[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Investment, savings slide as growth slows

Bangladesh's investment and savings ratios declined sharply in FY2024–25, reflecting a broader economic slowdown that has pushed GDP growth to its lowest level since the pandemic. The latest official data point to weakening domestic demand and a more cautious investment climate. Economists w

thefinancialexpress.com.bd

Investment, savings slide as growth slows
BBS data signals deepening economic strain amid inflation, weak demand

FHM Humayan Kabir

Published :
Mar 29, 2026 09:17
Updated :
Mar 29, 2026 11:35

Bangladesh's investment and savings ratios declined sharply in FY2024–25, reflecting a broader economic slowdown that has pushed GDP growth to its lowest level since the pandemic.

The latest official data point to weakening domestic demand and a more cautious investment climate. Economists warn that the twin decline in investment and savings could have far-reaching consequences for employment, income growth and poverty reduction, raising fresh concerns over the country's macroeconomic stability.

According to the recently released final estimates of the Bangladesh Bureau of Statistics (BBS), the investment-to-GDP ratio fell to 28.54 per cent in FY25, down from 30.70 per cent in the previous FY24.

Domestic savings dropped by nearly two percentage points to 21.98 per cent, while national savings followed a similar downward trajectory, settling at 27.67 per cent in FY2025.

Domestic savings declined to 21.98 per cent of GDP in FY2025 from 23.96 per cent in FY2024, the official data showed. Similarly, national savings fell to 27.67 per cent of GDP in FY2025 from 28.42 per cent in FY2024, according to the BBS final estimates.

Analysts say this contraction underscores a cautious environment for both public and private capital, with private investment dropping to 22.03 per cent of GDP in FY2025 from 23.96 per cent in FY2024. Public sector investment also declined slightly to 5.80 per cent of GDP in FY2025, from 5.91 per cent in the previous fiscal year, the data showed.

Economists attribute the decline to a combination of persistently high inflation and weak domestic demand, which has forced many households to prioritise immediate consumption over long-term savings.

Furthermore, high interest rates and exchange rate volatility, with the average dollar rate used for BBS calculations rising to Tk 120.82, have significantly eroded real purchasing power and surplus income.

The drop in these key indicators aligns with a revised GDP growth rate of 3.49 per cent for FY2025, down from the provisional estimate of 3.97 per cent. This marks the third consecutive year of deceleration for the Bangladesh economy.

While the industrial sector posted modest growth of 3.71 per cent, both the services and agriculture sectors slowed, expanding by 4.35 per cent and 2.42 per cent respectively.

In a rare positive development, per capita income rose to Tk 334,511 (US$2,769) in FY2025, up from Tk 304,102 (US$2,738) in FY2024, according to BBS data. However, analysts caution that the increase in dollar terms partly reflects exchange rate adjustments and nominal growth, rather than a broad-based improvement in living standards.

The current economic landscape suggests that, without a significant boost in investment and savings, growth recovery may remain uncertain.​

 

[Saif]

The next phase of digital payments in Bangladesh

When I look at how payments were traditionally made in Bangladesh till about a decade ago, I am reminded how our financial system relied on physical presence. Paying utility bills, settling supplier payments, or processing salaries meant paperwork, signatures, and visits to banks or service centers

thefinancialexpress.com.bd

The next phase of digital payments in Bangladesh

Sabbir Ahmed
Published :
Mar 29, 2026 23:51
Updated :
Mar 29, 2026 23:51

When I look at how payments were traditionally made in Bangladesh till about a decade ago, I am reminded how our financial system relied on physical presence. Paying utility bills, settling supplier payments, or processing salaries meant paperwork, signatures, and visits to banks or service centers. The system was familiar and dependable, but it was also slow and paper-heavy and not designed for scale. As the economy expanded and commerce accelerated, the cost of manual processes became increasingly visible in time lost, operational inefficiencies, and delays in opportunities.

By the late 2010s, mobile phones had become a key channel for financial transactions. Mobile Financial Services such as bKash and Nagad expanded rapidly, enabling millions to send, receive, and manage money while bringing formal financial services closer to people with limited access to banking.

A key turning point came in 2012 with the launch of the National Payment Switch Bangladesh (NPSB). By allowing banks to connect with one another and enabling smoother ATM, POS, and online fund transfers, it laid the groundwork for an extremely efficient and integrated system. Over time, it also strengthened the links between banks and Mobile Financial Services. In many ways, this was the beginning of a more connected, real-time payments ecosystem in Bangladesh.

According to Bangladesh Bank data, digital transactions including mobile wallets, internet banking, and other electronic channels increased from 366.7 million in 2023 to 403.1 million in 2024, with total transaction value exceeding Tk 763.40 billion.

Although cash continues to play an important role in daily life, this steady growth shows that more people are choosing digital payment methods. To me, this reflects not just usage, but growing trust.

Mobile Financial Services (MFS) have transformed how money moves in our system. Peer-to-peer transfers, merchant payments, and everyday transactions can now happen digitally at scale. Interoperable QR codes and mobile platforms have made digital payments more accessible, bringing greater convenience and financial inclusion.

Visa has been present in Bangladesh for more than three decades, supporting the evolution of the country's digital payments ecosystem through innovation-led solutions. Small and medium enterprises (SMEs) have emerged as a key pillar of the economy, enabling inclusive growth and new economic opportunities.

For small and medium enterprises (SMEs), the growth of digital and contactless payments has created meaningful opportunities. Digital payments allow businesses to receive funds faster, maintain clearer transaction records, and reduce reliance on cash handling. QR payments, contactless cards, and mobile wallets also make it easier for merchants to accept payments from customers instantly. Over time, these digital transaction histories can help businesses build financial credibility and potentially improve their access to formal credit. In this way, digital and contactless payments are helping strengthen the SME sector, which remains a key driver of Bangladesh's economy.

During the COVID-19 pandemic, digital platforms further demonstrated the resilience of the payment ecosystem. Government wage payments, particularly in sectors such as ready-made garments, moved largely to digital channels. What began as a necessary response during a difficult period has since become a lasting behavioral shift. For many businesses and consumers, digital payments are no longer an alternative, they have becoming part of the regular routine.

The momentum we see today is supported by an evolving policy environment, as the newly formed government reaffirms its focus on strengthening Bangladesh's digital financial ecosystem. Through regulatory support and engagement with industry stakeholders, these efforts are helping accelerate the adoption of secure and efficient digital payment systems across the country.

As digital payments expanded, we have seen firsthand how important security becomes in building long-term confidence. Convenience alone is not enough though. One of the most important advancements in recent years has been tokenisation. Instead of transmitting a customer's actual card number during a transaction, tokenisation replaces it with a secure digital code. This significantly reduces the risk of fraud while ensuring that transactions remain fast and seamless. Through Visa's Token Service, we work with banks, digital wallets, and merchants to enable secure payments across mobile apps, contactless taps, and online platforms. From my experience, innovation in security is not optional, it is essential. Trust is the foundation on which any digital ecosystem must be built.

Cash remains important in Bangladesh, and challenges such as digital literacy and system integration require continued attention; but the direction is clear. Digital payments are reducing friction across the economy shortening settlement times, lowering transaction costs, improving transparency, and expanding access to formal finance.

As digital payments reach new and first-time users, ensuring robust and seamless authentication becomes critical. To address this need, Visa is introducing Payment Passkey to further strengthen authentication in digital commerce. Designed to move beyond traditional one-time passwords, Payment Passkey is built on FIDO® standards and allows consumers to authenticate transactions using their device's native unlock methods such as fingerprint, facial recognition, or PIN. With a simple one-time setup, consumers can experience consistent authentication across participating merchants, improving both security and user experience.

Visa continues to be a global leader in digital payments, with a presence across more than 200 countries and territories, connecting consumers, businesses, and governments worldwide with its innovative solutions. Last year, we also introduced innovations around Visa Direct Account (VDA), which expands the way money can move through the Visa network. Visa Direct enables fast and secure transfers directly to bank accounts, supporting use cases such as remittances, business payments, and person-to-person transfers. By enabling funds to move quickly and reliably between accounts, these solutions help improve efficiency for businesses and provide greater convenience for consumers.

We are actively collaborating with leading issuing banks in Bangladesh to bring these innovations into the domestic e-commerce ecosystem. The objective is clear: reduce friction, improve transaction approval rates, strengthen security, and create a safer environment for digital commerce. For me, this partnership between global technology and local institutions is what enables progress that is both secure and sustainable.

The real change lies in how Bangladesh's payments ecosystem is evolving through stronger connectivity between institutions, improved security standards, and collaboration across the financial sector. While the purpose of transactions remains the same paying bills, buying groceries, or sending money to family, the speed and convenience have transformed. Today, a QR scan or a simple mobile tap can complete payments in seconds, often without any paperwork.

The process is the same: value exchanged for value. What has changed is the distance between intent and completion. And in reducing that distance, we are not simply making payments easier, we are helping position Bangladesh's economy in a favourable position to operate with greater efficiency, resilience, and global connectivity in the years ahead. At Visa, we are proud to play our part in enabling that progress alongside our partners across the ecosystem in our continued commitment to Bangladesh's progress.

Sabbir Ahmed is Country Manager, Visa - Bangladesh, Nepal, and Bhutan.​