Private investment in Bangladesh has fallen to a 10-year low while inflation, high interest rates and policy uncertainty continue to challenge businesses, according to a paper presented by the Dhaka Chamber of Commerce and Industry (DCCI) on Monday.
The paper titled “Current State & Future Outlook of Bangladesh Economy: Private Sector Perspective (July–December 2025)” was presented at a seminar held at the DCCI auditorium in the city.
According to the paper, private investment stood at 22.03% of GDP in FY2025, reflecting a decade-low level as high lending rates, political uncertainty, currency volatility and bureaucratic delays discouraged both domestic and foreign investors.
Bangladesh’s economy reached an estimated $456 billion in FY2025 with a growth rate of 3.49%, while exports rose to $48.28 billion and remittance inflow reached $30.33 billion, the study said.
However, inflation remained elevated at 8.49% in December 2025, with non-food inflation rising to 9.13%, posing a continued burden on consumers and businesses alike.
The chamber noted that rising interest rates exceeding 16% in many cases have slowed private sector borrowing and investment, while private sector credit growth dropped to 6.1% in December 2025, the lowest in at least four years.
The paper also highlighted growing global uncertainties that could affect Bangladesh’s trade and investment outlook.
It said the global economy is expected to grow by 3.3% in 2026, but geopolitical tensions, including conflicts involving the United States, Israel and Iran, and potential disruptions in global energy supply routes such as the Strait of Hormuz, could create long-term volatility in global trade.
In addition, new global tariff policies and shifting trade dynamics could further complicate export prospects for developing economies like Bangladesh, it added.
Bangladesh’s upcoming graduation from the Least Developed Country (LDC) status will bring new trade and financing challenges unless adequate preparations are taken, the DCCI warned.
Weaknesses in the banking and capital market systems could pose risks to development financing after graduation, while maintaining market access and export competitiveness will become increasingly difficult, it said.
The chamber recommended deferring LDC graduation by at least three years to allow the country more time to strengthen competitiveness, implement a transition strategy and adjust policies.
The paper also reviewed the performance and challenges of several key sectors—
Bangladesh’s readymade garment (RMG) exports reached $19.37 billion, although the sector faced negative growth compared to the previous period and continued to struggle with limited high-end product diversification.
The leather sector, the country’s second-largest export industry, recorded exports of $609.86 million in the first half of FY26, but holds only about 3% of the global market, highlighting the need for better compliance and infrastructure.
Pharmaceutical exports, meanwhile, increased 20.32% to $118.81 million, while light engineering exports grew 10.51% to $315.52 million during the same period.
Key recommendations
To improve the economic outlook, the DCCI proposed a series of policy measures, including broadening the tax base, introducing a fully automated tax management system and easing the policy rate gradually to encourage investment.
The chamber also suggested improving law and order, accelerating structural reforms, strengthening trade negotiations with new markets, and enhancing logistics and energy infrastructure to reduce business costs.
Strengthening supply chains, expanding renewable energy capacity and improving the ease of doing business were also identified as key priorities for sustaining long-term economic growth.
In the seminar, business leaders stressed that Bangladesh must take timely policy reforms to maintain macroeconomic stability and strengthen private sector confidence amid growing global and domestic challenges.
They said coordinated efforts in fiscal management, investment facilitation, trade diversification and infrastructure development will be crucial to sustaining economic growth and ensuring a smooth transition as the country prepares for its LDC graduation.
Bd-pratidin English/ ANI
