MACROECONOMIC performance, despite some improvements in the past nine months of the interim government, has still remained a cause for concern. A lack of political stability and the absence of necessary institutional reforms are believed to be hindering largely sustained macroeconomic progress. The Centre for Policy Dialogue in its third interim review of the macroeconomic performance for the 2024鈥�25 financial year says that the partial reforms effected by the interim government since it assumed office in August 2024 have been insufficient to foster economic stability. The review emphasises an urgent need for comprehensive reforms encompassing structural, administrative and legal aspects of economic and related institutions to ensure long-term macroeconomic stability and progress. It observes that inflation, unemployment and inclusive growth would remain unresolved without far-reaching reforms in public finance, market systems, the banking sector, the external sector, the capital market and the power and energy sector. The report also points out that the goal of reducing the current high inflation rate, hovering over 10 per cent, to 6.5 per cent in the next financial year, beginning in July, appears unrealistic. In addition, the continued lack of both local and foreign investment, coupled with inadequate job creation, remains a significant concern.
The review and the economists who attended its release on May 27 also stress that while comprehensive reforms are essential for improved macroeconomic performance, the delay in transition to a democratic political order through fair elections poses a serious risk. The sluggish investment during the nine months of interim governance indicates that the reforms undertaken thus far have fallen short. Persistent uncertainties, stemming from political instability, weaknesses in infrastructure, inefficient one-stop service provision and the lack of uninterrupted power and energy supply, continue to hinder investor confidence. The report rightly emphasises the importance of political stability, noting that it has been critical in attracting private and foreign investment and in boosting revenue mobilisation. Economists, therefore, recommend that the interim government should announce a specific date for the next general elections in consultation with political parties. They further suggest that elections should not be kept in the time frame from December 2025 to June 2026 and that necessary reforms in the economic sector should continue. While it is acknowledged that restoring macroeconomic stability and advancing from the condition left by the previous Awami League government is no easy task, comprehensive reforms and political stability are indispensable for achieving an early economic recovery.
The government should, therefore, prioritise strengthening institutions, enhancing governance frameworks and ensuring transparency and accountability in the implementation of economic policies. Simultaneously, it must take decisive steps on holding elections early to restore political stability, a major factor in economic stability and progress.
