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DHAKA: Bangladesh’s economic growth is expected to slow in the current fiscal year, while inflationary pressures may intensify, according to the International Monetary Fund’s (IMF) October 2026 projections.
The IMF forecasts that Bangladesh’s gross domestic product (GDP) will grow by 3.2% in fiscal year 2026–27, while average inflation could rise to 10.9%.
The projections could raise fresh concerns over the country’s economic recovery, people’s purchasing power and the investment climate.
The report was released on Tuesday morning during the ongoing joint annual meetings of the World Bank and the IMF. According to the IMF’s World Economic Outlook, Bangladesh’s economic growth is expected to reach 3.6% in fiscal year 2025–26, while average inflation for that year is projected at 8.7%.
This suggests that Bangladesh may face slower growth alongside rising inflationary pressures in FY27.
According to the Bangladesh Bureau of Statistics (BBS), the country’s overall inflation stood at 8.34% in September.
The IMF projects global economic growth at 3.1% in 2026, rising to 3.4% in 2027. Global average inflation is expected to stand at 4.7% in 2026 before declining to 4.1% in 2027.
Although the report does not provide an extensive analysis of Bangladesh, the IMF has warned in previous reports that slowing economic growth poses challenges for the economy.
Weak economic activity can constrain new investment and job creation. In particular, if private investment fails to increase as expected, industrial production, business expansion and income growth could suffer.
High inflation can also erode real incomes and purchasing power, placing the greatest burden on low- and middle-income households.
Meanwhile, the World Bank recently noted that Bangladesh’s economic growth is slowing, private investment and employment are weakening, and industrial production is being hampered by gas and electricity shortages. It also highlighted rising non-performing loans and capital shortfalls in the banking sector, alongside declining real incomes and purchasing power due to high inflation.
The World Bank further observed that despite substantial government spending on social protection, electricity and energy, and fertiliser subsidies, a significant share of the benefits does not reach poor households. While many affluent families receive benefits, numerous households among the poorest remain excluded from social protection programmes.
These findings were presented in the World Bank’s October 2026 “Bangladesh Development Update”, released on Tuesday under the title ‘Make Subsidies and Social Protection Work Better for the Poor’.
The report identifies restoring stability in the banking sector, ensuring energy security and good governance, and increasing tax revenue as key areas for reform.
It also recommends gradually reducing broad-based subsidies while expanding targeted assistance for poor and vulnerable people.
