New Year’s economy in uncertainty and opportunity.

High prices of daily essentials have crushed the common people throughout the year 2024 that has just passed. For various reasons, business and commerce and the economy were affected. There was political instability centered around the national elections at the beginning of the year. At the middle of the year, the government fell before a mass uprising.

Different types of instability arising out of this affected every industry and commerce. Moreover, foreign transactions were imbalanced, and the financial sector was fragile during the whole year. Instability made investors go through bad times. It was such a bad situation that the journey to 2025 began. And 2025 is going to be a year of uncertainty also, experts believe. But the good winds can bring prosperity in the economy, provided uncertainty can be overcome in the new year. In this case, it would have to meet two major challenges. In normal conditions, low-income people, who are pressed for high inflation, can create chaos on any issue that leads to the country’s turbulent political situations. Therefore, keeping up economic and political stability in consideration, effective initiatives will have to be taken against inflation.

Dr. Zahid Hossain, the former chief economist of the World Bank’s Dhaka office and a member of the white paper drafting committee formed by the interim government, told our time that 2025 is a year of uncertainty. Many challenges must be faced by the interim government. One major challenge is restoring political stability next year. Above all, restoring normal momentum in the economy. For that, rule of law and order has to be normalized. Saying that instability is being created in the administration, he said that if law and order is not restored, the economy will not recover.

This economist believes food inflation is a big concern for the economy. He said that inflation must be reduced, otherwise law and order will not return. Because the present market situation is such that at every provocation, the low-income people take to the streets and create chaos. The central bank has undertaken a contractionary monetary policy to keep the spiral of inflation under control. Not only policy support but market management must be worked upon. The exchange rate has to be kept steady. Now there are big players in this market. Action must be performed after seeing their behavior, stop extortion. Inflation is related to political instability. It needs to be controlled for political reasons rather than economic ones.

Dr. Zahid Hossain opined that the government has undertaken several initiatives in the banking sector. But all those are temporary. Some steps need to be taken in the long term. Some laws need to be changed. Interim government will provide a budget. We need to keep an eye on that in the next budget so that there is no new pressure on inflation. He said the budget deficit must be reduced for the sake of inflation control and growth. We must stand by the people in poverty. The allocation for the social safety net must be increased. Revenue must be increased. Wasteful spending must be reduced.

He added, the changes that had happened through the mass uprising are not painless, have increased the pain of the economy. Despite all these, some glimmer of hope is visible from the end of the year: discussions on reforms began and some initiatives were made; the result of it could be seen in due course.

Professor Abu Ahmed, the Chairman of the Investment Corporation of Bangladesh (ICB), an economist, expressed optimism in the country’s economy in the new year. He told our time, “All kinds of garbage have gone in 2024. I hope that the economy will have a good wind next year. Remittances will need a breeze. Reserves will also increase. However, interest rates will have to be reduced. Although interest rates were increased to reduce inflation, it did not work. Investment has been hit due to the increase in interest rates. If interest rates are reduced, on the one hand, investment will increase, and on the other hand, the stock market will recover. The stock market has also been damaged due to high interest rates. He hopes that political stability will return next year. Parties will prepare for the national elections. The business environment will be smooth.

Businessmen believe that though 2025 will be challenging, apprehensions are there. As per businessmen, peace will start returning to the political arena after the instability in the first half of the year. Along with this, the law and order situation will also improve due to which momentum will come in the economy of the country. But in the new year, many challenges will have to be faced.

BKMEA President Mohammad Hatem told our time that 2024 was a year of many adversities. Businessmen want to turn around in 2025. That opportunity must be given. Regarding the challenges, he said, to maintain production, the gas and electricity crisis must be overcome. The problems of the banking sector must be solved. The law and order situation must be improved. It has to stop the sudden worker unrest through provocation.

As regards the exports, the BKMEA President said, there is an opportunity ahead awaiting us. If the obstacles and challenges are given proper importance, we hope that the export will cross more than $50 billion in 2025. If high tariffs are imposed on Chinese and Mexican products by the administration of newly elected US President Donald Trump, that will create an opportunity to increase the export of our products and attract foreign investment. To utilize that, we must also prepare. For that, we need to ensure ease of doing business, modernization of ports, and easy investment processes. Initiatives must be taken through bilateral agreements in order to increase the exports to LDCs which are lagging behind their graduation.

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