How Far Has the Economy Progressed in Six Months?

By ASM Niaz Morshed

An economy cannot be transformed overnight. When a government inherits irregularities, weak financial institutions, high inflation, debt burdens, declining foreign exchange reserves and stagnant investment, its success should be judged by how quickly it identifies the problems, restores stability and builds a foundation for future growth.

The BNP-led alliance came to power after the February 12, 2026 election. After nearly two decades, the BNP’s return to power marked a major political change and brought a difficult economic responsibility. The party won a large majority, creating expectations of political and economic stability.

Reserves: A Visible Improvement

One of the most visible economic indicators is the recovery of foreign exchange reserves. According to Bangladesh Bank data, reserves stood at around $26.74 billion in June 2025 under the BPM6 method. At the fall of the previous government, the figure was $20.48 billion. By July 2026, reserves had risen to around $31.60 billion.

The increase in remittances, foreign currency inflows and improvement in the balance of external transactions contributed to this recovery. Bangladesh Bank’s recent policy review shows that during July-April of FY2025-26, the central bank purchased around $5.7 billion from the foreign exchange market. This indicates signs of stability in one of the economy’s major weaknesses—the dollar shortage.

Remittance: A Strong Flow

Remittance is one of the main drivers of Bangladesh’s economy. Between February and July 2026, Bangladesh received around $18.28 billion in remittances, according to Bangladesh Bank.

This is a positive signal and reflects confidence among expatriate Bangladeshis. However, the increase should not be viewed solely as the success of one government. It is more reasonable to see it as the result of improved channels for sending money through legal routes, greater stability in the foreign exchange market and increased confidence among expatriates.

Inflation: The Pace Has Slowed, But the Problem Remains

For ordinary people, market prices are the most important economic indicator. Before the fall of the previous government, inflation stood at 11.66 percent in July 2024. It was 9.42 percent in May 2026 and fell to 9.16 percent in June, according to the Bangladesh Bureau of Statistics.

The decline is not dramatic, but it is significant. Despite external economic pressures, inflation has slowed after remaining high for a long period. The biggest economic challenge ahead is to reduce inflation further while increasing production and employment.

Banking Sector: The Toughest Inheritance

The banking sector remains one of the biggest structural problems in Bangladesh’s economy. Long-standing irregularities, weak loan management and rising default loans have placed enormous pressure on the banking system. According to Bangladesh Bank data, total classified loans stood at Tk 5,88,704 crore at the end of March 2026.

The challenge is not only economic but also institutional. A weak banking system discourages investment, limits access to credit and reduces employment opportunities. Banking-sector reform, recovery of defaulted loans, restructuring of weak banks and restoring depositors’ confidence must therefore remain central to economic recovery.

The real test will be whether the government can establish strong regulatory mechanisms to prevent future irregularities and financial mismanagement.

Exports: An Area of Hope

Exports remain one of Bangladesh’s major sources of foreign income, with the ready-made garment sector accounting for a large share.

Maintaining a positive export trend is important for the economy. Strong exports and remittances reduce pressure on the foreign exchange market, increase import capacity and support reserve rebuilding. However, Bangladesh must diversify beyond garments. Pharmaceuticals, leather, agricultural products, IT and services should receive greater attention to create a more diversified export base.

Investment and Employment: The Real Test

Economic recovery will be meaningful only when it reaches people through higher employment and income.

The new government has prioritised investment, job creation and a business-friendly environment. Initiatives such as one-stop services, digital approvals and simplified licensing could reduce the time and cost of doing business. But policies alone will not attract investment. Investors need political stability, rule of law, efficient administration, reliable electricity and energy, a simple tax system and a corruption-free environment.

Therefore, future success should not be judged by the number of plans announced, but by how much new investment actually arrives and how many jobs are created.

Budget: A Roadmap for Recovery

The 2026-27 budget focuses on economic recovery, stability, financial-sector reform, social protection and building a productive economy.

The government faces a difficult balance between controlling inflation and maintaining growth. Excessive spending can increase inflation, while excessive austerity can reduce investment and employment. Maintaining the right balance between stability and growth will therefore be crucial.

From Darkness Towards Recovery

If the BNP government’s first six months are assessed as the beginning of a broader economic recovery, several indicators are clearly positive. Remittances have strengthened, foreign exchange reserves have increased, inflation has declined somewhat and the external sector shows signs of greater stability. At the same time, major structural challenges remain, particularly in the banking sector, default loans, investment and employment.

Rebuilding a fragile economy is a marathon, not a 100-metre race. The damage caused by corruption, debt, default loans, weak institutions, inflation and stagnant investment cannot be erased through one budget or within one year. The first requirement for changing the economic direction is restoring confidence. Strong remittance flows, higher reserves and the recent decline in inflation provide early signs of that confidence.

The government’s real task now is to turn these positive indicators into sustainable economic growth.

The writer: Assistant General Manager, Rupali Bank PLC, Divisional Office, Mymensingh.