Dr. Yunus’ interim govt stabilized Bangladesh’s economy, halting reserve drops and boosting remittances, but faced high inflation, investor fears, and ongoing corruption.
The interim government led by Dr. Muhammad Yunus took over a country facing a total economic breakdown after 15 years of Sheikh Hasina’s rule. One of the biggest successes of the interim tenure was saving the economy from a complete collapse. The government successfully stopped the fast drop of foreign exchange reserves, stabilizing them at $34 billion. They also increased the flow of remittances (money sent by people working abroad) by monitoring banks more closely. High-level looting and corruption by top officials were largely stopped. Dr. Yunus used his global reputation to gain international trust and support during a very difficult time.
However, the interim government also faced major failures, especially in restoring investor confidence. Business leaders remained afraid to start new projects because the political future felt uncertain. While the top leaders were honest, corruption continued in lower levels of the government because the bureaucracy did not change. A rise in “mob justice” and attacks on businesses also scared away investors and made the country seem unsafe. While some economic numbers improved, the daily life of common people remained hard because the government could not lower the high cost of living.
When comparing loans, the amount of debt grew under both regimes for different reasons. By June 2024, the Sheikh Hasina government had a total debt of about Tk 18.32 lakh crore. This money was mostly spent on “Mega Projects” like the Padma Bridge and Metro Rail, though much was also lost to corruption. By September 2025, the total debt rose to Tk 21.49 lakh crore under Dr. Yunus. The interim government borrowed about $3.4 billion in budget support from international groups like the IMF to pay back old debts and keep the country running because they could not collect enough taxes.
Inflation remained a major problem for both governments. Under Sheikh Hasina, prices were already high and rising. Inflation hit 11.7% by July 2024 due to supply issues and global crises. Under Dr. Yunus, inflation stayed around 8.5% to 9%. It dropped from Hasina’s peak but remained high. Energy and import costs kept prices up for everyone. To explain this to an 8-year-old: imagine you have 10 Taka to buy 10 candies. But then, the shopkeeper says 10 Taka can now only buy 8 chewing gum. The price of each chewing gum went up. That loss of “buying power” is called inflation. In Bangladesh, high costs for energy and imports kept prices high for everyone.
The garments and textile sector saw a very positive change during the interim period due to a new trade deal with the United States. The tax (tariff) to send clothes to America was reduced from 37% to 19%. Even better, clothes made in Bangladesh using US-grown cotton can now enter the American market with zero tax. This makes Bangladeshi clothes much cheaper for American buyers and helps our factories get more orders. Despite some unrest, export earnings in this sector remained “reasonably good”.
In terms of GDP and growth, the economy slowed down significantly during the interim tenure. Private investment hit a very low point because banks were not giving out many new loans, and bad loans (loans not paid back) reached a record Tk 4.20 lakh crore. For the first time in history, the interim government passed a smaller budget than the year before to try and control spending. While foreign reserves were built back up to $34 billion, the overall economic growth was weak because businesses were “sitting quietly” waiting for a permanent government.
Finally, Dr. Yunus changed the country’s foreign policy to be more independent and dignified. Relations with India became tense because Sheikh Hasina lived there in exile and the interim government disliked her public statements. However, ties with China grew stronger, with new agreements on managing the Teesta River and building a large hospital in Nilphamari. The government also worked closely with the USA and Japan to sign business deals that will help the economy in the long run. Overall, the government moved away from following other countries’ orders and focused on what was best for Bangladesh.