Reviving private sector-led growth will be critical to restoring economic momentum in Bangladesh and ensuring sustainable development, according to a new policy report released on Monday by the Metropolitan Chamber of Commerce and Industry (MCCI).
The report, titled “Reviving Private Sector-led Economic Growth: Critical Issues and Priorities Facing the New Government in Bangladesh,” was presented by M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, at a programme organised by MCCI.
The study provides an evidence-based assessment of Bangladesh’s current economic challenges and outlines reform priorities aimed at restoring macroeconomic stability, improving the investment climate and enabling sustainable growth driven by the private sector.
Speaking at the event, Reaz said Bangladesh stands at a “critical juncture” as the economy shifts from crisis management toward recovery amid persistent structural constraints and global uncertainty.
He noted that although the country enjoyed decades of strong economic growth averaging around 6–7 percent, momentum has slowed significantly since 2022 due to global shocks, domestic policy weaknesses and institutional challenges.
According to the report, Bangladesh’s GDP growth has fallen to below 4 percent in FY2025, while high inflation, declining private investment and tighter credit conditions have continued to weigh on business confidence and economic activity.
The report highlights structural weaknesses in public finance, the banking sector, export competitiveness and the investment climate as major factors undermining the country’s growth prospects. Without comprehensive reforms, it warns, these vulnerabilities could push the economy toward prolonged stagnation.
The study identifies seven priority areas for policy reform to revive private sector-led growth. These include macroeconomic stabilisation, fiscal management and debt sustainability, banking sector reforms, export diversification, private investment mobilisation, energy security and skills development.
It emphasises that restoring macroeconomic stability should be the immediate priority for policymakers. The report recommends stronger coordination between monetary and fiscal policies, improved revenue mobilisation and a more flexible exchange rate regime to help control inflation and rebuild foreign exchange reserves.
In the financial sector, the report highlights the urgent need to tackle rising non-performing loans and governance weaknesses in banks, warning that these issues are restricting credit flows and discouraging private investment.
Export diversification is another major challenge. While Bangladesh’s exports remain heavily dependent on the ready-made garment sector, the report calls for targeted policies to develop new high-potential industries and strengthen integration into global value chains, especially as the country prepares for its post-LDC transition.
To attract greater investment, the study recommends improving regulatory predictability, modernising business-related laws and strengthening the investment promotion framework to encourage both domestic and foreign investors.
The report also stresses the importance of reforming the energy sector to ensure reliable and affordable power supply for businesses, alongside expanding skills development programmes to build a future-ready workforce capable of supporting productivity growth and job creation.
MCCI leaders said the report aims to provide policymakers with a comprehensive reform roadmap to restore economic confidence and help Bangladesh move toward a more resilient and competitive growth model.
Source: UNB
Bd-pratidin English/ Jisan
