BowerGroupAsia wrote an update to clients on Bangladesh’s political and economic developments in February 2025.

Context

  • The past month has seen several exciting developments in Bangladesh. On the economic side, modest progress was visible with inflation ebbing, exports picking up and remittances showing consistent signs of growth, which helped manage the shortage of foreign exchange. However, the political domain has continued to churn quite loudly. 
  • February was capped by the launching of a new political party by the leaders of the last year’s mass movement, which led to the ouster of the oppressive regime of former Prime Minister Sheikh Hasina. Overall, it was a quite loud period in politics, but a little muted on the economy.   

Significance

  • Against the backdrop of a contained depression in the economy during the last five months, there are some indications that the economy is slowly turning around. Key indicators, such as exports and imports and remittances, are all showing signs of improvement. Governor of Bangladesh Bank Ahsan Mansur expressed hope that by the end of this financial year inflation would come down to 7 or 8 percent, if not more. Meanwhile, Bangladesh Bank has indicated that the economy may grow at around 4 to 5 percent in FY 2025, but it is expected to bounce back to 6 percent or above the following year.  
  • The BNP, the largest party, held an extended meeting on February 27 with all its local leaders after a gap of seven years. The party is considered to be the likely party to form the next government by winning the most seats in the next parliamentary election, and in that context this mobilization is seen as a show of strength. It was also designed to give notice to the interim government about the party’s demand for an early election.

Implications

  • When presenting the monetary policy of Bangladesh for the period of January to June, Bangladesh Bank governor observed that he did not see much prospect for investment growing in 2025. According to experts, price hikes, high inflation, spiking crime rates, sluggish revenue growth and the imposition of a value added tax on certain consumer goods do create an environment favorable environment for attracting investment, both domestic and foreign. The business community has consistently raised the issue of the slipping law and order situation, which makes the business climate difficult.
  • Political observers anticipate a tough time ahead for BNP if it wants to transform itself into a ruling party in the transformed political context. There is growing public demand and expectation for a more creative, empathetic, delicate and inclusive approach from the political parties beyond the traditional political practices. The demand for early election from BNP is seen as a clever move and as reluctance about the ongoing reform initiatives and about its readiness to embrace reforms in its own party structure.

We will continue to keep you updated on developments in Bangladesh as they occur. If you have any questions or comments, please contact BGA Head of Research Murray Hiebert at mhiebert@bowergroupasia.com.

Best regards,

BGA Bangladesh Team

A small ginko leaf

Head of Research

Murray is a top Asia expert and skilled researcher with three decades of experience living and working in Asia. His networks in business, media and government circles are deep and wide-ranging. He is also a senior associate of the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Earlier he served as deputy director of the program for six years. Prior to joining CSIS, Murray served for five years as senior director for Southeast Asia at the U.S. Chamber of Commerce where he worked with leading American companies, the U.S. government and Southeast Asian ... Read More