Why Bangladesh Must Unleash its Economy Now

For the past year, Bangladesh has been celebrated in donor boardrooms for its "stability." We are told the Taka is steady and reserves have climbed past $30 billion.

But for the entrepreneur running a cement plant at 30% capacity, or the family struggling to secure a mortgage at 15% interest, this isn't stability -- it is the quiet of the graveyard.

The interim government’s economic strategy was all about performing a "controlled crash" to cure inflation. In the process, it is destroying the country’s industrial heart.

It is time to stop the bleeding and implement liberal market policies that empower the domestic buyer and jumpstart the "Tiger" once again.

The Reserve Paradox

The government proudly points to rising forex reserves as a badge of success. However, any honest look at the ledger reveals a darker truth: reserves are building primarily because imports have collapsed. When capital machinery settlements drop by 16%, it means the economy is deflating.

We are not "saving" money; we are failing to reinvest it. A factory running at 30% capacity is a factory waiting for a funeral.

A Currency Weaponized

While we stay frozen in a "contractionary" posture, our neighbors are playing a different game.

As of early 2026, the Indian Rupee (INR) has reached historic lows, while India’s domestic inflation has been reined in to 2.75%. This creates a devastating pincer movement for Bangladesh:

• Export Cannibalization: With a weaker Rupee and lower inflation, Indian garment exporters are underpricing us in the EU and US. They are "exporting their stability" while we import their inflation.
• The Margin Squeeze: Our exporters are forced to slash prices to stay competitive with India, but because our domestic interest rates are stuck at 15%, their profit margins have turned negative. We are working harder just to lose money faster.

Empowering the Homebuyer

To break this cycle, we must move beyond urban planning debates and embrace a liberalized real estate market. Real estate is the country’s most potent economic multiplier, but it is currently locked behind a wall of high costs and tight credit.

To unleash this sector, we must implement three core liberal reforms:

• Radical Tax Reduction: Slash property registration fees and stamp duties from the current double-digits to a flat 5%. This moves transactions from the "black market" to the formal economy, increasing government revenue through volume rather than high rates.
• The "First-Home" Credit Line: The central bank should mandate a specific liquidity window for home mortgages at single-digit interest rates (7-8%). If we can provide "stimulus" to failing banks, we can provide it to the citizens who actually build the economy.
• Deregulated Growth: Move away from restrictive, top-down zoning and allow the market to dictate density. High-velocity construction is the only way to move the cement and steel sectors from 30% capacity back to 80%.

Ditch the FDI Mirage

We must stop waiting for a "foreign savior." FDI is a coward; it only enters a room that is already warm.

The government’s obsession with MoUs is a distraction from the collapse of Domestic Direct Investment (DDI).

If a Bangladeshi family is too afraid to buy a home, and a local businessman is too afraid to build one, no venture capitalist from Singapore will bridge that gap.

The Verdict

The request to delay LDC graduation until November 2029 is a rare gift of time. But you cannot have a stable nation where the youth are unemployed and the factories are silent. Stability built on silence is an illusion.

To save the republic, we must unleash the domestic buyer.

This means breaking the liquidity dam, liberalizing the housing market, and betting on the Bangladeshi citizen over the foreign donor. 

It is time to pull the economy out of its controlled crash. You can prop up reserve numbers for a quarter, but you cannot fake prosperity for a generation.

Kawsar “KC” Chowdhury is an entrepreneur, commentator, and Co-Chair of the Global Bangladeshi Alliance. He works closely with the Bangladesh Caucus in the US Congress, helping shape diaspora-driven policy, trade, and education initiatives.