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The Asian Development Bank (ADB) has projected that Bangladesh’s economic growth will rise to 4% in the 2026-27 fiscal year, according to its latest Asian Development Outlook September 2026.
The ADB estimates that Bangladesh’s GDP growth stood at 3.5% in FY2024-25 and is expected to rise slightly to 3.7% in FY2025-26 before reaching 4% in FY2026-27.
The bank said economic activity slowed somewhat in the final quarter of FY2025-26 due to supply-chain disruptions caused by conflicts in the Middle East, but the impact is expected to remain limited. Political uncertainty is likely to ease following the national election in early 2026, supporting higher consumption and investment.
ADB Country Director for Bangladesh Chingfeng Zhang said the economy had begun to recover, but the process remained vulnerable to global developments and domestic constraints.
He called for faster reforms in macroeconomic management, the financial sector, energy security and the business environment, saying these would help boost private investment and create better employment opportunities.
Inflation to Remain Elevated
The ADB expects inflation to ease to 8.7% in FY2025-26 from 10% in FY2024-25, but rise again to 9% in FY2026-27.
It attributed the elevated inflation outlook to energy shortages, higher production and transportation costs, disruptions to shipping and possible food-price increases due to the El Niño weather pattern. A gradual easing of monetary policy could also create additional inflationary pressure.
Current Account Deficit to Double
Bangladesh’s current account deficit is projected to double to 0.6% of GDP in FY2026-27 from 0.3% in FY2025-26, mainly as imports are expected to outpace exports.
The ADB expects remittance inflows to remain strong despite ongoing tensions in the Middle East. Higher remittances and stronger foreign-exchange reserves could help maintain external stability, provided foreign-exchange flows remain adequate and the exchange rate adjusts to market demand and supply.
Services and Agriculture to Drive Growth
The services and agriculture sectors are expected to make significant contributions to growth in the next fiscal year. However, industry and investment may remain under pressure due to high interest rates, limited access to credit, energy shortages and weaker overseas demand.
Remittance-supported household consumption is expected to remain a major growth driver, although high inflation will continue to squeeze consumers’ purchasing power.
Middle East Conflict Poses Major Risk
The ADB identified a prolonged Middle East conflict, higher oil prices and further disruptions to global shipping as major risks to Bangladesh’s economy.
Other risks include new restrictions on international trade, slower growth in major export markets, continued pressure on the taka against the US dollar and renewed problems in the banking sector.
Delays in revenue reforms, lower-than-expected development spending and climate-related disasters could also constrain economic growth and keep inflation elevated.
