Published : 23 Sep 2026, 02:47 PM
Updated : 23 Sep 2026, 02:47 PM
The Asian Development Bank has lowered its forecast for Bangladesh's economic growth in fiscal year 2026-27 to 4 percent, while expecting average inflation to rise to 9 percent.
In its Asian Development Outlook September 2026, released on Wednesday, the Manila-based lender said Bangladesh's economy was estimated to have grown 3.7 percent in FY2025-26, compared with 3.49 percent in the final figures for FY2024-25.
The latest FY2027 growth forecast is lower than the 4.5 percent projection made in ADB's July update and the 4.7 percent forecast in its April outlook.
Economic activity slowed in the final quarter of FY2026 as conflict in West Asia disrupted supply chains, although ADB expects the impact to remain limited.
Stronger consumption and investment as political uncertainty eases following the early-2026 general election are expected to support growth, it said.
“Bangladesh's economy is beginning to recover, but the recovery remains vulnerable to external shocks and domestic constraints,” ADB Country Director Qingfeng Zhang said.
ADB previously expected inflation to have eased to 8.7 percent in FY2026 from 10 percent a year earlier, but forecasts it will rise to 9 percent in FY2027.
Energy shortages, high production and transport costs, possible shipping disruptions, delayed effects of El Niño on food prices and gradually easing monetary conditions could keep inflation elevated, it said.
The current account deficit is projected to widen to 0.6 percent of GDP in FY2027 from 0.3 percent in FY2026 as imports grow faster than exports.
Remittances are expected to remain strong and, together with higher foreign exchange reserves, support external stability.
Services and agriculture are expected to drive growth, while industry and investment may remain constrained by high borrowing costs, limited access to credit, energy shortages, weaker external demand and structural challenges.
Remittance-supported consumption is expected to remain the main growth driver, although high inflation will continue to squeeze purchasing power.
ADB warned of risks from a prolonged West Asia conflict, higher oil prices, shipping disruptions, tighter trade restrictions, weaker growth in major export markets, exchange-rate pressures, banking-sector stress, delays in fiscal reforms, lower development spending and climate shocks.
Zhang urged faster reforms in macroeconomic management, the financial sector, energy security and the business environment to boost private investment and create quality jobs.
Bangladesh's FY2027 growth target is 6.5 percent, 2.5 percentage points above ADB's forecast. The interim government's FY2025-26 budget had targeted 5.5 percent growth.
