Bangladesh Economy Faces Strain but Shows Resilience

Bangladesh’s economy is undergoing a period of adjustment as global inflation, currency volatility, and declining foreign exchange reserves continue to pressure financial stability. However, steady performance in exports, remittances, and agriculture has helped the country maintain moderate stability despite these challenges.

Economists warn that to ease pressure on the currency market and stabilise the economy, urgent measures are required to boost export earnings and increase remittance inflows. Overall inflation is hovering around 9 percent, with food inflation particularly high. The rising prices of essentials such as rice, lentils, and cooking oil continue to strain household budgets. Although the government has introduced market monitoring initiatives and import subsidies, the benefits have yet to reach ordinary consumers.

The ready-made garment (RMG) sector, which contributes nearly 83 percent of total export earnings, remains the backbone of Bangladesh’s economy. From January to September 2025, the sector generated around USD 38 billion in export income. However, weaker demand in major markets such as Europe and the United States has prompted calls for product diversification and the exploration of new trade destinations.

Remittances continue to play a vital role in supporting the economy. Expatriate Bangladeshis sent home approximately USD 22 billion in the last fiscal year, mostly from the Middle East, Europe, and North America. Analysts say these inflows have helped stabilise household consumption and cushion the pressure from rising import costs.

Agriculture remains a key anchor of economic stability. Increased production of rice, fish, and vegetables has supported food security and sustained rural livelihoods. The government has expanded investment in agro-processing and offered incentives to modernise the sector.

Major infrastructure projects—including the Padma Bridge, Dhaka Metro Rail, the Karnaphuli Tunnel, and the Rooppur Nuclear Power Plant—are expected to create long-term growth opportunities. However, private investment continues to lag due to concerns over policy consistency, energy supply, and high financing costs. Business leaders are urging reforms to restore investor confidence.

Despite short-term challenges, economists say Bangladesh’s long-term prospects remain promising. A young workforce, expanding digital industries, and a growing domestic market provide a strong foundation for recovery. With prudent fiscal management, transparent governance, and renewed focus on productive investment, Bangladesh is positioned to regain momentum and return to a higher growth trajectory within the next two years.

Author: A senior journalist