Bold steps needed to revive confidence in investment

The current state of the country’s economy is deeply concerning. In particular, the decline in private investment and credit flow has reached an unprecedented level in the past two decades. According to Bangladesh Bank data, credit growth in the private sector has fallen to its lowest point in 22 years—standing at just 6.1 per cent at the end of December 2025. For a developing economy, this figure is not merely a statistic; it is a warning sign of stagnating industrialisation.

Abnormally high interest rates and the excessive cost of borrowing have made new investment and industrial expansion virtually impossible. The direct impact is being felt in employment. It must be remembered that sustainable job creation cannot be achieved unless dynamism returns to the private sector.

At the same time, inconsistencies in monetary policy are a cause for concern. On the one hand, a tight monetary stance is being advocated; on the other, broad money supply has increased from 7 per cent in June 2025 to 9.6 per cent in December. This contradiction suggests significant flaws in the strategy to control inflation while achieving growth. The adverse effects are already evident in the export sector. Over the past six months, exports have declined steadily, reaching minus 14.25 per cent in December 2025. Such a fall in our global market competitiveness signals instability in the economy.

At this critical juncture, expectations from the new government are high. To restore confidence in the private sector, its first priority should be visible improvement in law and order and the assurance of business security through swift and decisive measures. Business leaders now seek not merely verbal assurances, but concrete guarantees for investment protection.

Simultaneously, comprehensive reform of the ease of doing business framework, improvement of supply chains, and the uninterrupted provision of energy are imperative. Without necessary reforms in the banking sector to revitalise credit flow, neither small nor large entrepreneurs will feel confident about making long-term investments.

We hope the new government will formulate a coordinated and sustainable economic roadmap founded on discipline and transparency. Revitalising the economy requires moving forward with the private sector as a key partner—there is no viable alternative.

Writer: President, Dhaka Chamber of Commerce and Industry (DCCI)