Policy reform needed as economy slows down

Bangladesh is currently facing significant economic challenges, as the country is experiencing one of its slowest growth periods in recent years. The GDP growth rate for the 2024-25 fiscal year has fallen to 3.69 per cent, marking the weakest performance since the COVID-19 pandemic. This slowdown is caused by several interlinked factors: lower private investment, reduced consumer spending, weakened export earnings, and a general decline in industrial activity.

As a result of slack demand and increased operational costs, many enterprises-particularly SMEs-are struggling. A number of factories have downsized or suspended production, leaving thousands unemployed. The decrease in government revenue collection further limits the state's ability to finance development projects, social safety nets and stimulus programmes.

Experts warn that unless the situation improves, this economic deceleration could culminate into a long-term economic crisis, affecting both economic stability and social well-being. In response, they recommend that policymakers take immediate actions, such as reducing bureaucratic barriers to investment, providing financial support and retraining programmes for unemployed workers, promoting diversification into other export markets and reforming the tax system to improve revenues without placing additional burdens on ordinary citizens.

Overall, this is an emphatic call for concerted and strategic government intervention to protect livelihoods, stabilise the economy, and restore public and investor confidence in Bangladesh's economic future.

Jarin Tasnim Samia

Dhaka

jarin.samia@northsouth.edu