Bangladesh's economy, in the process of recuperating from the impact of the Covid-19 pandemic, has encountered a significant hurdle in the form of soaring inflation rates nearing 10% in recent months. Adding to these economic challenges is the recent resignation of Prime Minister Sheikh Hasina, leading to a military takeover that raises concerns about the country's financial stability, liquidity problems, and foreign exchange reserves.
Even before the political crisis unfolded, various international agencies had recommended structural reforms to support Bangladesh's economic growth and maintain stability. Despite its status as one of the world's fastest-growing economies with a high GDP per capita, calls for reforms have intensified to address pressing issues such as inflation, liquidity, and forex reserves. The country aims for an inflation rate of 6% and a GDP growth rate of 6.75% as stated in its recently passed budget, which included reduced spending in response to economic challenges.
Additionally, Bangladesh received $1.15 billion from the IMF in late June, the third installment of a loan package totaling $4.7 billion. The World Bank's Bangladesh Development Update report projected a GDP growth of 5.7% for the country between July 2024 and June 2025, slightly higher than the previous fiscal period. The importance of implementing fiscal, financial sector, and monetary reforms was emphasized by the World Bank Country Director, urging Bangladesh to enhance macroeconomic stability and reignite growth through bold reforms.