Bangladesh’s economy expanded by 4.86% in the January–March quarter of FY25 – the highest quarterly growth in 18 months – fuelled by strong rebounds in industry and services.
However, June’s Purchasing Managers’ Index (PMI) signals that the recent momentum may be losing steam.
The latest GDP data released by the Bangladesh Bureau of Statistics (BBS) shows that the economy grew by 3.81% in the first nine months of the fiscal year (July 2024–March 2025), reflecting a slow start following political unrest in the July–September period.
Industry and services drive third-quarter rebound
The January–March growth figure of 4.86% marks a solid improvement from the 4.62% recorded in the same period last year. Industrial output surged by 6.91%, up from 4.55%, while the services sector expanded by 5.88%, compared to 4.31% a year ago.
Agriculture, however, slowed to 2.42% growth, pointing to vulnerabilities from seasonal and climate factors.
PMI falls to 9-month low in June
In contrast to the upbeat GDP numbers, June’s PMI data paints a less optimistic picture. The composite index, compiled by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB), dropped to 53.1, down from 58.9 in May – the steepest decline in nearly a year.
While the reading still indicates expansion (any figure above 50 reflects growth), it highlights a slowdown in economic activity, particularly in the construction sector, which saw its first contraction in eight months.
Construction contracts; manufacturing, services slowed in June
The construction sector experienced a broad downturn in June, with contractions in new business, employment, and order backlogs. In manufacturing, employment and imports declined, although order backlogs returned to expansion after 10 months of contraction.
Agriculture maintained its positive trend but at a reduced rate, while the services sector, though still expanding, posted declines in new business and backlog volumes – a sign of cautious consumer spending and seasonal drag.
Outlook: Steady but uncertain
Chairman of Policy Exchange Bangladesh Dr M Masrur Reaz said the dip in PMI is largely due to seasonal factors such as Eid holidays and monsoon disruptions, as well as budget-related uncertainty.
He added, “The overall economy is still growing, but the key challenge now is to maintain this momentum, particularly in the face of inflation and shifting fiscal dynamics.”
With the end of FY25 approaching, all eyes are on whether Bangladesh can sustain its third-quarter recovery or if June’s signs of deceleration signal a broader slowdown in the coming months.