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In recent decades, Bangladesh was considered a rising success story in South Asia, but this changed when Sheikh Hasina's government was overthrown in early August due to student protests.
In recent decades, Bangladesh was considered a rising success story in South Asia, but this changed when Sheikh Hasina’s government was overthrown in early August due to student protests.
Economic discontent, alongside political dissatisfaction, contributed to the destabilization of Hasina’s regime. A new interim government, led by Nobel laureate Muhammad Yunus, has taken over, with a Cabinet formed from civil society and including two student leaders.
This transition followed the dissolution of Parliament by the president and discussions between student leaders, civil society, and the military. The immediate focus for Bangladesh is to restore order and stabilize its economy, while long-term efforts must address the broader economic issues that sparked the protests.
Bangladesh’s economy, which enjoyed steady 6% growth from 2011 to 2019, faced setbacks due to the COVID-19 pandemic. Before the pandemic, retail inflation had dropped below 6%, and GDP per capita had doubled from $1,032 in 2011 to $2,154 in 2019.
However, post-pandemic, growth is expected to remain below 6% in 2024, with inflation exceeding 9% and a devalued currency, the taka. This devaluation has diminished per capita income in dollar terms and strained forex reserves, exacerbating unemployment and contributing to the downfall of Hasina’s government.
Bangladesh’s over-reliance on textiles—where the share of textile and clothing exports rose from 84.7% in 2009 to 87.5% in 2022—has further strained its economy, leading to a significant trade deficit and currency devaluation.
