The global economy is projected to grow by just 2.8% in 2025 — a signal of potential crisis ahead. Disruptions in global supply chains, driven by the US-China trade war, inflation, and protectionist trade policies, are expected to hit developing economies like Bangladesh the hardest.
This analysis was presented at the 30th annual council of the International Chamber of Commerce – Bangladesh (ICCB).
Speaking at the event held on Saturday at The Westin Dhaka, ICCB President Mahbubur Rahman said, “Bangladesh’s economy is heading toward a major shock. According to the World Bank, the country’s GDP growth in FY2024–25 could be just 3.3%. The IMF and ADB predict it to be slightly higher at 3.8% and 3.9%, respectively.”
Mahbubur Rahman noted that overall inflation has crossed 10%, with food inflation reaching 14%. Declining investment and political uncertainty have further weakened the economy.
The report stated that by the end of 2024, the volume of defaulted loans reached Tk3.45 trillion, most of which belonged to state-owned banks. Nineteen banks have reported a capital shortfall totalling Tk1.71 trillion. In response, the government has initiated reform measures such as dissolving bank boards and pushing for bank mergers.
ICCB expressed concern over Bangladesh’s upcoming LDC graduation by 2026, noting that the country may lose duty-free market access for readymade garments. This could lead to tariffs of up to 11.5% in the EU and UK markets.
Mounting global instability poses fresh challenges
At the council, Mahbubur Rahman also highlighted global instability — including the Red Sea crisis, the war in Ukraine, tensions in the Middle East, and the potential return of Donald Trump in the US — as additional complications. He stressed the need for strategic preparedness to survive these challenges.
Energy security: The devaluation of the taka and reliance on imports have increased energy costs. Investment in renewables and domestic energy exploration was recommended.
Revenue shortfall: Tax revenue collection remains below 10% of GDP. The restructuring of the National Board of Revenue (NBR) was strongly urged.
Climate and food security: Floods, droughts, and salinity driven by climate change could cut economic growth by up to 2% annually.
Investment and export diversification: Bangladesh attracted just $3 billion in foreign direct investment in 2023, compared to Vietnam’s $39 billion. Greater emphasis was advised on the pharmaceuticals, agro-processing, and IT sectors.
Cybersecurity: With the digital economy expanding, the risk of cyberattacks is rising. A national cybersecurity framework and legal infrastructure need to be introduced urgently.
Proposed 35% US tariff: The US proposal to impose a 35% tariff could severely affect Bangladesh’s apparel sector and employment. ICCB recommended forming a task force under the commerce ministry to address the issue.
BBIN corridor prospects: Implementation of the Bhutan-India-Nepal-Bangladesh corridor could boost the region’s combined GDP to $8.3 trillion by 2035, positioning Bangladesh as a strategic transit hub.
Bd-pratidin English/ ANI