Bangladesh’s economy is predicted to gradually recover following a slowdown, with growth projected at 3.9% in fiscal year 2025-26, as per the World Bank. The recovery is attributed to improving domestic demand and stabilizing conditions after political unrest and external pressures impacted economic activity. Private consumption is expected to be the primary growth driver, while investment may remain subdued due to uncertainty and financial constraints.
The report highlights that the economy is bouncing back from disruptions caused by political instability in late 2024, which affected investment, exports, and overall economic momentum. Despite challenges, including high inflation driven by currency depreciation and supply disruptions, the World Bank suggests that growth could strengthen in the medium term with the implementation of reforms and sustained political stability.
Inflation concerns persist due to elevated price pressures, leading to limited purchasing power and hindering economic recovery. The banking sector faces stress from high non-performing loans, impacting lending capacity and investor confidence. External pressures, such as higher global energy prices and import reliance, are expected to strain current account and fiscal balances, posing macroeconomic challenges.
According to separate projections, Bangladesh’s growth may rise to approximately 4.6% in FY2025-26 and further to about 6.1% in FY2026-27 as inflation eases and investment increases. Despite being one of South Asia’s fastest-growing economies, Bangladesh continues to grapple with financial sector weaknesses, external vulnerabilities, and political uncertainty, influencing its growth trajectory.
