Bangladesh could secure an additional $1.2 billion to $2.32 billion worth of export orders in the financial year 2025–26, diverted from India and China due to higher tariffs imposed on the two countries by the Trump administration.

Zahid Hussain, former lead economist at the World Bank’s Dhaka office, made the observation while delivering the ‘Moazzem Hossain Commemorative Lecture,’ organised by the Economic Reporters’ Forum (ERF) at its office in the capital on Saturday.

He said that $1.2 billion to $2.07 billion worth of orders might shift from India alone due to a 30 per cent higher tariff, while an additional $7 million to $250 million could be diverted from China.

Speaking on the topic Macroeconomic Challenges and the Way Forward, Zahid said that economic activity in Bangladesh had picked up and overall stability had improved compared to FY23.

However, he cautioned that conditions at the household level had deteriorated, with poverty and inequality on the rise.

‘Economic stability has been restored mainly due to the removal of those responsible for previous instability,’ he said, adding that money laundering had come to a halt, which contributed to a sharp decline in informal money transfers and a rise in foreign currency inflows.

Zahid said, however, that the underlying weaknesses of the banking sector had not been resolved, with defaulted loans continuing to increase despite the halt in large-scale laundering.

He pointed out that global developments had created favourable conditions for Bangladesh, including a notable decline in the value of the US dollar.

‘There has been a shift in economic management, with greater discipline in policymaking. But this does not mean all government decisions are correct,’ he said.

Despite the positive outlook, he warned that Bangladesh remained stuck in the middle-income trap. Among the key obstacles, he identified the power and energy crisis, a fragile banking sector, weaknesses in logistics, underdeveloped labour markets, and institutional decay.

On reforms, he stressed that political will was necessary but insufficient without strong implementation capacity and coordinated action involving the Council of Advisers, the administration, the business community, and civil society.

‘Without collaboration among these four groups, reforms will likely stall,’ he said.

On the current Council of Advisers, Zahid described them as ‘sincere and courageous in some areas, yet helpless or directionless in others.’

Prominent businessman Mahbubur Rahman, president of the International Chamber of Commerce, Bangladesh, expressed frustration that the changes anticipated after the July revolution had not materialised and that inequality had, in fact, worsened.

ERF president Doulat Akter Mala presided over the memorial lecture, which was moderated by general secretary Abul Kashem.

The forum organises the annual commemorative lecture in memory of its founder president, late Moazzem Hossain, who was also founding editor of the English daily The Financial Express.