Bangladesh’s economy shows no sign of recovery from its prolonged slump. After three straight years of crisis, the situation has grown increasingly fragile.
The country is now facing a severe shortage of both domestic and foreign investment. Foreign investors are adopting a cautious, wait-and-see stance, while local entrepreneurs are hesitant to take on new projects or assume risks.
Meanwhile, numerous factories have closed, leaving thousands of workers unemployed, and the industries that remain operational are struggling to stay afloat. On top of this, business owners are concerned about the challenges that will arise after Bangladesh graduates from LDC (Least Developed Country) status, fearing that the loss of preferential tariff benefits could undermine the competitiveness of many sectors.
Business leaders say political instability and uncertainty are the main factors discouraging investors. Although the interim government has taken several initiatives, their tangible impact has yet to be seen. At present, entrepreneurs lack the confidence to invest and are waiting for the situation to stabilize.
According to them, political turmoil, high inflation, credit constraints, high interest rates, energy shortages, and the central bank’s tight monetary policies have pushed the economy to the brink. The high interest rate, they argue, is not business-friendly. If rates could be brought down to a single digit, it might at least encourage new investments. Export-oriented industries are also facing various banking complications. Many say that delays in loan or L/C (Letter of Credit) approvals are hampering production.
Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told Bangladesh Pratidin, “Who would think of investing by taking loans at 15–16 percent interest? No one would knowingly take on a losing venture. The industrial sector is in a moribund state — many factories have already shut down.”
He added, “The gas and electricity crisis still hasn’t been fully resolved. The biggest problem for businesses right now is banking. The banks seem indifferent — whether businesses collapse or survive doesn’t concern them. They are introducing new systems that are suffocating entrepreneurs. Business owners are paying the price for the plundering by bank owners. The way the S. Alam Group looted money from its own banks has inflicted the greatest harm on other businesses.”
Economists believe that if an elected government comes to power and restores political stability, there could be an opportunity to revive investment. However, no such visible progress has been seen under the interim administration. Large entrepreneurs are not interested in launching new projects at this stage.
Dr. A.K. Enamul Haque, Director General of the Bangladesh Institute of Development Studies (BIDS), told Bangladesh Pratidin, “The high cost of borrowing is indeed alarming. In this climate of political uncertainty, no one will invest by taking such expensive loans. Most businesspeople are waiting until the next election. Moreover, U.S. President Trump’s newly announced trade policy remains unclear. All things considered, Bangladeshi entrepreneurs are going through a very challenging period.”
Meanwhile, data from the Export Promotion Bureau (EPB) show that export earnings have declined for two consecutive months. In September, exports of ready-made garments, home textiles, agricultural products, jute and jute goods, non-leather footwear, and plastic products all fell.
Only frozen foods, leather, and engineering products showed slight signs of recovery.
Experts attribute the export decline to three main factors: the retaliatory U.S. tariffs, reduced consumer demand in Europe, and rising raw material costs. With no new investment flowing in, many factories have cut production, leading to a significant drop in export earnings.
