A year after the removal of Sheikh Hasina from power in Bangladesh and her subsequent flight to India, the country is still navigating its path toward political stability. Elections have yet to be held, and governance is currently overseen by Dr. Muhammad Yunus—the renowned economist and pioneer of the “Grameen Bank” microfinance model—alongside a cabinet of technocrats and several youth leaders who spearheaded the uprising that toppled Sheikh Hasina.
Over the past year, economic activity and public life in Bangladesh have largely normalized. A number of reforms were introduced, targeting officials in financial and economic institutions closely tied to Hasina’s party.
Bangladesh, a densely populated and impoverished country, continues to struggle with severe socio-economic challenges, particularly poverty, unemployment, and corruption. These long-standing issues drove students to lead the August 2024 uprising against Hasina’s rule.
Observers expect Bangladesh to experience a trajectory distinct from that of the Arab Spring revolutions, which were undermined and left behind deep social and economic crises. In contrast, Bangladesh is anticipated to undergo a relatively smooth transfer of power under Dr. Yunus’s interim administration, avoiding the failed experiments of political parties that have plagued the country since the 1970s.
Parliamentary elections are expected in the first half of 2026, which means the economic sector remains in a state of cautious anticipation until then. The hope is that the elections will mark the beginning of sound economic policies and genuine development strategies.
Economic Indicators
Bangladesh’s GDP rose from $347.4 billion in 2023 to $450.1 billion in 2024. Growth rates were 5.8% and 4.2% in those years respectively, while the Asian Development Bank (ADB) projects 3.9% growth in 2025. The ADB attributes the slowdown to weak domestic demand, natural disasters, high inflation, and industrial disruptions caused by political unrest. However, it forecasts a rebound to 5.1% growth in 2026, in line with the relative political calm and regional and international support for the current leadership.
Remittances from migrant workers amounted to $30.3 billion in the first ten months of the 2024/2025 fiscal year, according to Bangladesh Bank’s June 2025 economic trends report. Notably, remittances surged following Hasina’s ouster—reaching a record $3.2 billion in March 2025 alone. This figure surpasses the total for all of 2023/2024 ($23.9 billion).
Foreign exchange reserves reached $26.7 billion in June 2025, up from $21.7 billion a year earlier, marking a 22% increase. Meanwhile, exports in 2024/2025 grew by $3.8 billion year-on-year, and imports rose by $2.6 billion.
Foreign direct investment (FDI) also showed resilience, with its strongest performance between January and March 2025 ($864.6 million), compared with $490.4 million in late 2024 and only $104.3 million during July–September 2024, when political turmoil disrupted inflows.
Inflation has remained high but relatively stable: 9.95% in August 2024, peaking slightly at 10.05% in October, and standing at 10.03% by June 2025.
Economic Challenges
The IMF’s June 2025 report highlighted both opportunities and risks. It projects a 7% increase in Bangladesh’s key garment exports in the second half of 2025. However, these exports face steep obstacles due to U.S. President Donald Trump’s 37% tariff on Bangladeshi imports. Unless Dhaka and Washington reach an agreement to reduce tariffs back to 10%, the country risks a sharp decline in export revenues.
Another concern is the exchange rate. The IMF has urged Bangladesh to adopt a more flexible currency regime to avoid depleting foreign reserves. By June 2025, the taka had depreciated only slightly—from 120 per dollar in September 2024 to 122.8—despite political upheaval.
Future Outlook
Bangladesh’s future depends on sound governance and strategic reforms. One major challenge is managing natural disasters—particularly floods and droughts—which require investments in dams and infrastructure to mitigate damage and expand electricity production. Reaching binding agreements with India on water management remains a critical obstacle.
Another pressing issue is the fair distribution of wealth, employment generation, and eradicating corruption, begging, and homelessness. Indeed, perceptions of unfair hiring in government jobs were a key spark for the youth-led uprising. Establishing transparent and merit-based recruitment is essential.
Additionally, a national strategy is needed to harness remittances, one of Bangladesh’s main sources of foreign currency. Policies should channel these funds into micro-projects for workers’ families, as well as larger ventures supported by joint-stock companies promoted by the government.
Although these reforms will take decades, what matters most is that citizens see genuine intent and determination to reform—so as to prevent another popular revolt.
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