Bangladesh’s growth could reach 4pc in current fiscal year: ADB - Prothom Alo English

The Asian Development BankThe Asian Development Bank (ADB) has forecast an increase in Bangladesh’s economic growth rate, saying the country’s growth could rise to 4 per cent in the 2026–27 fiscal year.

The projection was made in its latest “Asian Development Outlook September 2026”. ADB’s September 2026 data series also identifies the 2026–27 figures as forecasts.

According to ADB, Bangladesh recorded 3.5 per cent growth in the 2024–25 fiscal year. Growth could rise slightly to 3.7 per cent in 2025–26 and increase further to 4 per cent in 2026–27.

Economic activity slowed somewhat in the final quarter of the 2025–26 fiscal year as disruptions to supply chains caused by the conflict in the Middle East affected the economy.

However, ADB expects the impact to remain limited. As political uncertainty eases following the national election in early 2026, consumer spending and investment could increase, supporting somewhat stronger economic growth.

Qingfeng Zhang, ADB’s country director for Bangladesh, said, “Bangladesh’s economy has begun to recover.

However, the global situation is undergoing various changes, while Bangladesh also faces several domestic constraints. Therefore, the recovery process is not yet free of risks.”

Qingfeng Zhang further said, “This is the right time to accelerate reforms in macroeconomic management, the financial sector, energy security and the business environment. These reforms will increase private investment and create decent employment, enabling the economy to stand on a stronger foundation. ADB will stand by Bangladesh in implementing the reforms.”

ADB has also offered some positive news on inflation. It said inflation could ease slightly to 8.7 per cent in the 2025–26 fiscal year. However, it could rise again to 9 per cent in 2026–27. Inflation stood at 10 per cent in the 2024–25 fiscal year.

ADB attributed the potential increase to the energy crisis, rising production and transport costs, and concerns over disruptions to shipping. In addition, the El Niño weather cycle could push up food prices. A gradual easing of monetary policy could also create additional pressure on inflation.

ADB also said Bangladesh’s current account deficit could double in the 2026–27 fiscal year. The deficit is expected to widen as imports outpace exports. According to ADB, the current account deficit stood at 0.3 per cent of GDP in 2025–26 and could rise to 0.6 per cent in 2026–27.

ADB expects remittance inflows to remain strong despite the ongoing tensions in the Middle East. Alongside higher remittance inflows, stronger foreign exchange reserves would make it easier to maintain stability in the country’s external transactions. To achieve this, Bangladesh needs adequate foreign currency inflows and an exchange rate aligned with market demand and supply. Prudent macroeconomic management is also necessary.

ADB expects the services and agriculture sectors to play a major role in driving economic growth in the next fiscal year. However, activity in the industrial and investment sectors could remain subdued.

High interest rates, difficulties in accessing credit, energy shortages and weaker overseas demand will continue to put pressure on industry and investment.

Some long-standing structural weaknesses in the economy will also hinder growth. Higher remittance inflows will boost consumer spending, making domestic consumption the main driver of economic growth.

However, persistently high inflation will continue to put pressure on people’s purchasing power.

ADB has also identified several risks to Bangladesh’s economy. These include a prolonged conflict in the Middle East, higher oil prices and the possibility of further disruptions to global shipping.

There are also risks of new restrictions on international trade, slower growth in Bangladesh’s major export markets, continued pressure on the taka against the US dollar and the emergence of new challenges in the banking sector.

At the same time, delays in revenue reforms, lower-than-expected development spending and climate-related disasters could hinder economic growth. As a result, inflation could remain elevated for some time.