Bangladesh’s economy in FY2024-25 stands at a critical juncture, confronting deep-seated domestic weaknesses amid a challenging global environment. The interim government faces the dual challenge of stabilising macroeconomic conditions while implementing reforms to sustain growth. Revenue growth remains modest, casting doubt on achieving annual targets without an exceptional acceleration in the latter part of the fiscal year. The fiscal deficit is widening, with growing reliance on high-cost domestic borrowing that will increase future debt servicing pressures. Development expenditure execution is slow, delaying key infrastructure and social projects needed for long-term progress. Public expenditure is dominated by subsidies, transfers, and interest payments, limiting space for productive investment. Efforts to strengthen revenue administration, such as reorganising the National Board of Revenue into separate policy and management divisions, are positive but face internal resistance and uneven implementation.
Bangladesh’s economy stands at a critical juncture as the country prepares for its FY2025–26 budget amidst mounting macroeconomic challenges and structural imbalances. The interim government, formed following political turmoil in 2024, has inherited a fragile economic landscape defined by persistent inflation, weak revenue mobilisation, a growing fiscal deficit, and strained external balances. Although remittance inflows and exports have offered some support, underlying vulnerabilities in public finance, energy, banking, and the business climate continue to threaten long-term stability.
Bangladesh’s economy is navigating turbulent waters, facing compounded challenges from both domestic structural weaknesses and global economic headwinds. The interim government, formed in August 2024 after widespread protests, inherited an economy burdened by fiscal deficits, soaring inflation, dwindling foreign reserves, and a fragile banking sector. Whilst some reform measures have been initiated, persistent governance gaps, supply chain bottlenecks, and energy sector crises continue to threaten macroeconomic stability. The post-pandemic recovery has been uneven, disrupted by global commodity price shocks, tightening monetary policies in advanced economies, and domestic policy inertia.
Publication Period: November 2025