Bangladesh’s economy is under mounting pressure from slowing growth, stubborn inflation, and a slump in private investment, according to a new assessment by the Dhaka Chamber of Commerce & Industry (DCCI).
In its report Bi-Annual Review: Current State & Future Outlook of Bangladesh Economy (H2 FY25)”, the chamber cited both global headwinds and domestic policy constraints as key factors weighing on the economy. It called for urgent government action to avoid a deeper downturn.
“Private investment has fallen to 22.48% of GDP in FY ’25, the lowest in five years. Openings of letters of credit and imports of capital machinery have also declined,” said DCCI President Taskeen Ahmed while presenting the review in Dhaka. He stressed the need to strengthen law and order and ensure reliable energy supplies to restore business confidence.
The chamber warned that efforts to curb inflation have inadvertently slowed credit growth and dampened economic activity, creating risks of a medium-term crisis. Private sector credit expanded by only 6.4% in June 2025—the weakest growth in 22 years.
Energy shortages are further squeezing industries, with a daily gas supply deficit of more than 1,000 MMCFD forcing manufacturers, including garment factories, to cut production. At the same time, the banking sector remains fragile, with non-performing loans rising to Tk 5.3 lakh crore—over 27% of all outstanding loans. The capital market has also been hit, with the DSEX index down 7.2% in June compared to December 2024.
To address the crisis, DCCI recommended easing loan conditions, lowering interest rates to encourage investment, diversifying exports, and ensuring long-term energy security through LNG contracts and local gas exploration.
The report also raised alarm over Bangladesh’s upcoming graduation from Least Developed Country (LDC) status, cautioning that the economy is not yet ready for the loss of trade benefits. The chamber suggested seeking a three-year deferment to strengthen competitiveness and develop a transition strategy.
Economists echoed the concerns. GED member Monzur Hossain said graduation planning must involve both government and private sector actors, adding that opportunities lie in supply chain development, high-end manufacturing, and SME growth. CPD fellow Mustafizur Rahman noted that while Bangladesh may request an extension, approval would rest with the UN General Assembly, and preparations must continue regardless.
The DCCI report concluded that without decisive reforms, broadening the tax base, reducing bureaucratic hurdles, and implementing sector-specific strategies, Bangladesh risks eroding its hard-earned resilience and progress in poverty reduction.
