Written by The Banking Post
Bangladesh has regained a degree of macroeconomic stability, but the improvement has come with slower growth, subdued investment and shrinking purchasing power, economists and business leaders said at a policy dialogue in Dhaka on Sunday.
The discussion took place at the launch of the latest Monthly Macroeconomic Insights, where speakers pointed to rising foreign exchange reserves, a more stable exchange rate and a modest easing of inflation as signs of stabilisation. At the same time, weak import growth and cautious business sentiment were flagged as indicators of soft domestic demand.
The principal economist presenting the outlook described 2026 as a year of stabilisation amid ongoing political uncertainty. He warned that the banking sector’s burden of about Tk 6.4 trillion in non-performing loans risks locking the economy into a low-growth cycle marked by high interest rates, elevated inflation and weak investment, making a return to 6 per cent growth unlikely in the near term.
Headline inflation eased to around 8.3 per cent in November, while the exchange rate has become more predictable. However, speakers said this stability has involved a clear trade-off, as borrowing costs remain high and investors continue to adopt a wait-and-see stance ahead of the national election.
Business leaders noted that persistently high food inflation continues to erode purchasing power, particularly for lower- and middle-income households. They argued that durable inflation control will require supply-side reforms, better market management and smarter trade policies, alongside monetary restraint.
On fiscal policy, concerns were raised over Bangladesh’s low tax-to-GDP ratio, which remains among the weakest regionally and globally. Speakers called for an integrated tax system to broaden the base, noting that only a small share of registered taxpayers submit returns.
The discussion also highlighted policy gaps in rice imports, as domestic prices rose by double digits despite falling global prices. With the policy rate at 10 per cent and inflation still above 8 per cent, the real policy rate remains below 2 per cent—one of the lowest in the region.
While welcoming steps to separate revenue collection from revenue policy, economists cautioned that despite a 15 per cent rise in revenue in the past five months, the fiscal year could still end with a shortfall of about Tk 650 billion.
