After assuming power, the incoming government is urged by economists to immediately address surging prices, restore public order, and create a conducive atmosphere for investments to spur job creation.
This advice comes as the BNP readies to take over the reins following a resounding victory in the national election held on February 12.
The experts point out that the new administration will be tasked with overseeing an economy grappling with persistent challenges such as high inflation, sluggish private investments, a fragile financial sector, and dwindling exports, despite showing some signs of recovery.
The economy recorded a modest growth of 3.97 percent in the fiscal year 2024-25, its slowest pace in five years, with projections indicating continued subdued growth in 2026.
The economists emphasize that supply-side limitations are a major factor driving the escalating cost of living. The current tight monetary policy enforced by the Bangladesh Bank has not effectively curbed inflation.
They suggest maintaining low import tariffs on essential goods, ensuring adequate supply, and enhancing market surveillance as crucial measures. They argue that relying solely on monetary policy, like keeping high interest rates, will not suffice to rein in prices.
Fahmida Khatun, the Executive Director of the Centre for Policy Dialogue (CPD), stresses the importance of addressing inflation as it impacts everyone’s real wages.
She further highlights that the government should focus on enhancing the investment climate and implementing coordinated monetary and fiscal policies to tackle supply-side issues.
Private-sector enterprises are also feeling the squeeze as rising costs eat into their profits.
Fahmida calls for concerted efforts to create fiscal space to accommodate the significant expenditures required for implementing interim government recommendations, including adjusting pay scales. With the country’s debt burden on the rise, enhancing revenue generation becomes imperative.
AK Enamul Haque, the Director General of the Bangladesh Institute of Development Studies (BIDS), underscores the necessity of fostering trust and improving the business environment to boost private investments.
He urges the incoming government to build on economic reforms initiated by the interim administration and fulfill key pledges from the BNP’s election manifesto.
Haque emphasizes the importance of combating corruption and extortion to create a conducive environment for investment.
Restoring law and order is deemed crucial for instilling confidence among investors, as emphasized by Prof Mohammed Helal Uddin, a member secretary of the Bangladesh Economic Association.
He stresses the need to address mob violence and extortion to provide a safe investment environment.
Prof Helal also advocates for transparent policies that allow entrepreneurs to anticipate regulatory changes and prioritize merit-based administrative appointments over political considerations.
KAS Murshid, a former director general of the BIDS, highlights the necessity of establishing a high-level coordination mechanism to streamline development policies.
He suggests involving beneficiaries at various levels to ensure effective policy design and implementation.
Murshid also calls for reforms to professionalize institutions, depoliticize the bureaucracy, and prioritize high-impact projects with adequate resources and political support for successful execution.
