High inflation, weakness in the banking sector, shortfall in revenue collection, and international trade uncertainty are putting pressure on Bangladesh’s economy. While defaulted loans in the banking sector have decreased somewhat, the real crisis has not gone away; rather, part of the problem has been hidden through rescheduling, restructuring and write-offs, said the Centre for Policy Dialogue (CPD) on Thursday.
The organization's executive director Fahmida Khatun presented this information at a press conference titled “Bangladesh Economy in FY26: Multidimensional Challenges in the Transition Period” organized in the capital.
Fahmida Khatun also said that the country's overall inflation rose to 9.04% in April. The increase in the cost of energy, transportation and services is the main reason for inflation.
On the other hand, the rate of wage growth is lower than inflation, so the real income and purchasing power of the people are decreasing. The biggest pressure is on people with limited and fixed incomes.
According to CPD data, from December last year to May this year, the price of diesel has increased by 15% and the price of petrol, octane and kerosene has increased by about 20%.
This has had an impact on transportation costs, which is contributing to the increase in the price of daily necessities in the market by increasing the cost of transporting goods.
At the same time, the price of cooking gas has also increased significantly. In March, the price of a 12-kg LPG cylinder was Tk1,341, which increased to Tk1,885 in June.
Fahmida Khatun said that the weakness of market management and supply chain is further intensifying inflation. Due to multiple layers of middlemen, the price of goods at the retail level is increasing abnormally and the general consumers are being affected.
A senior research associate of CPD said that there was no need to increase fuel prices in the country for the second time even after the global market price started falling. He suggested a step-by-step price adjustment for more users by protecting fewer electricity users.
The report presented at the press conference said that the total default loan rate of the banking sector was 35.7% in September 2025, which decreased to 32.26% in March 2026. However, this reduction cannot be seen as a real improvement.
Fahmida Khatun said that a part of the real financial condition of the banks has been hidden through loan rescheduling, restructuring and write-off. As a result, there is a significant difference between the published information and the real situation.
According to CPD data, asset quality reviews have been initiated for 17 banks. Of these, the review of six banks found much higher default loan information than the published accounts.
This indicates a major discrepancy between the published information and the actual financial condition of the banks.
The report recommends implementing strict loan classification and provisioning policies, gradually withdrawing regulatory relaxations, limiting the scope for rescheduling, and disclosing information on actual defaulted loans, including rescheduling and restructured loans.
It also called for strengthening the independence and supervisory capacity of Bangladesh Bank.
Revenue targets difficult to achieve
The CPD's observations show that the revenue collection target for the current fiscal year has been set much higher than reality. Revenue collection increased by only 6.9% during July-March.
To achieve the target, 84.6% growth is required in the last quarter, which is very difficult to achieve in reality.
The organization said that the revenue deficit of the National Board of Revenue (NBR) stood at Tk145,330 crore during July-April. At the same time, there is uncertainty about meeting the revenue-related conditions of the International Monetary Fund (IMF).
Prof Mostafizur Rahman, distinguished fellow at the CPD, said that imposing an additional 10% percent tariff on allegations of forced labour will not solve the problem; rather, the situation may become more complicated.
He said that Bangladesh's existing tariff agreement with the United States needs to be reconsidered in the new situation. Currently, the average tariff on Bangladeshi products is 15%, with an additional 19%, bringing the total tariff to 34%. If another 10% tariff is imposed, the total tariff rate will reach 44%, which may negatively impact Bangladesh's competitiveness.
Rahman said that in many cases, decisions are made without considering the reality of developing countries. Cooperation and assistance are needed to solve problems like child labour and forced labour, not punitive tariffs.
