Eminent economist Debapriya Bhattacharya has cautioned that Bangladesh’s recent reciprocal trade agreement with the United States could restrict the country’s flexibility in sourcing energy at a time of growing economic pressure.
Speaking at a media briefing organised by the Centre for Policy Dialogue (CPD) on Tuesday, he said certain provisions in the deal limit trade with countries under US sanctions and categorise some economies as “non-market,” complicating imports from alternative suppliers such as Russia and China.
He noted that these restrictions could make it necessary for Bangladesh to secure formal waivers from Washington to access cheaper fuel, particularly Russian oil, at a time when the country is seeking to import around 600,000 tonnes.
Debapriya warned that the evolving geopolitical landscape is increasingly linking foreign policy with economic decision-making, potentially narrowing Bangladesh’s room to manoeuvre in securing energy supplies.
He also highlighted what he described as “triple macroeconomic pressures” - rising subsidies in the power sector, escalating fuel import costs, and growing demand for US dollars to settle external payments.
According to him, higher global energy prices could increase Bangladesh’s annual import bill by nearly $4.8 billion, putting further strain on foreign exchange reserves and widening external imbalances.
The economist added that increased demand for dollars may weaken the taka, while instability in the Middle East could affect remittance inflows, a key pillar of the economy.
Turning to the upcoming national budget, he said the government faces a “hard budget constraint” due to limited fiscal space, weak revenue mobilisation, and persistent structural challenges.
He stressed the need for careful spending priorities, disciplined fiscal management, and a balanced approach combining short-term stabilisation with longer-term reforms.
Without such measures, he warned, the country may struggle to maintain economic stability and sustain growth in the face of ongoing global uncertainty.
