Bangladesh’s two‑decade “economic miracle”—driven by rapid growth, ready‑made garments, and remittances—is now under strain. Growth is slowing: for fiscal 2024–25, GDP is projected at around 5.4%, down from recent highs.
Inflation and Cost‑of‑Living Pressures
– In April 2025, year‑on‑year CPI inflation reached 9.17%, easing slightly to 9.05% in May. – Food prices—about 45% of the CPI—remain on an upward trend, especially rice, which spiked after last year’s floods disrupted supply. – The central bank’s policy rate, set at 10.10%, has so far failed to tame price pressures driven by supply‑side shocks.
Remittances and Forex Reserves
– In April 2025, remittance inflows amounted to $2.75 billion, a 34.6% increase year‑on‑year. – Foreign‑exchange reserves stand at $22.0 billion under the BPM6 measure and $27.4 billion on a gross basis—enough to cover several months of imports.
Banking Sector Challenges
– Non‑performing loans (NPLs) have surged from 9.9% a year ago to 20.2%, putting severe strain on bank balance sheets. – With the 91‑day T‑bill return at 10.10%, credit growth to private industry has stalled at 7.6%, squeezing working capital for thousands of firms.
Revenue Collection and the Budget
– Through eleven months of FY 2024–25, National Board of Revenue collections rose only 3.8%, far below targets. – With development spending cut by Tk 35,000 crore and operating outlays up Tk 28,000 crore, major infrastructure projects face delays.
Legal Environment and Investment Risk
– On Transparency International’s 2024 Corruption Perceptions Index, Bangladesh scored 26 out of 100, with some 4.5 million court cases pending.
– Over 70% of businesses report having paid unofficial fees or bribes, deterring foreign investors and undermining confidence.
Outlook: Hope and Hazard
Bangladesh has weathered storms before—cyclone recovery and a resilient garment sector among them.
• Optimistic scenario: Strong policy action, targeted food subsidies, bank restructuring, and timely IMF support could sustain 4–5% growth.
• Downside risk: Inflation above 12%, a 15–20% depreciation of the taka, a major bank failure, and rising unemployment could push growth to zero and unemployment above 7%.
Conclusion Swift reforms are essential: boost agricultural output and food support, merge troubled banks, strengthen legal and regulatory frameworks, and create an investment‑friendly environment. With its hardworking population and steady remittance inflows, Bangladesh can emerge from this storm if policymakers act decisively.