June 4, 2025
The Bangladeshi taka is projected to continue its downward trajectory, driven by ongoing political instability and recent trade challenges, notably the imposition of a 37% tariff on Bangladeshi garment exports by the United States. 
Since January 2022, the taka has depreciated by approximately 39.5% against the US dollar, exacerbating inflationary pressures and straining the economy. The depreciation has led to increased costs for imports, particularly raw materials essential for the country’s vital garment industry, which accounts for over 80% of export earnings.  
The political landscape has further complicated economic recovery efforts. The resignation of long-serving Prime Minister Sheikh Hasina amid widespread protests has ushered in an interim government led by Nobel laureate Muhammad Yunus. While the new administration aims to stabilize the economy, the ongoing unrest has disrupted supply chains and diminished investor confidence. 
In response to the economic challenges, Bangladesh has sought assistance from international partners. The International Monetary Fund (IMF) approved a $4.7 billion support package in January 2023 to help preserve macroeconomic stability. Additionally, the central bank adopted a more flexible exchange rate regime in May 2024 to address the depreciation pressures.  
Despite these measures, concerns remain about the country’s fiscal health. The fiscal deficit rose sharply to 0.7% of GDP in July-November 2024, driven by increased government spending on subsidies and food stockpiling. Meanwhile, revenue collection has lagged, raising questions about debt sustainability and future fiscal flexibility. 
As Bangladesh navigates these complex challenges, the path to economic recovery will depend on restoring political stability, securing international support, and implementing structural reforms to bolster investor confidence and economic resilience.
