As Bangladesh prepares for a post-election transi-tion, economists and business leaders have underscored that eradicating corruption must be the top priority of the next government to restore macroeconomic stability, revive investment confi-dence and protect livelihoods in an increasingly fragile economy.
Dr Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD), said the incoming administration will inherit an economy under significant strain, marked by per sistent inflation, weak income growth, rising non-performing loans and chronic revenue shortfalls. "The next government will not be starting on a
clean slate.
It will face a fragile macroeconomic sit uation that requires urgent and decisive action," Fahmida told The Daily Industry in an interview. Inflation, Income Erosion and Banking Stress: Dr Fahmida, who earned her PhD from University College London and completed post-doctoral research at Columbia University, said inflation has severely eroded purchasing power, while wages and incomes have failed to keep pace with rising living costs.
"Inflation has reduced real incomes across income groups, especially for low-and middle-income households. At the same time, income growth remains weak, making the cost-of-living crisis more acute," she said. She added that the problem is compounded by mounting default loans and deep-rooted structural weaknesses in the banking sector. "High levels of non-per-forming loans reflect governance failures, politi-cal interference and weak regulatory enforce-ment. These vulnerabilities are now a major threat to financial stability," said Fahmida, who has worked as a policy adviser for institutions including Bangladesh Bank, the World Bank and the United Nations.
According to economists, widespread corruption in credit allocation and loan recovery has dis-torted incentives in the financial system, dis-couraging productive investment while reward-ing rent-seeking behaviour. Price Control Needs Structural Reforms: Fahmida cautioned that con-trolling inflation will require more than monetary tightening alone. Although Bangladesh Bank has raised interest rates to reduce excess liquidity, she said price pressures persist due to market distor-tions and weak enforcement. "Interest rate hikes are necessary, but they are not sufficient. Market syndicates continue to dominate supply chains, allowing a few players to manipulate prices," she said.
