The Asian Development Bank has forecast that Bangladesh’s economic growth may rise to 4.0 per cent in the 2025–26 fiscal year, signalling a gradual but steady recovery despite persistent global and domestic headwinds.
In its latest Asian Development Outlook assessment, the multilateral lender noted that the country is navigating a complex environment shaped by global economic uncertainty, disruptions in supply chains linked to geopolitical tensions in the Middle East, and ongoing structural constraints within the domestic economy. Nevertheless, it emphasised that Bangladesh is slowly moving towards a recovery path.
According to the report, Bangladesh’s gross domestic product (GDP) growth stood at 3.5 per cent in the 2024–25 fiscal year. This is projected to improve to 4.0 per cent in 2025–26, before accelerating further to 4.7 per cent in 2026–27. The improvement is expected to be driven primarily by a gradual rebound in private consumption and a modest recovery in investment activity.
The report highlighted that restored political stability and more efficient implementation of public development programmes could further strengthen economic momentum. In particular, a more stable post-electoral environment is expected to improve business confidence and encourage private sector expansion.
However, the Bank also cautioned that Bangladesh continues to face significant macroeconomic pressures, including elevated inflation, external account strain, and vulnerabilities in its trade balance. It stressed that structural reforms, improved governance, and more effective policy coordination would be essential to sustaining long-term growth.
Inflation remains a key concern. The report estimated that consumer price inflation could remain close to 9.0 per cent in the current fiscal year, largely driven by volatile global energy prices and persistent supply-side constraints. It is expected to ease slightly to around 8.5 per cent in 2025–26, though risks remain tilted to the upside if global commodity markets remain unstable.
On the external front, the current account deficit is projected to widen marginally due to rising import expenditure and ongoing pressure on the trade balance. However, stable inflows from remittances are expected to provide partial relief, helping to maintain a manageable external position.
From a sectoral perspective, the services sector is anticipated to recover gradually as domestic demand strengthens. Agriculture is expected to perform steadily, supported by favourable weather conditions and continued government support. Meanwhile, the industrial sector is likely to benefit from infrastructure expansion and increased investment in the energy sector, improving production capacity and supporting overall growth.
The report also warned of medium-term risks. Prolonged geopolitical tensions could sustain volatility in global energy markets, pushing up oil and gas prices. This would likely increase transport and production costs, thereby feeding into higher inflation.
Fiscal pressures may also intensify if elevated energy prices persist alongside extended subsidy commitments, potentially widening the budget deficit and constraining public investment.
Key Macroeconomic Indicators
| Indicator | 2024–25 | 2025–26 | 2026–27 |
|---|---|---|---|
| GDP Growth | 3.5% | 4.0% | 4.7% |
| Inflation | ~9.0% | ~8.5% | Declining trend |
| Current Account Deficit | 0.5% | 0.6% | Slightly rising |
Overall, the Asian Development Bank assessment suggests that Bangladesh remains on a path of slow but stabilising recovery. Sustained policy reforms, improved investment conditions, and prudent macroeconomic management will be critical in determining the strength and durability of future growth.