GROWING unemployment, persistent economic instability and a struggling banking sector appear to be major causes for concern now and in the foreseeable future. Economists and business and political leaders rightly underscored the concerns at an economic conference on November 29. It is a growing national anxiety that a large number of people are unemployed and underemployed, which has not only heightened public disappointment but also widened social inequality. Economists rightly pointed out that the economic distress is neither accidental nor temporary. It is, rather, rooted in years of industrial stagnation, regulatory deterioration and chronic structural weaknesses in the banking sector. Private investment, traditionally expected to drive job creation, has shrunk by an alarming degree, showing deep confidence issues in the business community. The contraction of private sector credit to a 23-year low, plummeting to 6.35 per cent in August 2025, highlights both the severity of the crisis and the harsh impact of a widespread non-performing loan culture. With more than a third of all loans now classified as non-performing, banks increasingly lack the capacity to support new enterprises. This has directly constrained job creation.
The unemployment picture becomes even more troubling when one considers the contested nature of official statistics. Government metrics, which count anyone working for at least an hour per week as ‘employed’, dilute the underemployment situation and obscure the economic distress experienced by millions. Independent studies, by contrast, estimate the unemployment rate at 20–25 per cent, exposing a far more dire reality than the one captured in official reports. This discrepancy reflects deepening slowdowns in both the private and informal sectors, which together absorb the overwhelming majority of the work force. Even the once-reliable apparel industry, a sector that propelled Bangladesh onto the global stage as a manufacturing hub, has registered negligible job growth in recent years. At the centre of this stagnation lies the fragile banking sector. Non-performing loans now exceed 35 per cent, one of the worst in the world. The central bank governor’s stark warning that recovery could require up to a decade underscores the gravity of the structural damage that happened during the Awami League regime. Years of politically motivated lending, weak oversight and regulatory complacency have burdened banks with toxic portfolios that severely impair their ability to fund industrial growth and catalyse economic expansion. Business confidence also stands at a low.
The government should, therefore, prioritise rebuilding business confidence, promoting investment in labour-intensive industries and enforcing financial discipline through robust reforms. Ensuring consistent policies and maintaining political stability will also be essential for attracting both domestic and foreign investments. Only through such coordinated efforts can the country hope to reverse stagnation and move towards a more resilient and equitable economic future.
