Published: 01:01 AM, 22 June 2026
Economic Collapse Looms Without Signs of Quick Revival
This graph illustrated by Center for Policy Dialogue shows alarming indicators with portrayal of drastic rise in socioeconomic perils, attacks on important establishments, deteriorating law and order status and mounting inflation in Bangladesh aggravated by cataclysms and predicaments. -CPD
Bangladesh is facing a complex set of huge economic and institutional stumbling blocks that economic analysts describe as increasingly interlinked, ranging from financial sector instability and rising non-performing loans to allegations of corruption, mob violence, and growing insecurity for journalists and business operators. Economists and civil society actors warn that these pressures, if left unaddressed, could undermine investor confidence and slow long-term growth.
In recent months, reports from various districts have highlighted incidents of mob violence linked to local disputes, political tensions, and allegations of vigilante-style justice. While law enforcement agencies have responded in many cases, critics argue that delayed response times and weak deterrence have contributed to a sense of public insecurity.
Bangladesh Textile Mills Association (BTMA) President Shawkat Aziz Russell has said that he had to shut down some of his factories in recent times coming under adverse economic ground realities. It has to be noted that around 2 million people became jobless during the interim government's time as a result of thousands of factories which were shut down.
Business owners in some urban and semi-urban areas say that intimidation and informal coercion-sometimes involving organized groups-have created additional operational risks. Analysts note that such instability can increase transaction costs, discourage entrepreneurship, and distort local markets.
Bangladesh's financial sector is under increasing scrutiny as concerns grow over governance standards, loan disbursement practices, and regulatory oversight. Financial analysts and media reports have repeatedly pointed to a rise in non-performing loans (NPLs), which many attribute to weak risk assessment, politically influenced lending, and difficulties in loan recovery.
Some banking sector observers allege that connections between business interests and political networks have, in certain cases, contributed to preferential loan treatment or delayed enforcement of repayment obligations. Regulators, however, maintain that reforms are ongoing and that efforts are being made to strengthen compliance and banking discipline.
Despite these assurances, economists caution that high levels of NPLs can constrain liquidity, reduce private sector lending capacity, and ultimately slow down economic expansion.
Small and medium enterprises (SMEs), widely considered the backbone of the Bangladesh economy, are reportedly facing significant challenges in accessing credit. Entrepreneurs frequently cite stringent collateral requirements, bureaucratic delays, and limited institutional support as major barriers.
Business associations argue that while large corporate borrowers often secure financing through established banking channels, smaller enterprises are disproportionately affected by tightening credit conditions. This imbalance, they say, risks stifling job creation and innovation at the grassroots level.
Some SME owners also report informal pressures, including demands for unofficial payments during licensing, procurement, or inspection processes-allegations that authorities have consistently pledged to investigate and curb.
Press freedom advocates have raised concerns over increasing pressure on journalists and media entrepreneurs. Reports of harassment, legal intimidation, interference in court proceedings and frequent physical attacks have contributed to what some describe as a climate of self-censorship in sensitive reporting areas. Deadly mob attacks, which first began during Dr. Muhammad Yunus's reign is still going on dreadfully.
Journalist associations argue that individuals covering corruption, financial irregularities, or local power structures are particularly vulnerable. They stress that ensuring media safety is essential not only for democratic accountability but also for maintaining investor trust and transparency in economic governance.
Government representatives have repeatedly stated that freedom of the press is protected and that incidents involving journalists are investigated when formally reported.
Another emerging concern involves allegations that ordinary citizens and business actors are sometimes informally categorized along political lines, affecting access to services, contracts, or local administrative support. Civil society groups warn that such practices, if widespread, can deepen polarization and undermine institutional neutrality.
Observers argue that politicization of administrative processes can distort market competition and weaken public trust in state institutions. However, officials counter that Bangladesh's administrative system continues to operate within legal frameworks designed to ensure equal treatment.
Economists identify rising non-performing loans as one of the most pressing macroeconomic risks. The accumulation of stressed assets in the banking sector is seen as limiting banks' ability to extend new credit, particularly to productive sectors. Vested oligarchs and evil parasites responsible for intensifying graft and unlawful intervention in bureaucracy and administrative systems often abuse their connivance with Anti-Corruption Commission (ACC) and other regulatory authorities, law and order forces for extracting bribes from honest business owners, journalists and media entrepreneurs.
Latest updates show that Bangladesh-linked deposits in Swiss banks reached 834.16 million Swiss francs (about Tk 12,750 crore). While approximately 98-99% of these funds represent Nostro accounts and cross-border trade transactions held by Bangladeshi commercial banks, the remainder includes private wealth and assets tied to recurring money laundering issues. This is categorical evidence that siphoning off enormous funds from Bangladesh to foreign countries took place rampantly during the interim government's ruling period under Dr. Muhammad Yunus.
While some reforms have been introduced to improve loan classification standards and strengthen recovery mechanisms, analysts suggest that enforcement remains inconsistent. They emphasize the need for stronger corporate governance in banks, improved auditing practices, and enhanced independence of regulatory bodies.
There have also been concerns raised about pressure on judicial processes, including isolated reports of intimidation and disruption of court proceedings in certain areas. Legal professionals argue that any interference with judicial independence-whether through political influence or mob pressure-poses a serious threat to rule of law.
Authorities maintain that the judiciary remains independent and that security measures are in place to protect court operations. Nonetheless, legal analysts emphasize that public confidence in justice systems is crucial for economic stability, particularly in contract enforcement and dispute resolution.
Despite these challenges, Bangladesh remains one of South Asia's fastest-growing economies, with strong performance in the garment sector, remittance inflows and export diversification efforts but these success stories are now under grim threats. Experts caution that sustaining this growth will require addressing governance weaknesses, strengthening financial discipline, and improving institutional accountability.
Policy analysts argue that reforms targeting banking transparency, SME financing access, media protection, and law enforcement effectiveness could help stabilize the economic environment. Without such measures, they warn, the combination of financial stress and institutional fragility could pose significant long-term risks.
As Bangladesh navigates these complexities, the balance between economic ambition and governance reform is likely to remain at the center of national debate.
Former adviser to caretaker government Dr. Hossain Zillur Rahman said that uncompromising steps to fight corruption and to crack down hard on detrimental quarters must be carried out by the present government for pulling out Bangladesh's ailing economy from catastrophes.
Professor Anu Muhammad, Jahangirnagar University said that all governments attach more importance to rhetoric than realistic actions which is why economic doldrums and misgovernance continue to spoil the country's potentialities.
Dr. Iftekharuzzaman, Executive Director of Transparency International Bangladesh (TIB) stated that development and corruption cannot go ahead hand in hand. Without stern endeavours to prevent corruption and abuse of power, all efforts to drive Bangladesh forward will just go down the drain, he further said.
