Reviving Economic Momentum Is Imperative

The interim government has left the national economy in a deeply fragile state, burdened with substantial arrears. Against this backdrop, the new government under the leadership of Tarique Rahman has begun its journey. Meeting the daily needs of citizens has now become an increasingly difficult task, and many within the administration are concerned about how public expectations can be fulfilled amid acute financial constraints.

The interim administration had announced a budget of Tk7.90 trillion for the current fiscal year, allocating Tk5.35 trillion for operational expenditure and Tk2.45 trillion for development. According to data from the Finance Division, government expenditure in the first six months stood at Tk2.58 trillion, including Tk2.20 trillion in operational spending and Tk318.41 billion in development expenditure. During the same period, revenue collection amounted to Tk2.22 trillion, resulting in a budget deficit of Tk353.33 billion—most of which has been financed through borrowing.

These figures clearly illustrate the condition in which the interim government has left the economy, effectively shifting a heavy debt burden onto the new administration. Limited fiscal capacity, rising debt obligations, and mounting pressure to deliver on public commitments constitute the three main challenges facing the government. In such circumstances, mobilising resources to implement political pledges will be extremely difficult.

The power and energy sector presents what has been described as a “trial by fire”. The Minister for Power, Energy and Mineral Resources has acknowledged that clearing the large volume of outstanding dues accumulated in recent years will be highly challenging. Currently, arrears in the power sector alone stand at around Tk450 billion. While the government is attempting to manage the situation, curbing inflation remains the most urgent priority, as it disproportionately affects low-income groups and the poor. Strengthening market management, increasing supply, and ensuring policy coordination must be undertaken swiftly to prevent further deterioration in living standards.

Creating an investment-friendly environment will require improvements in law and order, political stability, policy continuity, and social harmony. Investors are unlikely to commit if they perceive excessive risk. Restoring confidence in this regard could help boost both domestic and foreign investment.

Bangladesh’s economy is currently valued at around $450 billion, with expectations of reaching $1 trillion by 2035. Achieving this target will require structural adjustments. It is important to recall that the movement of 2024 was largely driven by employment concerns. Economic growth in recent years has often been described as “jobless growth”. Therefore, employment generation must be placed at the centre of economic strategy. The government should undertake projects that create jobs, while both the public and private sectors must work together to expand employment through increased investment.

Governor Ahsan H. Mansur has indicated that Bangladesh Bank will support efforts to reopen closed factories and address challenges faced by private entrepreneurs. Speaking at a meeting with leaders of the Economic Reporters’ Forum on 29 March, he said several factories had already closed before 5 August, with more closures occurring afterwards. Reviving these factories and bringing them back into production has been identified as a priority, with banks encouraged to provide support so that businesses can resume operations, repay loans, and contribute to economic growth. Otherwise, industrial assets will continue to deteriorate, and banks risk failing to recover their funds.

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Employment is a fundamental part of development, and generating jobs requires accelerated industrialisation and expanded economic activity. Foreign investors continue to view Bangladesh as a country of immense potential. Nations such as Japan and South Korea have achieved remarkable economic success by effectively utilising their youthful populations. Bangladesh, too, stands at the threshold of a promising future. Whether this potential is realised will depend on how effectively opportunities are harnessed.

For the sake of the country’s future, job creation must be prioritised. To that end, decisive steps must be taken to inject momentum into the economy.

The writer is a former Member of Parliament