Staff Reporter :
Despite facing challenges, Bangladesh is witnessing the positive impact of the initiatives implemented by the interim government led by Professor Muhammad Yunus within just eight months of taking office.
These initiatives have contributed to a surge in remittance inflow, rising export earnings, improved foreign exchange reserves, a boost in the opening and settlement of import letters of credit (LCs), steps to stabilise bank operations and inflation, as well as efforts to combat money laundering and foster economic stability.
From July to February in the 2024-25 fiscal year, total remittance inflows reached $18.49 billion, reflecting a 23.8 per cent increase
compared to $14.94 billion during the same period in the previous fiscal year. Similarly, the country’s export earnings saw a growth of 10.53 per cent, reaching $32.94 billion during the first eight months of the current fiscal year, up from $29.80 billion during the same period in the previous fiscal year, according to data from the Export Promotion Bureau (EPB).
The increase in remittance inflows and export earnings has boosted the availability of foreign currency in the banking sector, which has resulted in a notable rise in both the opening and settlement of import letters of credit (LCs). For the first eight months of FY25, total LC settlements reached $46 billion, compared to $44.19 billion during the same period in FY24.
Inflation has also continued its downward trend, dropping to 9.32 per cent in February, down from 9.94 per cent in January this year.
Dr. Zahid Hussain, former lead economist at the World Bank’s Dhaka office, told The New Nation that despite significant challenges, the interim government has managed to steer key macroeconomic indicators in a positive direction.
However, he highlighted ongoing issues such as low revenue growth, sluggish public expenditure, decreasing foreign direct investment (FDI), inflation, unemployment, and the need for continued reforms as major hurdles to long-term stability and growth.
However, concerns remain over a potential slowdown in public expenditure, which could affect investment, employment, and overall economic growth. Bangladesh’s government investment is currently the lowest in Asia, and experts fear that low revenue growth and a lack of infrastructure development could hinder investment and employment generation.
Foreign loan commitments and disbursements have also decreased during the first eight months of FY25 due to policy shifts and implementation challenges. According to the Economic Relations Division (ERD), fresh loan commitments fell by 67.3 per cent between July and February, while disbursements declined by 17.3 per cent.
In the first eight months of FY25, commitments from multilateral and bilateral lenders amounted to $2.35 billion, a sharp decline from $7.17 billion in the same period of the previous fiscal year. Meanwhile, foreign loan disbursements totalled $4.13 billion, down from $4.99 billion during the same period last year.
ERD officials noted that several projects initiated under the previous government had been scrapped, contributing to the reduction in loan commitments and disbursements. To alleviate the pressure of debt repayment, the government is focusing on debt relief and reducing future loan commitments.
