The economic situation in Bangladesh evokes mixed feelings. On one hand, the government emphasizes the growth of foreign investments, the recovery of export volumes, and the stabilization of reserves. On the other hand, experts point to persistent issues such as inflation, ineffective tax revenues, and the vulnerability of the financial sector.
At first glance, Bangladesh shows signs of economic stability. However, beneath this illusion lie serious problems: rising inflation, declining purchasing power, and the threat of financial instability.
In its October 2025 report, the International Monetary Fund (IMF) noted that the government is taking steps to improve macroeconomic management and reforms. Nevertheless, it also highlighted three key vulnerabilities: low tax revenues, fragility of the financial sector, and high inflation, which affect the foundations of the economy.
The economic situation in Bangladesh before the student protests in 2024 also left much to be desired. Despite GDP growth of 7.10% in 2022 (according to the Bangladesh Bureau of Statistics, 2023), and per capita income exceeding that of several neighbors, including India (World Bank, 2022), economic problems remained relevant.
According to the World Bank's October 2025 Macro Poverty Outlook, the poverty level at the international threshold of $3 per day (PPP 2021) could rise to 8.9%, affecting about 1.2 million people. In Dhaka, the extreme poverty rate is expected to be around 9.3%, potentially impacting about 3 million residents.
In March 2025, Moody’s Investors Service changed its outlook for the banking system of Bangladesh from "stable" to "negative," citing rising credit risks, worsening macroeconomic conditions, and political instability (Moody’s Banking Outlook: South Asia, March 2025).
Although inflation has slightly decreased overall due to falling food prices, non-food inflation rose to 9.13% in October 2025, up from 8.98% in September. Living costs continue to rise, making housing, transportation, and other goods increasingly unaffordable.
The employment rate fell to 56.7% in 2024, with particularly noticeable losses in the service sector, according to preliminary data from the BBS labor force survey for 2024. At the same time, wage growth is stagnating, and inflation continues to erode the purchasing power of the population.
In the financial sector, Bangladesh reached the highest level in Asia for the share of non-performing loans (NPL), which amounted to 20.2% of total loans in 2024 (according to the Asian Development Bank's Financial Stability Monitor, 2025). Non-bank financial institutions (NBFI) face even more severe challenges: the share of overdue loans reached 33.83%, and the capital-to-risk ratio (CRAR) turned negative at -6.46%.
These figures highlight structural deficiencies in the financial system. A slowdown in deposit inflows and difficulties in meeting reserve requirements limit lending to the private sector. The ready-made garment sector, which has long been the backbone of the country's exports, also shows signs of strain.
According to data from the Export Promotion Bureau (EPB), export revenues have declined for three consecutive months: by 2.93% in August, 4.61% in September, and 7.43% in October 2025. Exports of woven products fell by 5.33%, while knitwear dropped by 10.76% in October.
Experts from BGMEA and BKMEA point to several factors, including global tariff pressures, loss of competitiveness, and emerging textile hubs in Africa supported by China. Thus, despite some successes, the country faces serious challenges. For further progress, Bangladesh needs not only confidence but also stability, transparency, and sound policy.
From 2006 to 2022, the poverty rate decreased from 41.5% to 18.7% (according to the World Bank Poverty & Equity Brief, April 2023). In the last financial year (2024-25), GDP growth slowed to 3.97%, according to the Bangladesh Bank Economic Review (October 2025) — significantly below the long-term average of around 6%.
Source: https://www.thedailystar.net/business/news/bangladeshs-economy-really-doing-alright-4043221
