Written by The Banking Post
Bangladesh’s economy is projected to grow 4.5% in fiscal year 2025-26, slightly lower than earlier estimates, as weaker export performance and persistent inflation weigh on momentum, according to Oxford Economics.
The global forecasting firm downgraded its growth forecast from 4.7%, citing slower second-quarter activity and falling goods exports to key markets. Exports to the United States and Germany declined 4.1% and 12.8% year-on-year, respectively, in the quarter ending December.
Despite the downgrade, growth would improve from the 3.49% recorded in FY2024-25, when tight monetary policy, restrained public spending, and political unrest dampened activity. The Bangladesh Bureau of Statistics said GDP reached $456 billion last fiscal year.
Inflation remains elevated at 8.6% in January, while policy rates remain tight as Bangladesh Bank seeks to curb price pressures and rebuild foreign-exchange reserves, now around $30 billion, up from $17 billion in 2024.
Oxford Economics expects growth to accelerate to 5.7% in FY2026-27, supported by political stability and reform continuity. However, private investment may stay subdued due to restrictive monetary conditions, and consumer spending faces pressure as wage growth lags inflation.
Economists warn that external risks, including trade preference erosion following Bangladesh’s LDC graduation, could cloud the medium-term outlook.
