Dhaka: The Centre for Policy Dialogue (CPD) on Wednesday urged the newly elected government to enforce strict macroeconomic discipline and fast-track structural reforms. It warned that without decisive policy action, the ongoing recovery of Bangladesh’s economy could remain fragile amid persistent inflation, weak private investment, and financial sector stress.
According to United News of Bangladesh, presenting a paper titled ‘Bangladesh Economy: Trends, Challenges, and Policy Priorities for the Newly Elected Government’ at a roundtable held at BRAC Inn Centre in the city, CPD Executive Director Dr. Fahmida Khatun stated that the country stands at a ‘critical juncture’ as it prepares for LDC graduation in November 2026 and navigates a post-election transition. The event, titled ‘Looking into Bangladesh’s Development: Priority for the Newly Elected Government in the Short to Medium Term,’ was organised by CPD.
The presentation revealed that real GDP growth declined to 3.49 percent in FY2025 from 4.2 percent in FY2024, reflecting macroeconomic pressures and subdued investment. However, growth rebounded to 4.50 percent in the first quarter of FY2026, up from 2.58 percent in the corresponding period a year earlier, indicating a gradual recovery in economic activity. Inflationary pressure has eased somewhat, with inflation falling to 8.66 percent in January 2026 from 9.7 percent in June FY2024, driven mainly by a slowdown in food inflation.
Private sector credit growth dropped to a record low of 6.10 percent in December 2025, underscoring persistent weakness in private investment. In contrast, net government credit growth surged to 32.19 percent in December 2025, reflecting increased reliance on bank borrowing to finance fiscal needs. Revenue mobilisation remains a major concern, with the tax-to-GDP ratio falling to 6.78 percent and the revenue-to-GDP ratio to 7.81 percent in FY2025.
The paper highlighted growing stress in the banking sector. The non-performing loan (NPL) ratio rose sharply from 12.56 percent in June 2024 to 35.73 percent in September 2025, largely due to the adoption of internationally aligned loan classification standards. Although the NPL ratio declined to 30.60 percent in December 2025 following extensive loan rescheduling, CPD warned that underlying governance weaknesses need urgent attention.
Export performance weakened during July-January FY2026, recording a negative year-on-year growth of 1.93 percent, mainly due to a slowdown in readymade garment shipments. Import payments grew by 3.91 percent over the same period, driven primarily by higher imports of intermediate goods. However, remittance inflows stood at $19.43 billion during July-January FY2026, marking a robust 21.76 percent year-on-year increase.
Fahmida outlined five broad policy priorities for the short to medium term, including containing inflation, reviving private investment, strengthening fiscal discipline, restoring banking sector confidence, and enhancing external resilience. CPD emphasized that sustained macroeconomic discipline, institutional reforms, and policy consistency will be critical to restoring investor confidence, safeguarding stability, and steering Bangladesh towards inclusive and resilient growth in the coming years.