Dhaka: The economy of the country has narrowly avoided a large-scale disaster, thanks to various initiatives and reforms introduced by the interim government over the past year following the transition of power, stated Executive Director of CPD Dr. Fahmida Khatun.
According to Bangladesh Sangbad Sangstha, during a dialogue organized by the Centre for Policy Dialogue (CPD) on ‘365 Days of the Interim Government’ held at a hotel in the capital, Dr. Fahmida highlighted that the banking sector reform was a significant initiative among many taken by the interim government. This has resulted in increased inward remittances and export earnings, while the foreign currency reserve has stabilized, halting its previous decline.
Dr. Fahmida noted that although the interim government successfully eased inflation upon assuming responsibility last year, ongoing institutional weaknesses, such as low revenue collection, continue to challenge the economy. “Inflation may have eased, but many persistent challenges remain,” added Fahmida, emphasizing that the recent decrease in inflation is a positive sign but does not fully capture improvements across the broader economic structure.
The CPD’s assessment employed a scorecard system with green, yellow, and red indicators to evaluate 38 issues based on benchmarks set the previous year. According to the scorecard, inflation control fell into the green zone. Dr. Fahmida mentioned that despite positive indicators in exports, imports, reserves, and remittances, challenges like unemployment and insufficient public sector management reforms still limit the benefits of short-term economic improvements.
CPD Distinguished Fellow Professor Mustafizur Rahman highlighted that the interim government’s primary goal upon taking over was restoring macroeconomic stability, a goal he believes has been achieved. He mentioned that the CPD had initially set expectations for the interim government and is now reviewing the outcomes. “At that time, there was high inflation, rising unemployment, currency devaluation, declining ADP implementation, and falling remittance and export earnings. There was a challenge in macroeconomy,” Professor Mustafizur added.
Reflecting on the past year, Professor Mustafizur stressed the importance of evaluating the current status of various key indicators. While some targets have been met, others have not, and some initiatives are just beginning. He warned that the true test will be converting this stability into investment and job creation to provide relief to people’s lives.
The CPD’s scorecard serves as a tool to guide the next phase of economic policymaking. Addressing structural weaknesses will be critical to sustaining economic stability and ensuring long-term growth. The report flagged deep-rooted issues across multiple sectors, emphasizing the need for further review of bad loans and asset quality despite the reorganization of bank boards and the formation of task forces.
Bangladesh Bank’s adoption of international loan classification standards and the establishment of a special credit line to restore lending were positively noted. However, progress in the capital market remains limited, while SME lending policies and enhancements in migrant worker support were commended.
The CPD also noted the lack of progress in export diversification and tariff reforms for post-LDC graduation, as well as delays in updating labor policy. Although agricultural subsidies have been raised, broader energy security challenges persist. CPD acknowledged the introduction of a renewable energy policy as a positive development.
On governance and social spending, CPD highlighted investments in physical infrastructure but noted a lack of focus on social sectors. Efforts to curb waste and fraud in mobile financial services were recognized, though recommendations from the White Paper have seen limited follow-through, and preparations for LDC graduation remain inadequate.
With the national election set for February 2026, CPD cautioned that major reforms are unlikely in the coming months. However, it urged the government to maintain macroeconomic stability measures, continue inflation control, expand open market sales, and sustain support for the ultra-poor.