The Asian Development Bank (ADB) has lowered its economic growth forecast for Bangladesh to 4 per cent for fiscal year (FY) 2027 from its previous projection of 4.5 per cent, while forecasting 3.7 per cent growth for FY2026.
The revised forecast was made in ADB’s latest Asian Development Outlook (ADO) September 2026, released on Wednesday.
According to the report, economic activity slowed in the final quarter of FY2026 due to supply chain disruptions caused by the conflict in the Middle East, although the impact is expected to remain limited.
The bank said the improved growth outlook for FY2027 reflected stronger consumption and investment as political uncertainty eased following the general election in early 2026.
Inflation is estimated to have declined to 8.7 per cent in FY2026 from 10 per cent in FY2025. However, ADB projected inflation to rise slightly to 9 per cent in FY2027.
The report said inflation would remain elevated due to energy shortages, higher production and transport costs, possible shipping disruptions, delayed impacts of El Niño on food prices and a gradual easing of monetary conditions.
The current account deficit is projected to widen to 0.6 per cent of GDP in FY2027 from an estimated 0.3 per cent in FY2026, as import growth is expected to exceed export growth.
ADB said remittance inflows would remain resilient despite ongoing tensions in the Middle East.
Strong remittances and increased foreign exchange reserves are expected to support external stability, although maintaining stability will depend on sufficient financial inflows, exchange rate flexibility and prudent macroeconomic management.
The report said the services and agriculture sectors would support economic growth in FY2027.
However, industrial activity and investment are likely to remain constrained by high borrowing costs, limited access to credit, energy shortages, weak external demand and structural challenges.
Private consumption, supported by remittance inflows, is expected to remain the main growth driver, although high inflation will continue to weaken household purchasing power.
ADB identified several downside risks to the growth outlook.
These include a prolonged Middle East conflict, higher oil prices, further disruptions to global shipping, tighter trade restrictions, weaker growth in major export markets, continued exchange rate pressures, additional stress in the banking sector, delays in fiscal reforms, lower-than-expected development spending and climate-related shocks.
ADB Country Director for Bangladesh Qingfeng Zhang said the country’s economy was beginning to recover, but the recovery remained vulnerable to external shocks and domestic constraints.
“This is an important moment to accelerate reforms in macroeconomic management, the financial sector, energy security and the business environment. These reforms will be essential to unlock private investment, create quality jobs and place Bangladesh on a stronger, more inclusive and resilient growth path,” he said.
Zhang said ADB was ready to support Bangladesh in translating these reforms into tangible results for its people.
