[🇧🇩] Monitoring Bangladesh's Economy

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Inflation biggest concern for Bangladesh: WEF

Inflation has been identified as the biggest risk to Bangladesh in 2025, according to a World Economic Forum (WEF) report released on Wednesday.

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Inflation biggest concern for Bangladesh: WEF

Bangladesh has long been grappling with stubbornly high inflation, as the 12-month average inflation rose to 10.34 percent in 2024 from 9.48 percent a year earlier. Photo: Prabir Das

Inflation has been identified as the biggest risk to Bangladesh in 2025, according to a World Economic Forum (WEF) report released on Wednesday.

In its Global Risks Report 2025, the WEF, an independent international organisation, stated that extreme weather events — such as floods and heatwaves — and pollution are two other significant risks to the economy of South Asia.

Bangladesh is one of the 10 countries where pollution has been identified as one of the top three risks, according to the report.

Particularly in densely populated countries such as Bangladesh and India, pollution has become one of the most critical challenges to tackle, the report said.

"A pollution conscious green transition is needed," it added.

The WEF's latest report also noted that unemployment and economic downturn are two remaining challenges for Bangladesh, which has been grappling with stubbornly high inflation, devaluation of its currency, falling foreign exchange reserves, and slowing investment and business growth.

The 12-month average inflation in Bangladesh rose to 10.34 percent in 2024 from 9.48 percent a year earlier.

In 2022, annual average inflation was 7.7 percent, according to the Bangladesh Bureau of Statistics (BBS).

The Centre for Policy Dialogue (CPD), a prominent think-tank in Bangladesh, contributed to the findings of WEF's report.

The Global Risks Report 2025 highlights an increasingly fractured global landscape, where escalating geopolitical, environmental, societal, and technological challenges threaten stability and progress.

The WEF report incorporates insights from over 900 experts worldwide.

"As we enter 2025, the global outlook is increasingly fractured across geopolitical, environmental, societal, economic and technological domains," it said.

"Over the last year, we have witnessed the expansion and escalation of conflicts, a multitude of extreme weather events amplified by climate change, widespread societal and political polarisation, and continued technological advancements accelerating the spread of false or misleading information."

"Optimism is limited as the danger of miscalculation or misjudgment by political and military actors is high. We seem to be living in one of the most divided times since the Cold War," the report added.

The latest Global Risks Report stated that more than half of respondents—52 percent—anticipate an unsettled global outlook over the next two years, a proportion similar to last year.

Another 31 percent expect turbulence, and 5 percent foresee a stormy outlook.

"Combining these three categories of responses shows a four-percentage-point increase from last year, indicating a heightened pessimistic outlook for the world through 2027," it said.

Compared to this two-year outlook, the landscape deteriorates over the 10-year timeframe, with 62 percent of respondents expecting stormy or turbulent times, it added.

"This long-term outlook has remained similar to last year's survey results in its level of negativity, reflecting respondents' skepticism that current societal mechanisms and governing institutions are capable of navigating and mending the fragility generated by the risks we face today."​

 

[Saif]

Bangladesh economy to grow 4.1% in FY25: World Bank report

Bangladesh’s economy may grow 4.1 percent in FY25, the WB said in its latest Global Economic Prospects released Thursday

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Bangladesh economy to grow 4.1% in FY25: World Bank report

The World Bank (WB) has kept its forecast for Bangladesh's economic growth almost unchanged for the current fiscal year (FY) 2024-25, citing subdued investment and industrial activity amid heightened political uncertainty.

Bangladesh's economy may grow 4.1 percent in FY25, the WB said in its latest Global Economic Prospects released Thursday.

The growth projection is slightly higher than its October forecast of 4 percent for FY25.

Growth is projected to pick up to 5.4 percent in FY26, assuming broad political stability, successful reforms in the financial sector, an improved business climate, and increased trade, the WB report said.

"Easing inflation is expected to boost private consumption," said the multilateral lender.

The WB's latest forecast is also higher than the 3.8 percent growth projection made by the International Monetary Fund (IMF) in December last year, which cited output losses caused by the July uprising, floods, and tighter policies.

As per the predictions of the two multilateral agencies, Bangladesh's Gross Domestic Product (GDP) growth in FY25 would be the lowest since FY20, when the Covid-19 pandemic wreaked havoc on the globe.

Earlier this month, the Bangladesh Bureau of Statistics (BBS) said GDP growth was 1.81 percent in the July-September quarter of FY25.

The first-quarter growth was the lowest since the second quarter of FY21, when the pandemic continued to cripple the economy.

In the first quarter of FY24, GDP grew 6.04 percent.

The WB said inflation in Bangladesh has remained persistently high, and monetary policy has been tightened further.

The 12-month average inflation in Bangladesh rose to 10.34 percent in 2024, up from 9.48 percent a year earlier.

In 2022, the annual average inflation was 7.7 percent, according to the BBS.

In December, the IMF kept its projection of inflation in Bangladesh elevated for the current fiscal year, ending on June 30, 2025.

The WB said political turmoil in mid-2024 dampened economic activity and worsened investor confidence.

It said growth in FY24 is estimated to have slowed to 5 percent, a downward revision of 0.6 percentage points from previous projections.

"Supply constraints, including energy shortages and import restrictions, weakened industrial activity and led to increased price pressures."

"High inflation reduced the purchasing power of households, slowing services growth."

The WB also cautioned about the risk of social unrest in countries, including Bangladesh, where youth unemployment has risen since the pre-pandemic decade.

It said elevated social unrest could weigh on productivity and investor confidence in South Asia.

"In addition, the incidence of political violence has increased in some countries in the region," it added.

More frequent or more severe weather events could reduce food production, drive up food price inflation, and raise living costs, the WB report added.

The Washington-based multilateral agency said slower-than-projected growth in major trading partners and the resulting weaker demand could dampen activity, particularly in countries with strong economic ties to Europe and the USA, including Bangladesh, Pakistan, and Sri Lanka.

"For example, countries in Europe account for about half of total goods exports in Bangladesh."​

 

[Bilal9]

Indian origin IMF administrators pressuring Bangladesh govt. on behalf of Indian Govt., Bangladesh may cut off relations with IMF.

 

[Saif]

Will protect investments of new entrepreneurs: Yunus

Yunus held a meeting with young entrepreneurs at the state guest house Jamuna where15 male and female entrepreneurs participated

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Will protect investments of new entrepreneurs: Yunus

Photo: UNB

Encouraging the country's young and new entrepreneurs, Chief Adviser Professor Muhammad Yunus today said they want to make sure that new entrepreneurs do not face any problems with their investments and can work safely to significantly contribute to the country's economic growth.

"I learned a lot from your discussions and suggestions today. We want to build poverty-free Bangladesh," he said.

Stating that he got ideas about the future path from today's discussions, he added, "Please stay in touch with us."

Yunus held a meeting with young entrepreneurs at the state guest house Jamuna where15 male and female entrepreneurs participated.

In the meeting with the chief adviser, the entrepreneurs shared the stories of their struggle to become financially independent and sought advice from the CA on various issues relevant to their journey ahead.

Thanking Yunus, the entrepreneurs described how the investment received from the Grameen Telecom Trust, formed in 2010 to promote social business, helped the entrepreneurs to become financially independent from zero.

Most of the entrepreneurs who participated in the meeting are doing business with investments from the Grameen Telecom Trust and Grameen Trust, according to the CA's press wing.

Some of them have received investments for the sixth and fifth time.

Yunus was excited to hear the stories of the entrepreneurs' struggles and wanted to know what further steps could be taken for the entrepreneurs.

At the meeting, the entrepreneurs suggested increasing the publicity of the Grameen Telecom Trust and Grameen Trust's programmes for young entrepreneurs to promote social business.

They said most people do not know about these initiatives and many poor people will benefit if the publicity is increased.

They also urged Yunus to provide appropriate training to entrepreneurs in addition to investing in them.

The entrepreneurs said many cannot grow their businesses due to lack of skills.

If appropriate workshops can be organised, more skilled and successful entrepreneurs will be developed in each district, they said.

Principal Coordinator for SDGs Affairs Lamiya Morshed, Managing Director of Grameen Trust Tasmina Rahman and Managing Director and CEO of Grameen Telecom Trust Ashraful Hasan were, among others, present.​

 

[Saif]

Snapshots of Bangladesh’s major export challenges

Bangladesh’s economy is significantly dependent on its export earnings. The export sector has faced several challenges under the interim government.

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Snapshots of Bangladesh’s major export challenges

Bangladesh's economy is significantly dependent on its export earnings. The export sector has faced several challenges under the interim government. Business insiders opine that the recent political upheaval has created an uncertain environment for businesses. The interim government's efforts to restore stability are becoming visible, but the situation has led many international buyers in the garment sector to reconsider placing orders in Bangladesh, anticipating potential disruptions.

The garment sector accounts for over 80 percent of Bangladesh's export earnings and has experienced significant obstacles due to worker protests demanding higher wages and better working conditions. These protests have led to the closure of many medium-scale factories as well as production delays, causing concerns among international buyers about the continuity of Bangladeshi suppliers.

Rising temperatures due to climate change have increased heat stress among garment factory workers, potentially affecting productivity, lead times, and timely shipments. Global brands are legally required to address these conditions in their suppliers' factories under new EU regulations, exerting pressure on Bangladeshi exporters to improve working conditions.

In July 2024, discrepancies were identified between export figures reported by the Export Promotion Bureau (EPB) and the National Board of Revenue (NBR). The EPB acknowledged a $3.16 billion mismatch in export data for the July-September period of the previous fiscal year, causing a temporary suspension of regular export data publication. This has confused stakeholders and may affect trade decisions in the future.

The government reduced export incentives across various sectors in July 2024, aiming to encourage exporters to raise competitiveness ahead of the country's graduation from the least developed country (LDC) status in 2026. Business leaders have expressed concerns that curtailing incentives could adversely impact industries already struggling with increased production costs and global competition.

The snowball effect of political turmoil, labour unrest, and reduced incentives has strained the economy. The interim government is seeking international assistance to rebuild the economy, but challenges persist in restoring investors' confidence and ensuring sustainable growth.

To address the major export challenges, the interim government has adopted the following strategies:

* Restoring law and order, which is crucial to regain the confidence of international buyers. The interim government has been working on industrial security and anti-corruption reforms to achieve this.

* Improving working conditions and ensuring fair wages in the garment sector, which are vitally important. The government is reviewing the wage structure and addressing legal concerns for workers to prevent further unrest.

* Reducing logistics costs, which can significantly boost exports. Implementing the National Logistics Policy 2024 aims to lower business costs, enhance competitiveness, and integrate Bangladesh into the global value chain.

* Curtailing dependency on the garment sector by supporting other industries such as leather, agriculture, and electronics. Inconsistent policies have been barriers to export diversification, and addressing these can open new markets. The government is putting efforts into reducing inconsistency.

* While the government has set an ambitious export target of $110 billion by 2027, economists and business leaders are pessimistic about its feasibility due to persisting challenges. Setting achievable goals can help in better planning and execution. The interim government is reassessing previously set export targets to establish more realistic and achievable goals, considering recent data discrepancies and global economic trends.

* Investing in infrastructure, such as ports and transportation networks, which can improve efficiency and reduce costs, making Bangladeshi exports more competitive. The National Logistics Policy 2024 also emphasises infrastructure development.

* Implementing the Export Policy 2024-27, which would help increase annual export earnings to $110 billion by 2027, focusing on product diversification, infrastructure development, and market expansion.

* Strengthening diplomatic and trade ties, particularly with key partners like the US and the EU. The interim government is engaging in dialogues to foster these relationships, aiming to improve market access and trade conditions.

* Stabilising the labour market, especially in the garment sector. The government is working to resolve disputes and improve working conditions to ensure uninterrupted production and maintain buyer confidence.

* Efforts are underway to rectify data collection processes to provide accurate export statistics, which are essential for informed policymaking and maintaining credibility.

* Promoting the inclusion of new products in the export basket, such as handicrafts, vegetables, and light engineering, to reduce dependency on traditional export sectors and tap into unexplored markets.

* Developing logistics, ports, and transportation networks, which is important to enhance export efficiency and reduce costs, thereby increasing competitiveness in the global market.

Lastly, a stable political environment is essential to attract foreign investment and reassure international buyers of Bangladesh's reliability as a global trading partner.

Dr Nasim Ahmed is additional secretary at the Ministry of Home Affairs.​