Economic collapse averted, but industry stalled: Experts on interim govt’s tenure

The interim government succeeded in preventing a potential macroeconomic collapse during its 18-month tenure, but economists and business leaders say the real economy – particularly the industrial sector – has suffered significant stagnation.

The contrasting assessment emerged at a virtual roundtable titled “Interim Balance Sheet,” organised yesterday by the Power and Participation Research Centre, where analysts reviewed the economic performance of the administration that assumed office in August 2024.

Mamun Rashid, chairman of Financial Excellence Ltd, said the interim administration took office in August 2024 at a time when the economy was in “freefall.”

“At the very least, the collapse was halted,” he said, noting improvements in foreign exchange reserves following a rise in remittances routed through formal channels after anomalies in the banking sector were addressed.

However, Rashid said economic management largely remained “business as usual,” falling short of the structural reforms many had expected in the wake of the mass uprising. While the immediate bleeding was stopped, he argued, the economy failed to move into a phase of dynamic recovery.

Concerns from the industrial sector were more acute.

Bangladesh Chamber of Industries (BCI) President Anwar-Ul-Alam Chowdhury said the cost of doing business had risen by 30% to 35% over the past year and a half, pushing many firms to the brink of closure.

Despite paying higher tariffs, industries failed to receive an uninterrupted energy supply, forcing many factories to operate at just 40%-45% of capacity, he said.

The BCI president criticised what he described as the interim government’s “isolated” decision-making approach.

Summing up the interim government’s economic record, Power and Participation Research Centre Executive Chairman Hossain Zillur Rahman said the administration deserved credit for averting a financial crisis but warned that the incoming elected government would inherit a challenging situation.

“The macro-economy has been saved from a downward spiral, but the wheels of the real economy have slowed significantly,” he said, adding that the growing disconnect between policymakers and the business community has triggered a crisis of confidence that the next government must urgently address.