5 Critical Updates On Dacca (Dhaka), Bangladesh: Economy, Politics, And Infrastructure In 2025

Dhaka, the vibrant and historically significant capital of Bangladesh (formerly known as Dacca), is currently navigating one of its most critical periods in modern history. As of late December 2025, the city stands at the epicenter of a nation undergoing profound political, economic, and infrastructural transformation. The confluence of a new political administration, ambitious megaprojects, and severe economic headwinds makes understanding the current state of Dhaka essential for investors, policymakers, and global observers.

This article provides an in-depth look at the five most critical and up-to-date developments shaping the city, moving beyond general knowledge to focus on the fresh, unique challenges and progress reported in 2025, particularly following the significant political shifts of 2024.

The New Political and Economic Reality of 2025

The political landscape in Bangladesh has fundamentally shifted, directly impacting the capital, Dhaka. Following significant student-led protests in July 2024, a new political movement and a caretaker government were installed, replacing the long-standing administration. This political upheaval has created a critical juncture for the nation, with the military-backed interim government, led by Nobel laureate Muhammad Yunus, now responsible for stabilizing the country.

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The economic outlook for Dhaka and Bangladesh in Fiscal Year (FY) 2025 is notably subdued, reflecting the ongoing instability and global pressures. The economy continues to face significant challenges, notably elevated inflation, investment moderation, and deep vulnerabilities within the financial sector.

• Lowered GDP Growth Projections: Major international bodies have revised their forecasts downward. The Asian Development Bank (ADB) projects Bangladesh’s gross domestic product (GDP) to grow by 3.9% in FY2025, a slower pace than previous years.
• World Bank Forecast: The World Bank has been even more cautious, slashing its GDP growth projection for FY2025 to as low as 3.3%.
• Economic Stabilization Efforts: Despite Dhaka's efforts to improve the economy, it has not yet been fully stabilized, requiring strong and timely reforms to sustain inclusive growth. The city remains the central driver, contributing approximately 35% to the national economic growth of GDP.

Dhaka’s Transformative Infrastructure Megaprojects

Dhaka is in the midst of a massive infrastructure overhaul aimed at alleviating its notorious traffic congestion and boosting connectivity. Two critical projects—the Metro Rail and the Elevated Expressway—are redefining the city’s skyline, though both are facing significant challenges and revised timelines.

The Status of the Dhaka Elevated Expressway (DEE)

The Dhaka Elevated Expressway is a vital project intended to connect the city's northern and southern parts, linking the Airport to Banani, Moghbazar, and ultimately connecting to the Mawa-Bhanga route. This connection is expected to significantly boost trade and reduce travel times.

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• Revised Completion Timeline: Originally slated for completion by June 2025, the target has been pushed back. The current completion deadline for the main DEE project is set for December 2026.
• Dhaka–Ashulia Elevated Expressway Delays: The capital's second elevated expressway, being built between Dhaka and Ashulia, is experiencing deeper delays and cost overruns. The project, inaugurated in November 2022, may not be finished until 2027, with the Bridges Division requesting further funding in July 2025.
• Construction Phases: Construction is being carried out in three main phases: Airport to Banani, Banani to Moghbazar, and Moghbazar onwards.

Metro Rail (MRT) Expansion and Long-Term Plan

The Dhaka Metro Rail, officially the Mass Rapid Transit (MRT), is already partially operational and has had a visible socioeconomic impact on the city. However, the full vision for the network is a long-term endeavor.

• Ongoing Progress: Construction work on the first Metro Rail line is progressing, with one report noting a 49.15% completion rate on the overall project.
• Extended Timeline: The Dhaka Mass Transit Company Limited (DMTCL) is planning a fresh, extended timeline for developing five additional metro rail lines, with the full completion timeline potentially stretching until 2035.
• Budget Cuts: Despite the ambitious long-term plan, projects like MRT Line-1 and Line-5 have seen significant budget reductions in the Revised Annual Development Programme (ADP), which could impact the pace of construction.

The Drive for Urban Planning and Climate Resilience

As one of the world's most densely populated megacities, Dhaka faces immense urban challenges, from housing and sanitation to climate change vulnerability. Recent initiatives are focusing on modern, data-driven solutions.

• Climate Action Plan: Dhaka South City Corporation (DSCC) has launched the city’s first-ever Climate Action Plan. The goal is to make Dhaka more livable and climate-resilient by 2050 through reducing city-wide emissions.
• Modern Planning Urgency: Environmental, Forest, and Climate Change Adviser Syeda Rizwana Hasan has urged bold reforms to address Dhaka's long-standing urban issues, emphasizing the need for modern urban planning.
• Dhaka Thrive Initiative: The "Dhaka Thrive" project was launched in 2024 to provide data-driven insights for climate resilience and urban development. This initiative focuses on open-source mapping and data to better inform planning decisions.
• Development Authority Challenges: The Rajdhani Unnayan Kartripakkha (RAJUK), the city development authority, has faced criticism for not initiating key projects, such as the five regional parks planned under the Detailed Area Plan (DAP), necessary to restore liveability in the capital.

Key Entities and Topical Authority:

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The current narrative surrounding Dacca (Dhaka) is rich with specific entities that define its future:

• Muhammad Yunus (Interim Government Leader)
• Dhaka Elevated Expressway (DEE)
• Dhaka–Ashulia Elevated Expressway
• Dhaka Mass Transit Company Limited (DMTCL)
• Metro Rail (MRT) Line-1 and Line-5
• Dhaka South City Corporation (DSCC)
• Rajdhani Unnayan Kartripakkha (RAJUK)
• Asian Development Bank (ADB)
• World Bank
• International Monetary Fund (IMF)
• Syeda Rizwana Hasan (Adviser)
• Climate Action Plan (2050 Goal)
• Dhaka Thrive Initiative
• Fiscal Year 2025 (FY2025)
• July 2024 Political Upheaval
• GDP Growth Projections
• Inflation and Financial Sector Vulnerabilities
• Urban Development and Planning
• Detailed Area Plan (DAP)
• Mawa-Bhanga Route (Connectivity)