The latest economic review, organized under the leadership of Professor Muhammad Yunus, is itself a strong endorsement of the thoughtful leadership exemplified by the Interim Government. It was anything but a routine exercise involving the presentation of economic numbers but actually translated a governing philosophy that is based on the principles of disciplined leadership, rather than being driven by expedience, pragmatism, rather than being an exercise in populist politicking, or driven by institution-building, rather than hostages to short-term political gains. It is difficult to overstate the significance of the latest review, under the leadership of Dr. Yunus, who is ably assisted by his competent economic team.

In this environment, in which the public has largely lost confidence due to the ill effects of inflation, economic imbalances, and systemic failures in governance, the results of this review offer a guarded yet definite glimmer of hope. The information states that this rebalancing has occurred in a systematic, not harsh or forced, fashion, which this commentary will seek to understand through an interpretation of these developing indicators in the context of the transition led by the Interim Government in its management of the economy.

Inflation Control: Transitioning From Emergency to Management

Inflation has proved to be one of the most destabilizing factors in the social and political sphere. It is significant to take note of the fact that the current slowdown in headline inflation to below 9 percent on both 12-month averages and point-to-point figures for the first time since mid-2023 signifies more than a statistical benchmark. It is the outcome of contractionary monetary policies and fiscal prudence. More significantly, however, is the trend shown by the figures. The subsequent dip to 8.29 percent in November 2025, targeting less than 7 percent by June 2026, represents a leadership that has opted to adopt a more disciplined approach in policy-making, as opposed to a populist approach that would have been more immediate and corrective, albeit at a very high cost in the interim period that would not have built a strong policy foundation in the process. This contrasts sharply with the past, in which inflation was tolerated and not always taken into account.

Wage-Inflation Convergence and the Return of Real Income

Among the most significant social impacts of the review is the rising parity between wage growth and inflation. For quite some time, real wages were declining as inflation consistently outpaced wage growth, especially for low- and middle-class families. However, with wage growth of nearly the same figure (8.04%) as inflation (8.29%) as of November 2025, there is actually cause to believe that the worst of the decreases in our real income may just be behind us. While it is no moment of prosperity, it just represents the most crucial transition—from decline to stability. This way, if the trend persists, it could help revive overall consumer confidence and domestic demand without adding to inflation.

Agriculture as an Anchor of Stability

The agriculture sector has remained an important pillar of the Bangladeshi economy's resilience. High Boro production and promising developments in Aman harvests, except in cases of adverse weather, have greatly enhanced food security in the country at a highly important time.

The estimated Aman production of more than 16 million metric tons as of mid-December, with the possibility of surpassing targets, bears testimony to the success of policies that offer incentives and to better-managed sector performance. Notwithstanding some minor setbacks in Australia, the sector has recorded more than 7 percent growth in annual production.

In situations where food prices have a significant impact on inflation, stable agricultural performance plays a critical role as a macroeconomic shock absorber.

External Sector Repair: Reserves, Remittances, and Credibility

One of the most evident indicators of regaining economic confidence is the rapid growth of foreign exchange reserves, which stood at around USD 25 billion in August 2024 and increased to USD 32.57 billion in December 2025. Such growth is driven by various interlinked factors, including a stable exchange rate, improved remittances, higher interest rates, and strict regulations to manage capital outflows. An important part of this process has been Bangladesh Bank's adoption of a more orthodox monetary policy approach, which helped assuage concerns about capital outflows. What is most admirable about this position is the significant reduction in the current account deficit. The deficit peaked at over USD 18 billion but is now down to just over USD 139 million as of FY 2024-25. This is not a result of good fortune but structural changes that are also backed by the fact that the deficits are now manageable.

 

Migratory Patterns and the Economic Significance of Human Capital

The large jump in foreign employment a total of 500,000 in five months and the 17 percent growth in remittances show that worker migration remains the best external stabilizer for Bangladesh. Remittances of $13.04 billion during the period from July to November in 2025 have not only increased foreign reserves but also helped expand the country's consumer base and, more importantly, the rural economy. Unlike before, when remittances were primarily a source of income, they have now become macroeconomic stabilizers.

Reviving Trade and Investment - A Cautious Reawakening

Removal of import restriction policies indicates a deliberate change in strategy. Although import restriction policies had been useful for conserving reserves, sustaining them might have been detrimental to the country’s productive capacity. The rise in import growth, from a contraction rate of –1.2 percent to +6.1 percent, indicates confidence in the economy's absorption capacity.

More significant is the dramatic turnabout in letters of credit (LCs). The LCs for capital machinery grew by nearly 28 percent, whereas the LCs for raw materials escalated by more than 40 percent. These are clear indications that investors are moving from survival to expansion mode. Trade finance is a good barometer of confidence in the international community. It appears to have regained confidence, as the country's image in financial matters was previously tarnished.

Beyond the Numbers: A Return to Sound Economic Governance

Taken altogether, the findings of this review suggest something much deeper than positive statistical trends—instead, they point to a return to optimal economic management. This new approach to economic management rests neither on image nor on sequencing, but on prudence.

With the leadership of the Interim Government, economic policy making becomes less cyclical and political and more rationalized and corrective. Even if the economy is not yet on the path to full recovery, it definitely is not in free fall either.

In this evolving world, which faces turbulence in geopolitical environments and escalated financial conditions, this rebalancing would perhaps be the most important achievement in 2025 for a country like Bangladesh. The future would be about protecting these achievements in both the external environment and the domestic policy. However, the message today from Jamuna remains clear: the economy is stabilizing not through rhetoric but through discipline.

 

Bangladesh in the South Asian Context: A Measured Outperformance

Regionally speaking, Bangladesh's macroeconomic performance under the Interim Government is remarkable not only credible but, in some ways, stronger than others. Whereas the rest of South Asia is languishing amid inflation, debt, and vulnerability to global economic shifts following the pandemic, Bangladesh seems to be embarking on a planned recovery.

Inflation

By late 2025, maintaining a positive trend, Bangladesh has been successful in lowering headline inflation to 8.3 percent, targeting a figure below 7 percent by mid-2026. Compared to Pakistan, inflation is still volatile at a level of 20-25 percent; in Sri Lanka, it is struggling at 9-11 percent, while India is doing better at 5-6 percent, though at a cost of liquidity and stagnant wages in various sectors, especially in the unorganized ones. Bangladesh's position is mid-ranking, but it is improving.

Wage Growth and Real Income

The near parity between wage and inflation figures in Bangladesh is heartening in comparison to what is happening in both Pakistan and Sri Lanka. Even in India, there are signs that wage growth has yet to fully match food inflation. However, the narrowing of the wage-inflation gap in Bangladesh is indicative of an important kind of recovery.

Agricultural Stability and Food Security

Agriculture in Bangladesh performed better than in many countries in the region, with agricultural production, especially paddy, registering over 7 percent year-on-year growth. However, agricultural reconstruction in Sri Lanka remains precarious, while that in Pakistan is intermittently disrupted by climate change shocks. The rural economy in India is also struggling. Under these circumstances, Bangladesh has maintained steady foodgrain production, which has helped manage food inflation.

External Sector and Reserves

The country’s reserves have increased to USD 32.6 billion, a remarkable recovery in comparison to Pakistan’s reserves, which hover around 8-9 billion dollars, sufficient for a few weeks’ imports, and Sri Lanka’s reserves, which depend on IMF funding. Although India’s reserves are above 600 billion dollars, “the growth path for Bangladesh’s reserves is highly commendable in comparison to other lower middle-income countries in South Asia.”

Remittances & Labor Mobility

Remittances to the country crossed USD 13 billion in five months, surpassing Sri Lanka and Nepal in remittance growth rate and closing in fast on the Pakistani market, while employment abroad also increased by more than 25 percent compared to the previous year. Investment and Trade: The growth in imports is up by 6.1 percent, while LCs issued for industrial raw materials surged more than 40 percent, a contrast to Pakistan’s import squeeze and Sri Lanka’s cautious expansion, signaling that industries and productive sectors are slowly turning from surviving to planned expansion.

A Regional Context of Relative Confidence

Although Bangladesh has not attained the same level of size and institutional development as India, nor can it claim to be fully insulated from the dangers threatening the region, it stands out for its policy continuity and the correction of course that has been introduced. While some countries are still stuck in crisis management or externally imposed change, Bangladesh is managing the crisis through self-correcting policies. Such an outlook helps emphasize the dominant theme of this commentary: that Bangladesh’s success is hardly an accident. It is a result of intelligent leadership, technical knowledge, and a commitment to end politically expedient yet unviable economic policies. Such a policy will, eventually, place Bangladesh among the most resilient economies of South Asia after the current crisis has passed.

Conclusion: Leadership Beyond Headlines

In fact, Professor Muhammad Yunus has achieved a great deal in his role as the Chief Adviser in a fashion that has largely remained unobtrusive, behind the scenes, in terms of the kinds of sensationalism that front-page news reporting entails, rather than in the more trivial, spectacle-loving fashion in which domestic politics has remained enthralled. During this time, the leadership has managed to restore policy coherence. This is because all ministries are now working under financial and monetary constraints. Also, there are regulatory institutions that are working in an autonomous capacity. This is in addition to gaining back credibility that had been lost both locally and globally. More importantly, perhaps, Prof. Yunus has reminded us that leadership requires values, demonstrating that strength sometimes lies in abstinence, that it is sometimes intelligent to wait, and that a stability that comes from truth is ultimately much more solid than the appearance of expansion that comes from illusion. While the Interim Government has chosen to ignore the applause of crowds for the sake of change, it has laid a foundation that all future governments will find impossible to avoid. This, arguably, will turn out to be among the strongest and most lasting influences brought about by Dr. Yunus, even if it is the one least highlighted in current reports or developments.