Tarique Rahman, MP-elect, steps into the power grid facing a fragile economy, deep structural weaknesses and rising public expectations. The mandate is strong but the economic ground is weak. Restoring stability now becomes the biggest test.
Growth has slowed. Inflation is still biting. The International Monetary Fund (IMF) warns Bangladesh faces mounting macro-financial risks driven by weak revenue, banking fragility and policy delays.
Inflation is projected to remain high while growth recovery stays moderate, meaning pressure on prices, jobs and living standards will continue in the short term.
Banking is in biggest danger zone. Default loans have exploded to historic highs, crossing Tk6.5 trillion, nearly one-third of total loans. The central bank says the system may need up to a decade to recover. Weak banks, poor governance and political lending culture have already damaged investors' confidence in financial system. Slowed credit to businesses is choking investment and growth.
Revenue weakness is squeezing the state. Tax collection remains structurally low, limiting spending on development, jobs and social protection. IMF stresses urgent tax reform and fiscal discipline to avoid future instability. Without stronger revenue, the government cannot sustain growth or reduce debt pressure. Debt and external pressure are rising silently. Bangladesh must repay foreign loans in large amount now while maintaining reserves and currency stability.
Economists warn heavy debt servicing, if combined with weak exports or remittance could strain macroeconomic stability reducing policy space.
The economy remains exceedingly dependent on garments. Global agencies warn that over-reliance on a single export sector makes growth vulnerable adding to external shocks, slowing investment and limiting diversification. Structural reform and new industries are now critical for long-term resilience.
Confidence deficit still haunts the economy. Businesses remain cautious after political uncertainty, weak governance and slow reform momentum. Slowdown in investment, job stress and youth unemployment continue to weigh on recovery prospects
The challenge is clear and immediate. Stabilizing banks, increasing government revenue; controlling inflation; restoring investors' confidence are more important at this moment. Diversifying exports creating more jobs are on high priority. Failure will deepen fragility. Success will redefine the economy, experts say.
World Bank's former lead economist at Dhaka office Zahid Hussain says Tarique Rahman's economic reform agenda are facing huge expectations amid a fragile economy. A full five-year overhaul won't happen overnight, the first 100 days must deliver fast-track reforms and projects. MPs must actively drive implementation through parliament-after being given proper institutional support.
The budget is critical to overhaul the economy. Election pledges like agri and food cards require major funding, alongside recent government salary hikes. Poor balance could derail reforms.
Structural reforms are urgent for the new government; clean up the scandal-hit banking sector, quick decision on port management-retain or replace existing arrangements without disrupting trade are over-due. Address the energy crisis; cut in business costs by wiping extortion through strong political will and strict enforcement must be on high priority.
Inflation remains a top threat. Breaking dominance of oligarchs and ensuring fair competition will be toughest challenge during Rahman. National unity, immediate action on burning issues, visible results are essential-failure isn't an option, Zahid Hussain warned.
