Bangladesh’s business climate showed only a slight sign of recovery in 2025, with the Bangladesh Business Climate Index (BBX) rising to 59.69 from 58.75 a year earlier, indicating minor stabilization in the wider economic environment but emphasizing overall business conditions remain fragile.
These were obtained from the BBX 2024-25 report, launched by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB) on Thursday.
The report's analysis revealed that Barisal topped the list in 2024-25 with 62.8, while Barisal was at the bottom with a score of 54.73 in 2023-24.
However, a score below 61-80 reflects an improving environment. A score below 60 suggests significant challenges and a lack of reform.
The report noted that the marginal improvement in Bangladesh’s business climate was largely driven by incremental policy measures and firm-level adjustments.
It cautioned that the slow pace of broader economic reforms has failed to restore business confidence to desired levels. Persistent structural barriers and regional disparities, including limited access to finance, bureaucratic delays in land registration and ownership transfer, informal payments, and rising utility costs, continue to constrain private sector growth.
At the same time, businesses are grappling with mounting macroeconomic challenges such as stubborn inflation, electoral uncertainty, high borrowing costs, and increasing global policy risks.
By further explaining, the report said: “Performance in the latest year in six out of eleven pillars exhibits deterioration, underscoring persistent structural weaknesses in Bangladesh’s business environment.”
Although the slight increase in the overall BBX score points to some improvement, the progress remains uneven, with critical areas such as technology adoption, trade facilitation, and regulatory transparency lagging behind.
The macro-financial and political context of 2024–25 has heavily influenced these outcomes. National elections and subsequent political unrest, labor strikes, and industrial disruptions, particularly in apparel and pharmaceuticals, led to up to 10% business losses in some sectors. High inflation and elevated bank interest rates (up to 14% for long-term credit) further constrained investment and domestic demand.
The initiative was supported by the Department of Foreign Affairs and Trade (DFAT) of the Australian Government.
The launch event took place at the MCCI Gulshan office, bringing together senior policymakers, business leaders, private sector leaders, industry-business experts, and development partners.
Commerce Adviser Sk Bashir Uddin attended as chief guest, while Ben Carson, Australian Trade and Investment Commissioner at the Australian Trade and Investment Commission (Austrade), Bangladesh, joined as guest of honor.
Kamran T Rahman, president of the MCCI, inaugurated the event with his welcome remarks.
M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, delivered the keynote presentation.
Distinguished panelists included Anwar-ul Alam Chowdhury, president of the Bangladesh Chamber of Industries (BCI); Kazuiki Kataoka, country representative of the Japan External Trade Organization (Jetro); and Rupali Chowdhury, managing director of Berger Paints Bangladesh Limited.
BBX 2024-25 is the fourth iteration of Bangladesh’s first homegrown index that gauges the country’s business climate. It uses 11 pillars and was introduced in 2021.
In 2021-22, the Bangladesh Business Climate Index Results were 61.01, and in 2022-23, the score was 61.95.
Key Highlights—BBX 2025
The report highlights several key concerns.
Among them, six points were:
- Sectoral disparities influence business competitiveness. Industries such as construction, textiles, and agriculture face higher operational constraints due to infrastructure, labor, and regulatory challenges, whereas technology-intensive sectors like electronics, pharmaceuticals, and leather demonstrate faster adoption of reforms and technology, enhancing their relative competitiveness.
- Stronger institutional linkages and compliance requirements benefit regulated industries and large firms, while smaller enterprises and certain service-oriented sectors remain disadvantaged by inconsistent access and limited reform outreach.
- Informal practices remain a structural constraint. Despite reform efforts, informal payments for land, utilities, and tax processing persist across multiple sectors, raising costs, creating inequities, and weakening overall investor confidence.
- Policy implementation gaps limit reform impact. Although multiple reforms exist across taxation, trade, labor, and environmental regulations, inconsistent implementation, poor monitoring, and limited outreach reduce effectiveness and limit business confidence in the regulatory system.
- Primary growth centers stagnating with regard to facilitative capacity for businesses. The primary growth centers, Dhaka and Chattogram, are both divisions in the second lowest tier of the business environment. Neither of these divisions appears as the top divisional performer in any of the 11 pillar areas. This clearly points to the need for strengthening new/secondary growth centers as well as decongesting the overreliance of economic activities on Dhaka and Chattogram. Both Dhaka and Chittagong cities have also seen frequent and major disruptions to economic activities and supply chain operations due to frequent protests, processions, and sit-ins in the past 12 months, diminishing the ease of doing business in these important geographies. About 16% of respondents reported substantial difficulty in accessing utilities in Dhaka, which is high compared to other divisions.
- Last mile service delivery improves as interference/prevalence of politically affiliated intermediaries disappears. The results report improvement of services at regulatory delivery points with regard to several pillar areas, such as access to land, access to technology, etc. While no notable reforms have been initiated in such areas, one positive development that has perhaps improved the experience in the said areas is the absence, since the political changes in August 2024, of the predatory behavior of politically linked intermediaries who earlier created a complex environment with the objective of inducing reliance on intermediaries.
Regional disparities
The BBX 2024–25 also highlights regional variations in the business climate. Divisions such as Barisal, Sylhet, and Mymensingh recorded relatively higher scores, reflecting stronger business conditions, whereas Rangpur, Dhaka, and Rajshahi show more constrained environments.
The report's analysis revealed that Barisal topped the list with a score of 62.8, while Rangpur was at the bottom with a score of 56.9. Earlier in FY24, in the last year, Rajshahi topped the list with a score of 61.48, while Barisal was at the bottom with a score of 54.73.
Among others, Sylhet (61.5), Mymensingh (61.3), Chittagong (60.1), Rajshahi (59.5), Dhaka (59), and Khulna (58.8) score, respectively, in FY25.
The latest report further explains that, despite reforms, regional disparities persist. Companies in Barisal and Khulna encounter fewer challenges due to lower average trade license costs (Tk9,250–10,254) and minimal visits to government agencies, with over 40% of respondents requiring visits to fewer than three agencies. In contrast, Dhaka, Sylhet, Mymensingh, and Chattogram face higher trade license costs (Tk12,000–19,217) and more complex procedures, often requiring visits to three or more agencies, contributing to slower business registration and lower divisional BBX scores.
Incorporation costs also vary significantly: Barisal averages Tk45,000, while Mymensingh reaches Tk65,000, reflecting administrative and regulatory differences across divisions. The digitalization of records is expected to ease entrepreneurs’ burden, improve formalization of businesses, and foster a more professional corporate environment. Nevertheless, addressing divisional disparities in costs, procedural complexity, and regulatory burden remains critical for improving the ease of doing business uniformly across the country.
The repost also stated that division-wise results highlight distinct groupings. Regions such as Mymensingh and Rajshahi performed strongly, with nearly all respondents having online access to local government regulations (100% in Mymensingh; 99% in Rajshahi) and full accessibility to government rules and regulations in Rajshahi (100%). These outcomes suggest a stronger institutional presence and better communication channels in these divisions. Khulna and Barisal also improved overall scores, though Khulna revealed weaknesses in business awareness, with only 73.1% aware of registrations and renewals, the lowest among divisions.
In contrast, Rangpur and Sylhet form the lowest-performing group. Rangpur had just 60.9% online access to government rules and only 49.3% access to local regulations, the lowest across all divisions. Sylhet also struggled with local-level access (68.8%), although it recorded the highest awareness of registrations and renewals for setting up or operating a business (96.9%).
Dhaka and Chattogram, despite being economic hubs, saw declining scores. Dhaka reported the most frequent regulatory changes, suggesting that rapid policy adjustments without adequate communication may have undermined perceptions of stability.
On the other hand, no respondents from Chattogram reported any structural or regulatory efforts made towards improving regulatory information available, suggesting a continued lack of institutional responsiveness that may hinder business confidence and regulatory compliance in the region. These regional differences indicate that stronger administrative coordination improves outcomes, while regulatory inconsistency or weak dissemination mechanisms contribute to lower performance.
