The biggest challenges that the Bangladesh Nationalist Party (BNP) has to tackle following its recent victory in the general election are the country’s sluggish economy, high inflation and unemployment.
Speaking at a webinar, panellists said voters would judge the new government on its ability to create jobs, tame inflation and steady relations with key partners, even as they commended the peaceful election, according a report by the South China Morning Post.
Zafar Sobhan, editor of Counterpoint, said: “Let us not forget this was a key driver in the movement that ousted [former prime minister] Sheikh Hasina. The incoming government is promising more jobs to young people. A lot depends on what kind of honeymoon period they get, but that won’t last forever,” he said.
The new government would also have to take steps to bolster financial stability, said Sobhan, who was speaking at the seminar organised by the Asia Society Policy Institute on Thursday titled “Bangladesh After the Vote: Democracy, Reform and Foreign Policy Outlook”. He added that Dhaka should focus on stabilising the Bangladeshi currency and lowering the level of non-performing loans.
The BNP won 209 seats out of 300 seats, while the main opposition Jamaat-e-Islami-led alliance secured 77 seats in the election held on February 12, Bangladesh’s first polls since the ousting of Hasina and her government in 2024.
For the financial year ended June 2025, Bangladesh’s economy grew 3.7 per cent, slowing from 4.2 per cent a year earlier and 5.8 per cent in the 2023 financial year, the International Monetary Fund said in a media release last month. In the current and following financial years, the country’s economic growth is expected to rebound to 4.7 per cent, according to the IMF.
In contrast, the economy rose by 6 per cent to 7 per cent annually in previous decades, with growth decelerating in more recent years due to geopolitical challenges, such as the Russia-Ukraine war, and a slowdown in the global economy, according to economists.
Analysts at the webinar said the country’s newly appointed Finance Minister Amir Khusrau Mahmud Chowdhury and Foreign Minister Khalilur Rahman had the relevant expertise and experience to steer the country through challenging economic and political times.
Among them, Shahid Akhter, Bangladesh’s former ambassador to Spain, Thailand and Cambodia, said that the new government had “a good mix of seniors and those from Generation Z”, noting that meritocracy was evident in the ministerial selection process.
Moody’s Ratings said in a report released last week that Bangladesh’s political normalisation had a long way to go after a prolonged period of uncertainty, flagging several concerns on the economic front.
“Although large-scale violence and supply disruptions have largely subsided, localised lapses in law and order and sporadic protests – particularly in the garment sector – continue to weigh on economic activity. Investment has remained subdued as businesses delayed decisions amid political volatility and uncertainty over the policy direction of the incoming government,” it said.
The ratings agency, however, highlighted several positive developments, including steps taken by Bangladesh to strengthen governance in banks and parliament, and progress towards more exchange-rate flexibility. An easing in the country’s political uncertainty could support a recovery in investor confidence, it added.
In a report released on Thursday, Oxford Economics said the BNP would likely maintain a market-oriented economic policy amid significant risks to the implementation process.
One key concern is the elevation of Bangladesh from the least developed country to developing nation status in November, which could result in a 14 per cent decline in export earnings once trade preferences are removed, according to Oxford Economics.
Under its least developed country status, Bangladesh enjoys broad duty-free access in many markets and relaxed World Trade Organization rules, which have helped boost its key garment sector.
Alexandra Hermann, lead economist at Oxford Economics, said the sector could face stiffer competition after an upgrade in Bangladesh’s status. “Importantly, post-graduation, Bangladesh competes more directly on cost and compliance rather than preferential access with the likes of Vietnam and India,” she added.
On the foreign policy front, analysts said at the seminar that they expected Prime Minister Tarique Rahman to take further steps to improve relations with India, Bangladesh’s second-largest trade partner.
Sreeradha Datta, professor of international relations at O.P. Jindal Global University, said there had been no signs of animosity between the two countries following a period of strained relations.
Bilateral ties deteriorated after Hasina fled to India following her downfall and an outbreak of religious violence in both countries in late 2024. Dhaka has urged New Delhi to extradite Hasina. In November, a Bangladeshi tribunal sentenced Hasina to death in absentia for crimes against humanity linked to the crackdown on protesters.
Datta said closer cooperation between the two countries would benefit them and boost regional stability. “There is so much we can do together. Let us converge on the commonalities,” she added.