Dhaka: The Asian Development Bank (ADB) has projected that Bangladesh’s economic growth will gain momentum in the fiscal year 2026, with consumption continuing to be the main engine of this growth. This surge is expected to be driven by robust remittance inflows and spending related to the upcoming elections.
According to Bangladesh Sangbad Sangstha, the Asian Development Outlook (ADO) report for September 2025 highlights that the country’s investment climate might be subdued due to contractionary monetary and fiscal policies, coupled with increased investor caution. The report further indicates that global tariff hikes, including a significant 20 percent tariff on exports to the United States, along with intensified competition in the European Union, are likely to impact exports and overall growth. Exporters may face pressure to lower unit prices as a result of this increased competition.
On the supply side, the report anticipates an expansion in services, driven by enhanced household purchasing power. Agricultural growth is expected to stabilize, provided that weather conditions are favorable and government policy support remains effective. Conversely, industrial growth could decelerate as US tariffs continue to constrain economic activities.
The ADO forecasts that Bangladesh’s economy will grow by 4.0 percent in FY2025, with an increase to 5.0 percent in FY2026. This projection takes into account the resilience of garment exports, but also reflects tempered domestic demand amid political transitions, recurrent flooding, industrial labor disputes, and persistently high inflation. In the previous fiscal year, the economy expanded by 4.2 percent.
Hoe Yun Jeong, ADB Country Director for Bangladesh, emphasized the importance of enhancing the business environment to boost competitiveness and attract investment, as well as ensuring reliable energy supplies. He noted that the full impact of US tariffs on Bangladesh’s trade remains uncertain, and that vulnerabilities in the banking sector persist, which must be addressed to achieve higher economic performance.
The ADO report also highlights some downside risks to the FY2026 outlook, including trade uncertainty, weaknesses in the banking sector, and potential policy slippages, which could impede progress. Maintaining prudent macroeconomic policies and accelerating structural reforms are deemed critical to strengthening resilience.
Inflation is estimated to rise from 9.7 percent in FY2024 to 10.0 percent in FY2025, driven by limited competition in wholesale markets, inadequate market information, supply chain constraints, and the weakening of the Taka. The current account is expected to post a small surplus of 0.03 percent of GDP in FY2025, up from a deficit of 1.5 percent of GDP in FY2024, supported by a narrowing trade gap and robust remittance inflows.
ADB is a leading multilateral development bank committed to supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Since its founding in 1966, ADB has been owned by 69 members, 49 of which are from the region, working with members and partners to solve complex challenges through innovative financial tools and strategic partnerships.