United News of Bangladesh

Restoring law and order and rebuilding investor confidence remain the most pressing challenges for Bangladesh’s business sector, as the BNP-led government seeks to steer the economy out of a prolonged slowdown, business leaders and economists said. They stressed that sustained stability and clear policy direction will be essential to revive investment and fasten the economic recovery. During the 18-month tenure of the interim government following the 2024 mass uprising, they said, the country’s business sector experienced a severe slump. Although some political stability has returned after the 13th parliamentary election held on February 12, the sector has yet to show signs of meaningful recovery. BGMEA pushes for quick release of Tk 5,700cr RMG incentives According to the business leaders, regaining the confidence of entrepreneurs—many of whom have lost trust in the system—and sustaining improvements in law and order will be critical for economic revival. President of the Dhaka Chamber of Commerce & Industry (DCCI) Taskeen Ahmed said curbing extortion must be the government’s top priority to restore business confidence. “To ensure a stable business environment, extortion has to stop first. Corruption and bureaucratic complexities in government offices must also be addressed,” he said. Taskeen pointed out that even after the fall of the Awami League government, businesses have continued to face extortion at similar or, in some cases, higher rates. “Factories still have to pay extortion money for trucks entering and leaving premises. For the current government, stopping extortion is the biggest challenge. If this is resolved, businesses will regain some relief,” he said. While extortion remains a major concern for local entrepreneurs, large-scale investors are equally worried about corruption and administrative bottlenecks in government offices. The business leaders fear that without institutional reforms, foreign and large domestic investors will remain hesitant to commit long-term investments in Bangladesh. President of the Bangladesh Textile Mills Association (BTMA) Showkat Aziz Russell said the country is passing through a critical period. “No entrepreneur feels confident about making long-term investments in Bangladesh at this moment. The government’s first task is to restore that confidence,” he said, stressing the need to eliminate bureaucratic red tape and the culture of 'passing the pillow' within ministries. The ready-made garment (RMG) sector, the backbone of the country’s exports, is also under significant strain. More than 400 garment factories reportedly shut down during the interim government’s tenure. Many factories are struggling to pay wages and festival bonuses ahead of Eid and have sought financial support from the central bank. In a letter to Bangladesh Bank, Acting President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Inamul Haq Khan cited geopolitical shifts, global recessionary pressures and tariff wars as key reasons behind declining export earnings. He said export income fell by 2.43 percent in the first six months of the current fiscal year, while back-to-back letters of credit (LCs) dropped by 12.90 percent in November 2025. Lower unit prices of garments, deferred shipments and postponed orders have further disrupted production. Factories are also struggling with rising operational costs, including wages, utility bills, transport expenses and bank interest payments. Production capacity is gradually shrinking amid sluggish export activities. Meanwhile, a recent report by the International Institute for Strategic Studies (IISS) noted that Bangladesh’s economic stability largely depends on political stability. It said the BNP government faces strong short-term pressure to accelerate growth, curb inflation, raise foreign exchange reserves, attract foreign direct investment and enhance trade connectivity. The report also observed that state-owned enterprises and the banking sector remain structurally weak. Echoing similar concerns, the Centre for Policy Dialogue (CPD) stressed the need for fundamental shifts in economic policy. CPD Additional Research Director Towfiqul Islam Khan identified three major challenges: weak macroeconomic stability, fragile private sector investment and employment conditions, and limited fiscal space for the government. Economists have advised the government to adopt prudent fiscal measures, gradually depreciate the currency, reduce incentives for remittance and export sectors, and revise the current budget realistically to better prepare for the next fiscal year. Business leaders said without decisive reforms in governance, economic management and institutional efficiency, restoring momentum in Bangladesh’s business and investment climate will remain an uphill task.  

Bangladesh's economic growth has slowed in recent months due to high interest rates, expensive energy supply and political uncertainty, according to trade body leaders and economists. They highlighted that costly funding and inadequate energy supply are hindering business expansion despite the country’s large workforce. Zakir Hossain Nayan, the Convener of the Anti-Discrimination Business Forum at the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told UNB that the domestic business sector is struggling due to high interest rates and the rising exchange rate of the US dollar. “People have reduced their consumption due to high inflation within their income limitations. As a result, Bangladesh's internal trade suffered severely in July and August last year, though it is now slowly gaining pace,” he said. He explained that banks are facing a liquidity crisis, as the past government and their affiliated businesses misused banking policies to secure large loans. This has left over a dozen banks unable to make new investments, while others remain cautious about injecting fresh funds into businesses. Given these conditions, he said that business growth will remain weak in the second half of 2024. He, however, said that the situation is improving as the government has increased money flow in the banking sector, the dollar crisis has eased, and inflation is trending downward. He also mentioned that the export sector remains resilient despite challenges such as unrest in the garment sector, with export orders increasing by 10–15% in 2025. Second report of committee to reform NBR expected next month, focusing on automation Taskeen Ahmed, President of the Dhaka Chamber of Commerce & Industry (DCCI), said that GDP growth in the first quarter of the current fiscal year was only 1.8%, while the manufacturing sector grew by just 1.43%. He noted that Bangladesh’s economy continues to face various challenges, even as it prepares to graduate from the Least Developed Country (LDC) category in 2026. To address these challenges, he emphasised the need for skill development in the SME sector, long-term access to low-cost credit, free trade agreements to boost exports to the Middle East and South Asia, infrastructure development to attract foreign direct investment (FDI), and reforms in revenue and related policies. Ahmed also urged the government to implement policies to promote exports beyond the readymade garment sector, highlighting the potential of pharmaceuticals, leather goods, agro-processing, semiconductors, light engineering, and information technology. He stressed that a comprehensive 'Smooth Transition Strategy' (STS) is crucial, with a strong role for the private sector. Ensuring low-cost funds is essential to revive business growth, he added. Khandoker Rafiqul Islam, former President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told UNB that the garment sector has been able to meet export targets in recent months by operating at full capacity. But he warned that sustaining this trend will be difficult if business expansion is stifled by high costs and an unreliable energy supply. He pointed out that the domestic textile sector is struggling due to shortages in working capital and energy supply. 42,000 Bangladeshi expats seek voter registration abroad The latest Bangladesh Purchasing Managers’ Index (PMI) report revealed a 1.1-point decline in February, recording a slower expansion rate of 64.6. The report attributed this drop to weaker expansion in construction and services, although agriculture and manufacturing continued to grow at a faster rate. The PMI, developed by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange with support from the UK Government and technical assistance from the Singapore Institute of Purchasing and Materials Management (SIPMM), provides timely insights into Bangladesh’s economic health. According to the report: The agriculture sector recorded its fifth consecutive month of expansion, with faster growth in new business, business activity, input costs and order backlogs. Employment contraction slowed. The manufacturing sector posted its sixth consecutive month of expansion, with faster growth in new orders, factory output, input purchases, and supplier deliveries. But new exports, finished goods, imports and employment grew at a slower rate, while order backlogs contracted faster. The construction sector saw its third month of expansion but at a slower pace. New business and construction activity slowed, while input costs rose. Employment returned to growth, and order backlogs contracted at a slower rate. The services sector expanded for the fifth month but at a slower rate. Growth in new business, business activity and employment decelerated. The order backlogs index turned negative, while input costs increased. Only an elected government can drive real economic growth: Abdul Awal Mintoo “Bangladesh's PMI readings indicate sustained expansion for the fifth month, driven by continued export growth and a seasonal uptick in agriculture, while construction and services posted slower expansion,” said M Masrur Reaz, Chairman and CEO of Policy Exchange. He cautioned that business confidence remains weak due to sluggish demand, energy disruptions, and ongoing protests. A sustained recovery, he argued, will depend on improved law and order, political consensus on the election roadmap, and the swift implementation of key reforms.