Written by The Banking Post
Bangladesh’s economy is projected to grow by 5 percent in FY2026, up from an estimated 4 percent in FY2025, according to the Asian Development Bank’s (ADB) latest Asian Development Outlook.
The Manila-based lender said growth will be driven mainly by strong remittance inflows and election-related spending, though domestic demand remains subdued due to political transition, recurrent flooding, labour unrest, and stubbornly high inflation. The economy grew by 4.2 percent in FY2024.
ADB warned that risks remain on the horizon. A 20 percent tariff on Bangladeshi exports to the US and stiffer competition in the EU could erode trade performance, while weaknesses in the banking sector and potential policy slippages may hinder investment.
“Future growth will depend on improving the business environment to boost competitiveness, attract investment, and ensure reliable energy supplies,” said ADB’s Bangladesh Country Director Hoe Yun Jeong.
Inflation is expected to climb to 10 percent in FY2025 from 9.7 percent a year earlier, driven by supply chain disruptions, market inefficiencies, and a weaker taka.
On the supply side, services are expected to expand on the back of stronger household purchasing power, agriculture is likely to stabilise with favourable weather, while industry may slow under tariff pressures.
Bangladesh’s current account is forecast to post a small surplus in FY2025, supported by narrowing trade gaps and resilient remittance inflows.
