The art of cherry-picking growth
The continued fall in business borrowing reflects more than just weak lending – it points to a worsening business climate that threatens job creation and, ultimately, the country’s growth momentum
Economic news that hogged the headlines last week paints a troubling picture for Bangladesh, yet the narrative pushed by official platforms seems carefully curated to highlight only the bright spots.
Private sector credit growth, a key indicator of economic dynamism, fell to a historical low of 6.29% in September, underscoring the persistent stagnation in investment and business confidence. Even the General Economics Division (GED) of the Planning Commission could not look away – its latest Monthly Economic Update & Outlook report for October 2025 flagged August's 6.35% growth "a historic low".
The continued fall in business borrowing reflects more than just weak lending – it points to a worsening business climate that threatens job creation and, ultimately, the country's growth momentum.
Next, exports reveal another layer of concern. Its growth fell for the third consecutive month in October, contracting 7.43% year-on-year. Exporters fear that political uncertainty, higher US tariffs, and ongoing banking sector troubles could push trade further into a downward spiral.
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And the other pulse of the economy – remittances – beats unevenly.
In October 2025, expatriates sent home $2.56 billion, up 7% from a year ago. Yet each passing month shows a slowing trend, with inflows down 4.54% from September and the post-July 2024 uprising growth momentum steadily fading.
Meanwhile, overseas employment took a sharp hit in October, dropping 25.6% to just 78,027, down from 1.05 lakh in the same month last year. Even compared to September's 95,694 departures, the decline of 18.5% signals more than a monthly fluctuation – it reflects a faltering migrant labour market that threatens remittance flows and exposes households to growing economic uncertainty.
The sticky inflation in Bangladesh remained the highest in South Asia, even as it began to ease to 8.17% in October. For low-paid workers, wage growth has been lagging behind inflation for nearly four years, steadily eroding real income.
Even food security, the most basic measure of human welfare, remains fragile. Only 32.9% of Bangladesh's population is fully food secure in terms of daily intake, leaving millions exposed to nutritional vulnerability, according to the Bangladesh Bureau of Statistics.
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Against this backdrop of stagnation and slowdowns, the official narrative appears strikingly selective.
In a Facebook post, Chowdhury Ashik Mahmud Bin Harun, executive chairman of the Bangladesh Investment Development Authority (Bida), celebrated a 19.13% rise in foreign direct investment (FDI) following the July 2024 mass uprising, setting the country apart from global post-uprising trends where foreign investment typically declines.
The stark contrast between the widespread economic distress and the few highlighted successes raises a question: are these figures a reflection of genuine improvement, or merely the art of cherry-picking growth?
A closer look reveals that the net FDI growth in the last fiscal year was not because of fresh external injection but a sharp rise in reinvested earnings and intra-company loans by existing players.
The inflow of equity capital declined by 17% year-on-year in FY25 when reinvested earnings surged by 23.3% and intra-company loans by 180.7%, according to Bangladesh Bank data.
This selective optimism masks systemic weaknesses. Declining credit growth suggests muted investment appetite, faltering exports point to competitiveness challenges, and fluctuating remittances reveal vulnerability in household incomes. Celebrating FDI alone risks creating an illusion of progress, while the larger economy continues to struggle with structural fragilities.
Crucially, before any meaningful solutions or policies can be pursued, the first step must be acknowledging the depth of the problem. Economic stagnation, weak investment, faltering employment, and fragile governance cannot be addressed if they are downplayed or ignored. Recognising these realities is essential to build public trust.
What's the way out? Election as short-term fix
From businessmen to policymakers, there is one clear expectation: the upcoming national election is the most immediate way to stabilise Bangladesh's economy and law and order. Confidence is faltering, investment is stalled, and governance remains fragile. Without political clarity, economic slowdown and uncertainty will deepen.
With the interim government heading towards national elections in mid-February 2026, political activity is intensifying as parties have started to announce their candidates. Beyond routine politics, the vote now represents the most immediate avenue to restore business confidence and stabilise an economy already under strain.
Business leaders and investors are watching closely. Many warn that any delay in forming an elected government risks further eroding confidence, deepening the slowdown in investment and job creation. Apparel exporters, already grappling with global uncertainty, higher US tariffs, domestic banking troubles, and port and customs troubles, see political stability as the most plausible path to regaining momentum.
Meanwhile, persistent structural challenges – from the ongoing gas crisis to infrastructure bottlenecks – continue to weigh heavily on the private sector, leaving investment and employment prospects stagnant.
Law and order, a prerequisite for economic revival, is equally fragile. Bangladesh still ranks 125th out of 143 countries on the global rule of law index, among the bottom 20 worldwide. The Bangladesh Army has also emphasised that a free and fair national election will bring back stability and normal law and order.
For now, the next February vote is not merely procedural – it is the crucial lever to stabilise the faltering economy, anchor investor confidence, and create the conditions necessary for broader structural reforms.
