Needless to say, the events before and after the mass uprising of July-August 2024 put tremendous pressure on Bangladesh’s economy. It can be said that the economy has suffered severe bleeding due to loss of human lives, destruction of assets, and instability.
Even before this, the economy of Bangladesh had been reeling from the effects of the COVID-19 pandemic and the Russia-Ukraine war. In addition, widespread corruption, looting, and misgovernance during the previous government’s tenure have also been blamed for the fragile state of the economy.
Historically, all major popular uprisings in Bangladesh have had severe economic repercussions—strikes, blockades, and violent unrest led to disrupted commerce, reduced factory output, and impediments to transportation. Still, those involved in such situations often managed to recover their losses. This time, however, the situation feels markedly different.
1. Expectations Post-Uprising
Naturally, there was hope that the economy would recover swiftly under a new administration following the uprising. Optimists envisioned a return to prosperity, with lively markets, bustling trade, and festivals in full swing.
Yet recent reports tell a different story. Barring a few exceptions, the overall economic condition remains precarious. Instead of festivities, we are witnessing the dismantling of what once was. Even the convener of the White Paper Committee admits that Bangladesh’s economy is not on the right track, and certainly not under a new framework.
Instead, old policies, allocations, and priorities from the previous regime seem to persist. Still, three notable achievements of the current administration deserve mention:
(a) Containing inflation through a highly contractionary monetary policy;
(b) Maintaining a satisfactory level of foreign exchange reserves via sound fiscal planning; and
(c) Pulling the banking sector back from the brink of collapse.
These, admittedly, are no small feats. However, renowned economist Birupaksha Paul notes, “The government has shown no real urgency in addressing issues like structural inflation or growing unemployment. It has already retreated from its pledge to build an inclusive society. While it promised to break from the past, it now appears to be mimicking the same rules and norms of the previous Awami regime.”
2. Lawlessness and Economic Setbacks
Experts argue that the government should have prioritised law and order from the outset. For months, we witnessed arson attacks on factories, looting, extortion, and widespread vandalism of industrial facilities. International human rights organisations now say the country’s rights record is deteriorating.
According to the World Bank, nearly three million people have slipped into poverty in recent months. Many were barely staying afloat, but deteriorating economic and social conditions have pushed them over the edge. Analysts attribute this to persistent inflation, rising job losses, and sluggish economic activity. The World Bank warns that inflation may average 10% this fiscal year, forcing the poor to pay exorbitant prices for basic goods.
Businesses are gasping under the burden of 18% loan interest rates. Meanwhile, the first half of the fiscal year saw roughly 4% of the workforce lose their jobs. Wages fell by 2% for skilled workers and 0.5% for highly skilled ones. The national poverty rate is expected to climb further.
The same World Bank report also states that GDP growth may fall to 3.3% in FY2024–25, down from 4.2% the previous year, and 5.8% in FY2022–23. Additionally, the government’s debt-to-GDP ratio is projected to increase.
3. Competing Narratives
Pro-government economists argue that earlier reports on poverty reduction were based on fabricated data and that poverty levels were always high. Nonetheless, they agree with the World Bank’s conclusion that inflation, job losses, and economic stagnation are exacerbating poverty.
4. Political Distraction and Economic Inaction
Critics believe the government has focused more on political reform than economic revitalisation. Efforts to boost industrial output and trade remain weak. Though the old racketeers have gone, new ones have emerged unchecked.
As Nobel laureate Muhammad Yunus’s famed ‘Three Zeros’ vision—zero poverty, zero unemployment, and zero net carbon emissions—gets trampled, Bangladesh risks a grim future. The absence of business-, industry-, and environment-friendly policies has created panic in the private sector. In a climate of rampant mob violence, domestic investors are retreating, let alone foreign investors. Without investment, neither employment generation nor poverty alleviation is possible. The time for symbolic gestures is over. Unless economic freedoms are urgently restored, catastrophe may be imminent.
5. A Stark Warning
Economist Birupaksha Paul offers a sobering reflection: “This government didn’t come to power just to hold elections. The people expected more. Why, then, the fading optimism?” Quoting Tagore’s Shesher Kobita, he adds, “The rule of the weak is the most dangerous.” While the exact meaning may be ambiguous, disorder seems inevitable. The stock market reflects this, the banking sector is paralysed, and new investments are non-existent. High interest rates—although a necessary tool to curb inflation—have arrived far too late, thanks to the previous government’s artificial interest rate cap designed to placate the wealthy.
Postscript
A 2025 BBS survey found that one in three Bangladeshis paid a bribe in the past year—most commonly to BRTA, police, passport offices, land registries, and the courts. Only 27% of respondents believed they could influence government policy, and just 21% felt they had a voice in politics. And yet, the recent mass movement was rooted in demands for an end to corruption and a call for inclusive governance.
The author is an economist and former Vice-Chancellor of Jahangirnagar University.
Bd-pratidin English/ ANI
