During the year 2025, Bangladesh is facing a sequence of economic problems that have caused a dramatic reduction in the economic position of the country. Bangladesh, which used to be hailed as one of the fastest-growing economies in South Asia, is presently in the middle of a major phase of economic turbulence. In the last ten years, the country has recorded some great achievements like getting poverty levels down, growth in industrial production, and maintaining a GDP growth rate of over 6%. Here, I will present the current state of Bangladesh economy below and attempt to learn what factors have contributed to the current economic scenario of Bangladesh.

In this graph, it demonstrates that there are economic risks that face Bangladesh in the next two years and that will lead to another impact on the economic growth of Bangladesh.

I will also discuss what led to the downfall of the economic condition in Bangladesh within the last several years in the given discussion. Firstly, the political instability that has played a huge role in hampering the economic growth in Bangladesh. With the political upheaval due to quota system caused by student protest since mid-2024 July Revolution, is considered to have a great political turmoil in Bangladesh.

Between July 16 and early August 2024, a "July massacre" occurred in which more than 1,000 protesters were killed during an intense government crackdown. In mid-2024 the economy slowed sharply as the quarter-on-quarter growth slowed to 1.8%, due to political unrest and labor protests. In this regard, the provisional regime is constantly challenged on the economic and institutional front, as the crime is increasing, the democratic traditions weakened, and the human rights and media freedom of the same are watched upon internationally, thus further challenging the political stability.

The second aspect is about the textile and garment industry and manufacturing industries. The crisis has hit hard this sector (more than 80% of the Bangladesh exports and about 4 million of workers) which is export oriented.

The dramatic rise in US tariffs (up to 20%), the cancelled orders, and the stopped production have had substantial effects on competitiveness and employment. There has also been a collapse in industrial production due to high interest rates and augmented operating costs. Additionally, the foreign direct investment has crashed which is a negative growth of about 8.8% in FY (Fiscal Year)2023-2024. The inflation in Bangladesh is estimated to increase by an average of 8.56% to 11.38% in 2023-2024 and will therefore influence economic growth because of currency depreciation, high importation costs, and living costs that have increased resulting in reduced purchasing power and a scenario where the real wages will fail to correspondingly increase with the inflation.

Because of these reasons, my family and relatives have faced financial crisis in the last one year as the declining economic prospects of Bangladesh have caused the cost of living to go up with the increased prices of commodities and the slowed down industrialization. This has also led to the rise in the crime rate, and most people no longer see the larger part of Bangladesh as a safe place to live in.

 Finally, unemployment among young people is especially high among the people aged between 18 and 24 at about 15% as the highest in the three decades and a spark that could result in social outbursts and a sign of a structural failure in the labor force. Thus, inflation, unemployment, and current account deficits continue to be a challenge. Inflation and unemployment have been demonstrated to hamper growth of the GDP, and the trade deficit of the country has been widening. The foreign direct investment is still low, and the external shocks still pose a risk to economic growth.

Such aspects have also added to the low GDP growth rate in Bangladesh, which is about 1.8 % in the July-September quarter of 2024, the worst ever recorded since the onset of the pandemic. The agriculture, industry, and services sector growth rates shrank to 0.16%, 2.13% and 1.54% respectively. Presently, Bangladesh is undergoing its lowest development rates in years, because of inflation, economic issue, and social unrest. Improved revenue, institutional reforms and reduced inflation may help the country recover by FY2026 as estimated by the World Bank with the support of IMF loan.

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My name is Saha Sharmi; I was born in 1995.

I'm from Bangladesh and currently live in Japan.  can speak Bangla, English, Indian languages and Japanese.

My motto in life is "It's okay to fail but never give up no matter what the situation is.” My hobbies are traveling and eating food from different countries. In my free time, I also love to cook Bangladeshi food.

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