Trump's tariffs created positive situation for Bangladesh's economy: Zahid Hossain

The tariffs imposed by US President Donald Trump have created a positive situation for the economy of Bangladesh, said Dr. Zahid Hossain, former chief economist of the World Bank's Dhaka office and member of the National White Paper Committee.

He said that compared to the 2022-23 fiscal year, the country's economy has now returned to stability and activity has also increased.

He made the comments at a discussion titled 'Macroeconomic Challenges and Ways Out' organized at the Economic Reporters Forum (ERF) Auditorium in Paltan in the capital on Saturday (August 30). Economic Reporters Forum (ERF) organized the memorial lecture in memory of its founding president late Moazzem Hossain, also the editor of the English daily The Financial Express.

According to Dr. Zahid Hossain, the main reason behind this stability is the ouster of those responsible for economic instability. As a result, money laundering from the country has stopped, hundi has decreased and foreign currency is now coming into the country through legal channels. He also mentioned that bank looting has also stopped.

He also said that the decisions in the international arena that affect Bangladesh's economy have also gone in Bangladesh's favour. Especially the decline in the value of the dollar is noteworthy.

Presenting an analysis, he said that the rate at which the Trump administration has imposed tariffs on India and China has created an opportunity for Bangladesh to export more than $2.05 billion to the US market in the 2025-26 fiscal year. The 30 percent lower tariff on Bangladesh compared to India has created an additional opportunity for exports of $1.2 billion to $2.07 billion. And due to the additional tariff on China, Bangladesh may export $7 to $25 million more to the US market.

He also said that overall, Bangladesh is now stuck in the middle-income country trap. The main reasons for this are the power and energy crisis, weak banking sector, limitations in the logistics system, lack of development of the labour market and institutional degradation.

Regarding the reform activities, Dr. Zahid said that there is no guarantee that reforms will be implemented even if there is political will. There must be reform delivery capacity to implement reforms. In this case, a joint or coordinated initiative of the advisory council, administration, business groups and civil society is needed. If these four parties do not work together, reforms will get stuck somewhere.

The commemorative speech programme, chaired by ERF President Daulat Akhter Mala, was moderated by the organization's general secretary Abul Kashem.