Archive · 4 Jan 2026
Bangladesh and Pakistan Face Economic Challenges
Bangladesh and Pakistan are both facing serious economic problems.
In Bangladesh, banks are struggling because many loans aren't being paid back, and businesses aren't investing much.
The government isn't making big changes to fix these issues.
In Pakistan, the textile industry, which is very important for the country's economy, is in trouble.
Factories are closing, and exports are dropping.
This is because it's too expensive to make textiles in Pakistan compared to other countries.
Both countries need to make some big changes to get their economies back on track.
Bangladesh faces rising non-performing loans and sluggish investment due to high interest rates and government borrowing.
Pakistan's textile sector is on the brink of collapse with declining exports and a widening trade deficit.
Bangladesh needs to improve revenue mobilisation and political stability to attract global investors.
Pakistan's textile sector is uncompetitive due to high energy costs and inconsistent policies.
Both countries require significant policy changes to address their economic challenges.
- Who
- Bangladesh and Pakistan are the primary countries facing economic challenges.
- What
- Bangladesh is dealing with rising non-performing loans and sluggish investment, while Pakistan's textile sector is on the brink of collapse.
- When
- The challenges are ongoing and expected to spill into 2026.
- Where
- The issues are primarily in Bangladesh and Pakistan.
- Why
- Bangladesh's government relies heavily on high-cost borrowing, and Pakistan's textile sector is uncompetitive due to high energy costs and inconsistent policies.
- Bangladesh's Economic Issues
- Rising non-performing loans, high interest rates, sluggish investment, and debt defaults.
- Pakistan's Textile Sector
- Facing collapse, with exports declining and a trade deficit widening.
- Bangladesh's Export Growth
- Slowed in recent months, highlighting the need for cost reduction and better management.
- Pakistan's Export Decline
- Over 14% year-on-year in November 2025, marking the fourth consecutive month of contraction.
- Bangladesh's Revenue Mobilisation
- Requires tax digitisation, capacity building, and reduced VAT leakages.
- Pakistan's Textile Sector Contribution
- Over 60% of total exports and employs millions directly and indirectly.
- Bangladesh's Political Stability
- Essential for engaging with global investors and trade partners.
- Pakistan's Economic Stabilisation
- Shaped by IMF conditionalities, prioritising demand compression and fiscal tightening.