Navigating economic uncertainty

As inflation, devaluation of currency, and trade deficits have risen, remittances have emerged as a savior for Bangladesh's economy. With over 10 million Bangladeshis working abroad, their remittances regularly support the country's foreign exchange reserves, keeping the Taka stable and funding imports of staple items like fuel and food.

In 2025, while exports have been bruised by global market downturns and foreign direct investment is questionable, remittance inflows have been remarkably resilient. The continued stream of foreign exchange has saved a worse balance-of-payment crisis and eased the burden on the central bank during a period of economic weakness.

Yet excessive reliance on remittances also carries high risks. Migration costs are rising, host countries' employment and visa policies are tightening, and informal channels still skim off sizable portions. Excessive reliance on remittances may also delay long-overdue structural reforms in essential areas such as trade, industry, and taxation.

To ensure such vital inflow is sustained, institutions to assist migrant workers must be strengthened by the government, skills training has to be enhanced, and diplomatic efforts must be stepped up to secure labor contracts abroad. At the same time, the transaction costs must be reduced and channels for remittances formalized through electronic platforms and banking networks to secure and upscale these earnings.

Lastly, a dynamic remittance economy is a necessary shock absorber-but not a substitute-for stable growth. Remittances cannot replace industrialisation-driven growth, export diversification, and sound economic management. But they can buy the country precious time to pursue more extensive reforms and weather external shocks. Bangladesh must move quickly to salvage this economic lifeline-while building in place a more durable future.

Farzan Jawed Mashfi

Student, BBA, North South University

farzanjawed.16@gmail.com