While the interim government was able to ease inflation following its takeover last year, underlying institutional weaknesses, such as low revenue collection, continue to pose challenges for the economy, said the Centre for Policy Dialogue (CPD) on Sunday.
The interim government has been able to avert a major economic disaster after taking charge of it, but it also believed that recommendations made by the task force formed to redefine economic strategies and mobilize necessary resources for inclusive and sustainable development were not being implemented.
The think tank made these remarks during a dialogue titled “365 Days of the Interim Government Economy in Retrospect,” organized by CPD on Sunday to mark the first anniversary of the interim government.
CPD Executive Director Fahmida Khatun said that inflation may have eased, but many persistent challenges remain. The recent decline in inflation is a positive sign, but it does not fully reflect improvements in the broader economic structure.
“A major economic disaster was averted following the takeover of the interim government, but poor and low-income groups continued to suffer amid high inflation,” she added.
However, general inflation on a point-to-point basis in the first month of the FY26 was 8.55%, compared to 8.48% in June.
“Citizens had high expectations regarding the restoration of democratic processes, the reform of state institutions, and the stabilization of the economy, as the interim government had inherited a fragile economy suffering from slow growth. The economy is stabilizing gradually, and risks are receding. This is one of the biggest achievements,” she noted.
Khatun also said: “Although the government has formed a task force to define the white paper and economic strategy, we do not see the implementation of their recommendations.”
After the fall of the Awami League, the interim government formed the task force on the economy September 10 last year, which submitted its report on January 30 earlier this year.
The recommendations include bringing stability to the national economy, creating a clear vision for implementing the 2025-26 budget; adopting a medium-term plan for 2025-2027 and conducting a proper evaluation of the Eighth Five-Year Plan.
They also include identifying fragile and vulnerable sectors to initiate the reform process on a priority basis; adopting strong policies to transform from least developed countries to more developed countries; taking initiatives to achieve the SDG targets; and creating a forum for dialogue with development partners.
CPD said that some impact of the white paper's recommendations can be seen in the banking sector, foreign sector and inflation.
However, Fahmida highlighted the negative trend in GDP growth, private sector credit flow, revenue collection, and ADP implementation.
Regarding Bangladesh’s foreign debt repayment, Bangladesh Bank Governor Ahsan H Mansur said: “We have never kept arrears and never will. At one point, $2.5 billion in arrears had accumulated, but we committed to clearing them as soon as possible.”
“We adopted a policy of not selling even a single dollar, and since 14 August last year, we have not sold one” he added.
The governor detailed reforms underway in the banking sector, including amendments to the Bank Company Act 1991 to limit board directorships to six years instead of 24, the appointment of at least six independent directors from an approved panel, and fundamental changes to the Money Laundering Act with asset recovery provisions.
However, Mansur also noted that stability has so far come only in the financial sector, not the political one.
In the keynote presentation, the independent think tank used a scorecard with green, yellow, and red indicators against 38 issues.
In terms of progress in addressing the concerns, it identified nine issues as green and 11 as red.
Lack of reforms
The red issues, which indicate lack of progress towards any reforms include:
- Reforming the bond market, as many non-existent companies have used it to illegally obtain large sums of money
- Create freelancing hubs and provide support to boost employment and foreign currency earnings in the IT sector
- Remove price fixing to promote a free-market economy and eliminate unnecessary business incentives
- Align madrasa education with mainstream education to equip students with skills for employment
- Merge the two education ministries to reduce bureaucratic complexities
- Make universities autonomous from the Education Ministry and UGC control
- Expose corruption in healthcare projects and eliminate political influence from the health sector to ensure equitable access for all
- Ensure patients are not compelled to seek treatment at private hospitals through referrals from government hospitals, and improve the quality of services in private hospitals
- Introduce universal health insurance to reduce personal medical expenses
Abolish industrial police, which benefits neither industry owners nor labour
