Economy rebounds but major challenges lie ahead: Planning Adviser
Planning Adviser Dr Wahiduddin Mahmud -File Photo
DHAKA, Jan 28, 2026 (BSS) – Planning Adviser Dr Wahiduddin Mahmud today said that although Bangladesh’s economy has made a turnaround, but major structural challenges still lie ahead.
He said financial discipline in the banking sector had completely collapsed during the previous government, while money laundering and mismanagement left the sector in a fragile condition. “However, various measures taken by the current government have begun to bring positive changes to the economy,” he added.
The Planning Adviser made the remarks while addressing a seminar titled “Economic Stability and Challenges for the Next Government” and the “ERF Scholarship-2026 Award Ceremony”, as the chief guest organised by the Economic Reporters’ Forum (ERF) in the capital.
Dr Mahmud said imports of industrial raw materials have increased, export growth has been maintained, while the external sector remains stable. “Foreign exchange reserves are also gradually rising, while GDP growth is likely to be close to 5 percent,” he said.
Regarding inflation, he said the central bank governor wanted to reduce it rapidly, but inflation would decline at a slower pace and on a general point-to-point basis, inflation has come down from 11 percent to 8 percent
The Planning Adviser noted that credit flow to the private sector has already declined significantly. In this situation, he said, the issue for maintaining high interest rates for a prolonged period should be reviewed afresh in the interest of small and medium entrepreneurs.
Terming the energy sector as one of the major future challenges, he said a large portion of power generation and industrial capacity remains unused due to gas shortages. Although there is significant potential in the solar energy sector, a lack of proper planning caused several projects to fail in the past.
He informed that the government has promulgated Ordinance allowing electricity generated from private-sector solar plants to be sold to the national grid, which could play an important role in the future.
Reiterating the government’s tough stance against corruption, Dr Mahmud said the public procurement policy has been amended and all government tenders are now conducted 100 percent online. As a result, competition has increased and monopoly control has declined.
On the budgetary situation, he said the tax to-GDP ratio remains very low. Revenue earnings are mainly being used to meet operational expenditures, while spending on education, health and development relies heavily on borrowings, which is risky in the long run.
The Planning Adviser warned that it would take a long time to recover from the damage caused by money laundering and mismanagement in the banking sector.
Calling for a shift away from financing social sector development through foreign loans, he said projects unnecessarily dependent on foreign consultants are being cancelled.
Expressing concern over the education system, Dr Mahmud said sustainable development cannot be ensured through infrastructure alone without human resource development. Physical infrastructure can create a skeleton, but real development is not possible without skilled human resources, he said.
He said administrative efficiency has declined over the years due to deteriorating education standards. To remove frustration among the youth and harness the demographic dividend, there is no alternative to technical and quality education, he added.
Despite various limitations, the Planning Adviser said the government is working to stabilise the economy and implement necessary reforms, the outcomes of which will become clearer in the future.