According to the report, one of the major obstacles facing young graduates entering Bangladesh’s job market is the mismatch between the skills they acquire through education and those sought by employers. Many jobseekers struggle to secure employment despite holding university degrees, as their qualifications do not always correspond to the practical requirements of available positions.
As a result, some graduates remain unemployed for extended periods, while others accept jobs below their level of education or expertise. This situation limits their opportunities for professional development and prevents the economy from making full use of its skilled workforce.
Skills mismatch and a shortage of quality jobs
The challenges facing Bangladesh are part of a broader pattern across Asia. In many countries in the region, a substantial proportion of workers are employed in agriculture and the informal sector, where employment arrangements may lack formal contracts and adequate job security.
Workers in these sectors often have limited opportunities for career advancement, professional training and skills development. Consequently, employment figures alone may not provide a complete picture of labour market conditions.
The IMF has emphasised that assessing the health of a labour market requires more than measuring unemployment. The quality of available jobs, working conditions, employment security and the extent to which workers’ qualifications match their responsibilities are also important considerations.
The issue is particularly significant for Bangladesh, where the working-age population is expected to grow further in the coming years. If the country can provide productive employment for this expanding workforce, it could unlock substantial economic opportunities.
However, failure to create enough quality jobs or make effective use of young people’s skills could prevent the country from fully benefiting from its demographic potential. A growing workforce can contribute to economic development only when workers have access to suitable employment and opportunities to improve their productivity.
To address these challenges, expanding quality employment in the manufacturing, production and services sectors will be essential. Aligning education and training more closely with labour market requirements is equally important.
Greater emphasis on practical skills, technical knowledge and the ability to adapt to changing workplace demands could help graduates improve their employment prospects. Closer cooperation between educational institutions and employers could also make academic programmes more relevant to the needs of the economy.
Artificial intelligence is reshaping the job market
The rapid development of technology, particularly artificial intelligence, is adding another layer of complexity to labour market challenges. AI is changing how many traditional jobs are performed while increasing demand for workers with specialised technological skills.
The IMF analysed approximately 40 million online job advertisements across 19 Asian economies. The analysis found that demand for workers in occupations highly exposed to AI had declined by around 10 per cent. At the same time, demand for workers with AI-related skills had increased.
The findings suggest that academic qualifications alone may not be sufficient to guarantee employment in the evolving job market. The ability to use emerging technologies, acquire new skills and adapt to changing professional requirements is becoming increasingly important.
Even countries where AI currently has a relatively limited impact on employment may face significant changes in the future, the IMF warned. Many new jobs created in the manufacturing and services sectors could be transformed by the adoption of AI, altering the skills employers require.
For Bangladesh, these developments underline the need to prepare young people for a changing employment landscape. Alongside conventional academic education, greater attention to digital literacy, technical expertise, problem-solving and practical workplace experience could help graduates remain competitive.
Expanding access to relevant training and ensuring that courses reflect employers’ needs may also help reduce the gap between education and employment.
IMF lowers Bangladesh’s growth forecast
Alongside its assessment of labour market weaknesses, the IMF has lowered its growth outlook for Bangladesh. The organisation forecasts that the country’s gross domestic product (GDP) will expand by 3.2 per cent in the 2026–27 financial year.
The projection points to the economic challenges Bangladesh faces as it seeks to strengthen growth and create employment. The effective use of skilled workers, improvements in productivity and the expansion of employment opportunities are closely linked to the country’s long-term economic performance.
When a significant proportion of highly educated young people remain unemployed or work in positions that do not match their qualifications, the economy risks losing potential gains in productivity and innovation.
In contrast, the IMF has raised its overall growth forecast for the Asia-Pacific region. Countries benefiting from the expansion of technology-driven economic activity and AI-related developments have seen their growth prospects improve.
However, lower-income economies continue to face pressure from elevated energy costs and inflation. These challenges can complicate efforts to sustain economic growth and improve living standards.
Turning Bangladesh’s young workforce into an economic asset
Bangladesh faces both an opportunity and a challenge. Its expanding working-age population could become a major driver of economic growth, but this will depend on the country’s ability to create productive jobs, improve workforce skills and respond to technological change.
A stronger connection between education and employment will be crucial. Universities and training institutions need to equip students with skills that reflect the evolving demands of employers, while businesses must be able to access workers with the expertise required to expand their operations.
Investment in emerging sectors, improved vocational and technical training, and wider access to practical learning could help young people transition more smoothly from education to employment.
The challenge extends beyond providing individuals with a source of income. Making effective use of highly educated young people is also important for strengthening national productivity, encouraging innovation and supporting sustainable economic development.
Without adequate opportunities to apply their knowledge and skills, Bangladesh risks losing a significant part of the economic benefit that its growing young workforce could otherwise deliver.
