---

Bangladesh’s macroeconomic picture saw little notable change in the second quarter (October–December) of FY26, as weak exports, subdued private investment and tight monetary policy kept growth modest, according to the Metropolitan Chamber of Commerce and Industry, Dhaka.

In its latest quarterly review, the chamber said elevated inflation continued to weigh on business activity, prompting sustained credit tightening and limiting expansion. Although some indicators showed signs of stabilisation, the recovery remained fragile.

External sector mixed

Exports slipped 0.54 per cent to $24.40 billion during July–December of FY26, down from $24.53 billion a year earlier. The decline stemmed mainly from weaker knitwear and woven garment shipments, though apparel still accounted for more than 80 per cent of total export earnings. December exports alone fell 7.46 per cent year-on-year.

Imports moved in the opposite direction. Total import payments (C&F) rose 5.16 per cent to $29.13 billion in July–November, widening the trade deficit. November imports alone were up 7.83 per cent year-on-year.

Remittances, however, offered relief. Inflows reached $3.22 billion in December, up 22.19 per cent from a year earlier. Over July–December, remittances grew 18.05 per cent to $16.26 billion, supported by government incentives and greater use of formal banking channels.

Balance of payments data from the Bangladesh Bank showed net foreign direct investment inflows rising nearly 60 per cent year-on-year to $651 million in July–November. Still, overall FDI levels remain modest compared to peer economies.

Inflation above target

Inflationary pressure persisted. According to the Bangladesh Bureau of Statistics, point-to-point general inflation edged up to 8.49 per cent in December from 8.29 per cent in November. Food inflation stood at 7.71 per cent, while non-food inflation climbed to 9.13 per cent.

Though lower than the 10.89 per cent recorded in December 2024, inflation remains well above the government’s 6.5 per cent target for FY26.

Sectoral snapshot

Agriculture, employing about 44 per cent of the workforce, contributed 9.84 per cent to GDP in Q1 of FY26, down from 12.82 per cent in the previous quarter. The sector grew 2.30 per cent, slower than earlier growth.

Industry posted stronger momentum in Q1, expanding 6.97 per cent, with its share in GDP rising to 38.34 per cent. Manufacturing alone grew 6.17 per cent. Q2 industrial data is yet to be released.

Liquidity in the banking sector improved, with total liquid assets of scheduled banks increasing 6.78 per cent to Tk 6,260.46 billion at end-October. The interest rate spread narrowed slightly to 5.69 per cent in December. However, private sector credit growth remained subdued, reflecting cautious investment sentiment.

The country’s two stock exchanges — the Dhaka Stock Exchange and the Chittagong Stock Exchange — also saw declines in early February amid broad-based selling pressure.

Outlook for Q3

Looking ahead to January–March, the chamber expects mixed but gradually improving trends. Exports may rise to around $4.52 billion by March, while imports could increase moderately. Remittance inflows may dip briefly before rebounding, and foreign exchange reserves are likely to strengthen gradually.

Inflation is projected to rise slightly in January and February before easing in March.

Amid domestic political uncertainty and a challenging global environment, the chamber believes economic indicators will remain mixed in Q3, with cautious improvement in the external sector offering some support to overall stability.