United News of Bangladesh

Bangladesh is currently facing a range of macroeconomic challenges, including a slowing economy, high inflation and a decline in foreign investment, said Hoe Yun Jeong, Country Director of the Asian Development Bank (ADB) Resident Mission in Bangladesh on Wednesday. He said the country is facing a decline in foreign direct investment (FDI) and an alarming rise in non-performing loans (NPLs) within the banking sector, with insufficient foreign exchange reserves adding to the mounting pressure, hindering the country’s ability to navigate the economic turbulence. World Bank, ADB approve budget support worth $1.1 billion Yun Jeong made the remarks while delivering his introductory speech at the launch of the ADB’s flagship publication, Asian Development Outlook (ADO) April 2025, held at the ADB office in Dhaka. “Nevertheless, it is encouraging to note that the interim government has prioritised macroeconomic stability, along with institutional, social and political reforms,” Jeong said. The ADB expects inflation in Bangladesh to remain elevated, with monetary policy likely to stay tight, focusing on resolving vulnerabilities in the banking sector, particularly the issue of rising NPLs. On the external front, Jeong noted that the current account deficit is expected to narrow slightly, supported by strong remittance inflows. Bangladesh, ADB ink $600m loan deal for structural reforms In the fiscal sector, the ADB anticipates the fiscal deficit will remain close to the FY2024 level, driven by improved revenue mobilisation and increased recurrent government spending. Jeong warned of downside risks to the economic outlook, including persistent inflation, prolonged monetary tightening, political uncertainty, adverse weather events and a potential global slowdown triggered by new US tariffs. Looking ahead, he expressed the hope that the government would accelerate reforms to enhance domestic revenue collection, address high NPL levels, ensure energy security and stimulate private sector investment. He also stressed the importance of improving public investment management, especially in enhancing project readiness and implementation capacity. “As a longstanding development partner, ADB will continue to support the government through policy-based loans, project investments, and technical assistance,” Jeong said. He highlighted ADB’s focus on private sector development, disaster resilience, digital transformation, regional cooperation, and the provision of regional public goods and empowerment. “Despite global challenges, Bangladesh’s economy remains resilient. To sustain higher growth, the country must implement essential reforms without delay, especially as it prepares for its graduation from Least Developed Country (LDC) status in November 2026,” he added. Jeong also mentioned an upcoming joint report by ADB and the Organisation for Economic Co-operation and Development (OECD), titled “Roadmap for Investment Policy Reforms and Sustainable Development in Bangladesh,” which outlines key reforms needed to boost trade and attract FDI in the post-LDC graduation era. “Economic growth is only part of the equation — sustainability is the other. We reaffirm ADB’s continued support to the government in implementing necessary reforms and pursuing key projects to help Bangladesh achieve its sustainable development goals,” he said.