Challenges ahead
Bangladesh’s economy has shown signs of stabilisation during the first six months of the BNP government, with stronger remittance inflows, moderating inflation, higher exports and foreign exchange reserves crossing the $37 billion mark.
But the recovery remains fragile, with weak private investment, a troubled banking sector, poor revenue mobilisation and growing debt-servicing pressures continuing to weigh on the outlook.
Prime Minister Tarique Rahman’s government took office in February with the BNP holding 209 seats on its own and 212 seats with its allies, giving the ruling bloc a decisive parliamentary majority.
It inherited an economy already under severe strain following years of alleged corruption, misuse of discretionary power and economic mismanagement during the ousted fascist government of Sheikh Hasina.
The legacy included weak private investment, persistent inflation, banking-sector distress, a narrow revenue base, rising external debt obligations, wealth concentration and allegations of money being siphoned abroad.
Against that difficult backdrop, several key indicators have improved during the government’s first 180 days, providing some grounds for cautious optimism.
Bangladesh received nearly $18.99 billion in remittances between February and July 2026, according to Bangladesh Bank data, providing an important boost to foreign exchange liquidity.
Export earnings also remained strong. Bangladesh earned more than $24.8 billion from exports between February and July, while total exports for FY2025-26 stood at around $48 billion, according to Export Promotion Bureau (EPB) data.
Foreign exchange reserves have also recovered. As of August 13, Bangladesh’s gross foreign exchange reserves stood at $37.11332 billion, taking the reserves above the $37 billion threshold once again, according to Bangladesh Bank.
Inflation also moderated in July, although economists cautioned against interpreting the decline as evidence of a sustained easing in price pressures.
Overall inflation fell to 8.32 per cent in July from 9.16 per cent in June, according to Bangladesh Bureau of Statistics (BBS) data, reaching its lowest level in eight months. The decline was driven largely by a sharp fall in food prices.
Economists, however, said the improvement could partly reflect normal price fluctuations rather than a lasting reduction in inflationary pressure.
Despite improvements in several macroeconomic indicators, private investment remains subdued and the banking sector continues to face deep structural problems.
Private-sector credit growth fell to its lowest level in 33 years, slowing to 4.47 per cent in June from 4.98 per cent in May, according to Bangladesh Bank data.
The weak credit growth reflects continued uncertainty in private investment and broader weaknesses in the financial sector.
Revenue mobilisation is another major challenge. The National Board of Revenue collected Tk415,473 crore in FY2025-26, against a target of Tk503,000 crore, leaving a shortfall of Tk87,527 crore, or about 17.4 per cent.
The country’s external debt has also increased, reaching around $78 billion in February 2026.
Bangladesh borrowed nearly $86 billion in foreign loans between FY2008-09 and FY2025-26, while repaying just over $31 billion in principal and interest combined during the period.
Foreign assistance commitments and disbursements also declined in FY2025-26, falling by 37 per cent and 6 per cent respectively, while loan repayments increased by 11 per cent.
BNP Chairman and Prime Minister Tarique Rahman has pledged to restore discipline in the economy and move the country towards a more sustainable development model.
The BNP has set an ambitious target of doubling Bangladesh’s nominal GDP from around $460 billion to $1 trillion by 2034.
Rashed Al Mahmud Titumir, the prime minister’s adviser on planning and economic affairs, said the government’s economic approach was anchored in the principle of “Bangladesh for Everyone”.
He recently described the newly announced Family Card programme as a landmark initiative aimed at reforming the social safety-net system, reducing wastage and ensuring that benefits reach their intended recipients.
The government has also expanded social-security and agricultural support programmes as part of its efforts to protect vulnerable households and strengthen rural livelihoods.
Economists and policy experts, however, say employment must return to the centre of economic policy.
They argue that startups, freelancing and the information and communications technology sector have growth potential but cannot alone absorb the country’s expanding workforce.
Greater investment in skills development is needed in labour-intensive manufacturing, agro-processing, logistics, small and medium-sized enterprises and other productive sectors.
Energy security is another immediate concern.
Experts have urged the government to address the energy crisis without delay, pointing to disruptions in LNG supplies, persistent gas shortages and fertiliser plant shutdowns as evidence that Bangladesh’s energy system remains vulnerable.
They say reliable energy supplies are essential for restoring industrial production, attracting private investment and creating jobs.
The first six months of the BNP government therefore present a mixed but comparatively more stable economic picture.
Strong remittances, resilient exports, easing inflation and improved foreign exchange reserves provide evidence of progress after years of economic stress.
However, weak private-sector credit, a distressed banking system, poor revenue collection, rising debt-servicing costs and energy insecurity remain significant obstacles.
The government’s central challenge now is to convert the early signs of macroeconomic stabilisation into sustained investment, employment and productivity growth.
Delivering on its ambition to build a $1 trillion economy will depend not only on stronger headline indicators but also on restoring confidence in the banking system, improving revenue mobilisation, ensuring reliable energy supplies and creating productive jobs across the economy.
