The Asian Development Bank (ADB) has forecast that Bangladesh’s economic growth could reach 4.0 per cent in the 2025–26 fiscal year, signalling a gradual but steady recovery despite persistent global and domestic challenges. According to its latest Asian Development Outlook, the country’s economy is expected to continue improving over the medium term, supported by recovering consumption, stabilising investment conditions, and easing external pressures.
The report estimates that Bangladesh’s growth stood at 3.5 per cent in the 2024–25 fiscal year. It projects a rise to 4.0 per cent in 2025–26, followed by a further acceleration to 4.7 per cent in 2026–27. ADB attributes this upward trajectory primarily to a slow but consistent rebound in private consumption and investment activity, alongside gradual improvements in supply-side conditions.
Key macroeconomic projections
| Indicator | 2024–25 FY | 2025–26 FY | 2026–27 FY |
|---|---|---|---|
| GDP growth | 3.5% | 4.0% | 4.7% |
| Inflation | ~9.0% | ~8.5% | Declining trend |
| Current account deficit | 0.5% | 0.6% | Slight increase |
The report highlights that inflationary pressures are likely to remain elevated in the near term. Rising global energy prices, combined with supply chain constraints, are expected to keep inflation close to 9 per cent in the current fiscal year. However, a modest easing is anticipated in the following year, with inflation projected to fall to around 8.5 per cent as import costs stabilise and domestic supply conditions improve.
On the external sector, the ADB projects a slight widening of the current account deficit. This is mainly attributed to rising import expenditure and a gradual expansion in the trade deficit. Nevertheless, steady inflows of remittances from overseas workers are expected to provide a crucial buffer, helping to stabilise the balance of payments.
The report also underscores the importance of political and policy stability in shaping Bangladesh’s economic outlook. It notes that reduced political uncertainty and more effective implementation of government policies could strengthen investor confidence, particularly in the private sector. Post-election stability, in particular, is seen as a potential catalyst for restoring normalcy in economic activity and encouraging capital formation.
From a sectoral perspective, services are expected to recover gradually, supported by improving domestic demand. Agricultural output is also projected to return to more normal levels, aided by favourable weather conditions and continued policy support. In the industrial sector, increased public investment in infrastructure and energy is likely to provide additional momentum to growth.
However, the ADB cautions that significant risks remain. Prolonged geopolitical tensions could continue to disrupt global energy markets, leading to volatility in oil and gas prices. Such fluctuations would have a direct impact on transportation costs, production expenses, and overall inflation dynamics within Bangladesh.
Furthermore, the report warns that sustained high global energy prices, combined with extended subsidy commitments, could place additional strain on government finances and widen the fiscal deficit. This would complicate macroeconomic management and may limit fiscal space for development spending.
Overall, the ADB concludes that Bangladesh is on a path of gradual and stable recovery. While the pace of growth remains modest compared with previous years, the outlook suggests a return to stronger performance in the medium term, contingent on continued reforms, investment in infrastructure, and improvements in the overall business environment.