Bangladesh’s economy has avoided a severe collapse over the past year, but structural fragilities, sluggish private investment, and persistent inflation threaten its long-term recovery, economists and policymakers said at a policy dialogue in Dhaka.

The Centre for Policy Dialogue (CPD) hosted the event, 365 Days of the Interim Government, with Labour and Shipping Adviser Brig-Gen (retd) M Sakhawat Hossain as the chief guest and CPD Distinguished Fellow Prof Mustafizur Rahman presiding.

Bangladesh Bank Governor Dr Ahsan H Mansur said the interim administration inherited a banking sector “right at the edge of the cliff”.

He credited swift engagement with international financial institutions and a commitment to meeting foreign-payment obligations with averting a crisis similar to Sri Lanka or Pakistan.

Since 14 August 2024, the central bank has not sold dollars from reserves, instead buying at Tk122. Inflation has dropped below 10%, the balance of payments has returned to surplus, and legislative reforms are underway, including amendments to the Bank Companies Act, Money Laundering Act, and Deposit Insurance Act.

Dr Mansur outlined measures to tighten bank oversight, promote digital banking, expand nano-loans, and restructure the revenue department.

Sakhawat described the July Uprising as “unprecedented” and acknowledged limits to the government’s achievements. He cited a major banking scandal in which a firm obtained Tk480 billion in loans without collateral.

CPD’s review credited the government with stabilising reserves, boosting remittances, and improving the trade balance, but warned these gains had yet to improve living standards. Its scorecard rated nine indicators “green”, 18 “yellow”, and 11 “red”, with health, education, revenue mobilisation, and governance among the weakest areas.