Bangladesh’s economy ‘struggling but could be worse’

“The economy presents a mix of positive and negative indicators with the negative ones still outweighing the positive. The economy is struggling, and so are livelihoods but  it could have been much worse,” he said at a seminar on the publications Bangladesh State of the Economy 2025 and Sustainable Development Goals: Bangladesh Progress Report 2025 at the NEC Conference Room in the capital.

He said remittances have reached record levels, illicit financial outflows have slowed, revenue mobilisation has slightly improved, and electricity supply has remained largely stable and Bangladesh also handled recent natural disasters better than expected. “These are the indicators in my positive basket.”

On the other hand, inflation remains “very high,” growth has slowed, real wages have fallen, employment has stalled, exports have weakened in recent months, and investment remains depressed, he said citing recent World Bank report which shows an increase in the number of people who are poor or at risk of poverty.

Dr Hussain identified three reasons the situation did not deteriorate further.

The first, he said, is Bangladesh’s “deep social resilience,” which became most visible during the three turbulent days of the August 2024 upheaval when state institutions were largely absent. “There was no government, no police on the streets, no secretaries, no vice-chancellor, no central bank governor  and yet society did not collapse. Thomas Hobbes would turn in his grave seeing this,” he said.

The second factor is the interim government’s political management, which he said has reduced the intensity of partisan hostility.

He described it as a ‘cultural shift, where political actors increasingly criticise without targeting individuals by name.

He said nine months of sustained dialogue and more inclusive political engagement have contributed to a more civil environment.

All political parties criticising the interim government for bias is paradoxically, a sign of neutrality,”he added.

The third and most critical factor, Dr Hussain said, is macroeconomic management and the ongoing reform drive.

Bangladesh, he said, had long engaged in “self-destructive” economic behaviour that became institutionalised.

The past 18 months saw an attempt to correct this course, but real progress remains limited.

 “Willingness alone is not enough. There is no guarantee of success simply because the intention exists,” he said.

“Despite numerous commissions, committees, reports, workshops and consultations signalling the government’s reform intent, the number of ordinances and Cabinet decisions translating these into action has remained “very small,” he added.

“We still do not see major visible results on the ground,” Dr Hussain noted.

The seminar was attended by senior economists, policymakers, and development practitioners who discussed the economic outlook and progress toward the Sustainable Development Goals, reports UNB.