Bangladesh’s economic growth is set to recover to 4.0 per cent in FY26 and 4.7 per cent in FY27 from 3.5 per cent in FY25, driven by easing political uncertainty and a pickup in consumption and investment, the Asian Development Bank (ADB) said.
The forecast, published in the Asian Development Outlook (ADO) April 2026, signals a gradual rebound after recent slowdown linked to global shocks and domestic constraints.
The ADB said supply disruptions tied to Middle East conflict weighed on activity in the last quarter, but the impact is expected to ease, supporting recovery.
“Bangladesh is facing a difficult economic environment, shaped by global uncertainties, domestic structural constraints, and pressures on the external and financial sectors,” said ADB Country Director Hoe Yun Jeong.
“The new government’s reform agenda offers an opportunity to strengthen macroeconomic stability and restore private sector confidence,” he added.
Inflation is projected to remain high at 9.0 per cent in FY26 before easing to 8.5 per cent in FY27, reflecting elevated energy prices and supply pressures.
The current account deficit is expected at 0.5 per cent of GDP in FY26, widening slightly to 0.6 per cent in FY27 as import demand strengthens.
Remittance inflows are likely to remain resilient in the near term, despite ongoing geopolitical tensions.
On the demand side, growth will be supported by consumption and investment, aided by remittances, public spending and efforts to improve the business climate.
Services are expected to rebound, agriculture may normalise with favourable weather, and industrial activity is seen strengthening on export growth and easing supply constraints.
However, risks remain significant.
Prolonged conflict could disrupt energy markets and supply chains, pushing up oil and gas prices, raising inflation and limiting policy flexibility.
Higher energy costs could widen the fiscal deficit and strain external balances if exports and remittances weaken, while import costs rise.
The ADB also warned that climate-related shocks remain a persistent risk to the outlook.
