The economy has been under multiple layers of pressure for several years, with both domestic and global factors further intensifying existing challenges. According to the Centre for Policy Dialogue (CPD), although some recent economic indicators have shown temporary signs of relief, these improvements are not sustainable and conceal a range of unresolved structural weaknesses.
These observations were presented at a media briefing held on Thursday at CPD’s Dhaka office in Dhanmondi. The briefing focused on “Bangladesh Economy in FY2025–26: Multifaceted Challenges in a Transitional Period”. CPD Special Fellow Dr. Mustafizur Rahman and Executive Director Dr. Fahmida Khatun, among others, addressed the event.
CPD stated that the decline in non-performing loans (NPLs) in the banking sector does not reflect a genuine improvement in asset quality. Instead, measures such as loan rescheduling, restructuring, and write-offs have masked the underlying financial stress. The institution also highlighted that institutional weaknesses, inadequate enforcement of laws and regulations, and a lack of accountability have deepened the overall economic vulnerabilities.
Dr. Fahmida Khatun said that while some indicators have recently shown signs of relief, these trends are not permanent. Financial, social, and productive sectors remain under sustained pressure, a situation that has persisted for several years. She added that inflationary pressures, public financing constraints, and stress in the banking sector have not yet been fully resolved.
According to CPD data, the banking sector’s NPL ratio stood at 35.7 per cent in September 2025, which declined to 32.26 per cent in March 2026. During the same period, excess liquidity rose from 43 per cent in May 2025 to 55 per cent in March 2026. The loan-to-deposit ratio (LDR) fell from 0.89 to 0.84, indicating increased caution in lending and weak credit demand from the private sector.
Key Banking Indicators
| Indicator | 2025 Position | 2026 Position |
|---|---|---|
| Non-performing loan ratio | 35.7% (September) | 32.26% (March) |
| Excess liquidity | 43% (May) | 55% (March) |
| Loan-to-deposit ratio (LDR) | 0.89 | 0.84 |
CPD further reported that an asset quality review is underway for 17 banks. Preliminary findings from six banks show significantly higher levels of non-performing loans compared to officially reported figures, indicating discrepancies in the disclosed financial health of these institutions.
The main report also noted that the revenue collection target for the current fiscal year has become unrealistic. Between July and March, revenue growth stood at only 6.9 per cent. To meet the annual target, a growth of 84.6 per cent would be required in the final quarter, which CPD considers highly unlikely. The National Board of Revenue (NBR) also recorded a shortfall of Tk 104,533 crore against its target between July and April.
Dr. Fahmida Khatun further stated that inflationary pressures remain elevated. In April 2026, overall inflation stood at 9.04 per cent, food inflation at 8.39 per cent, and non-food inflation at 9.57 per cent. Rising costs in energy, transport, and services continue to drive price pressures. Although wage growth was recorded at 8.16 per cent, it remains below inflation, resulting in a decline in real purchasing power.
CPD concluded that despite temporary improvements in selected indicators, sustainable economic stability will require comprehensive structural reforms.