The Bangladeshi government has acknowledged that its graduation from the United Nations’ Least Developed Country (LDC) category this year may worsen its already fragile economy, according to a report by The Daily Star. Due to factors like high inflation, falling exports, and increased energy and fertiliser costs due to the Middle East crisis, Bangladesh has requested a three-year extension to prepare for the loss of trade preferences. The removal of International Support Measures (ISMs) critical to exports and pharmaceuticals could deepen the country’s economic vulnerability.
A team, led by Commerce Minister Khandakar Abdul Muktadir, is currently in New York to seek support from other nations for extending Bangladesh’s graduation schedule. Additionally, Bangladesh is experiencing export losses following the signing of Free Trade Agreements (FTAs) between its competitors and the European Union and the United Kingdom. The US Trade Representative (USTR) is also investigating Bangladesh, which could result in restrictions on imports of products made with child and forced labor through additional duties.
The UN Committee for Development Policy (CDP) had recommended approving Bangladesh’s request to defer its graduation from the least-developed country (LDC) category from November 2026 to November 2029. This recommendation is pending formal ratification by the UN General Assembly. The finance ministry highlighted that investor confidence has weakened due to recent political instability and will require time to be restored. Moreover, the ministry recognized the necessity for more time to finalize FTA negotiations with trading partners to mitigate the risks of losing preferential market access.
Bangladesh’s economy, which had been growing at over 6 percent annually in the five years leading up to 2021, has since slowed down. Inflation has consistently exceeded 8 percent since 2022, and poverty levels are expected to increase in 2025, potentially pushing more individuals into extreme poverty.
