Investment slumps to record low as ADP spending hits decade-worst pace: CPD

Private investment in the country has fallen to a historic low and public development spending is running at its weakest pace in a decade, the Centre for Policy Dialogue (CPD) warned on Saturday, flagging mounting risks to jobs, growth and the country’s fragile economic recovery.
The concerns were outlined at CPD’s independent review of the economy for the first half of the 2025-26 fiscal year, presented at a programme in Dhaka.
CPD Executive Director Fahmida Khatun said the collapse in investment had emerged as the economy’s most urgent challenge, with direct consequences for employment generation and overall momentum. 
“Private investment has reached a historic low. Foreign direct investment is also at its lowest level in recent times,” she said, adding that slow implementation of the Annual Development Programme (ADP) was compounding the problem.
According to the think tank, ADP execution in the current fiscal year is the slowest in 10 years, reflecting delays in project implementation, weaknesses in public expenditure management and mounting fiscal pressure.
While food inflation has eased slightly in recent months, CPD said non-food inflation remains at an “intolerable” level, continuing to squeeze household purchasing power. Fahmida Khatun noted that inflation has become structural in nature and cannot be tackled through interest rate hikes alone.
“Global prices of rice and wheat have declined, but domestic prices have not followed the same trend,” she said, pointing to persistent weaknesses in food supply management and storage systems. CPD questioned why food prices remain elevated despite adequate domestic production. It noted that Bangladesh produces more rice than its estimated annual demand, yet market prices have failed to ease. Profit margins are particularly high for perishable items such as potatoes, onions, green chillies, vegetables, fish and meat, where middlemen exercise stronger control over supply chains, the organisation said.
On the fiscal front, CPD reported that revenue collection grew by 16.7% in the first six months of the current fiscal year, driven mainly by income tax and VAT. 
Even so, it warned that meeting the revised full-year target would be difficult.  An additional growth of around 3% would be required in the remaining months, which CPD described as challenging under current economic conditions.
Fahmida Khatun stressed the need to broaden the tax base, rationalise tax exemptions and curb illicit financial flows to strengthen revenue mobilisation. 
She also cautioned against excessive borrowing from the banking system and called for closer scrutiny of project costs to maintain fiscal discipline.
Turning to the banking sector, CPD urged the next elected government to carry forward reforms initiated by the interim administration. 
Fahmida Khatun said the reform process must not stall after the election and should include mergers where necessary, the closure of non-viable institutions and stronger regulatory oversight. 
Restoring depositor confidence, she added, would require clear political commitment and greater independence for the central bank.