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Remittance inflows to Bangladesh are expected to remain resilient despite ongoing tensions in the Middle East, helping support external stability alongside higher foreign exchange reserves, according to the Asian Development Bank’s (ADB) latest report.
The Asian Development Outlook (ADO) September 2026, released Wednesday, said maintaining external stability would depend on adequate financial inflows, exchange rate flexibility and prudent macroeconomic management.
The report said the services and agriculture sectors are expected to support economic growth in FY2027.
“Bangladesh’s economy is beginning to recover, but the recovery remains vulnerable to external shocks and domestic constraints,” said ADB Country Director Qingfeng Zhang.
“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 the ADB was ready to support Bangladesh in translating these reforms into tangible results.
The report projected Bangladesh’s economy to grow by 3.7% in FY2026 and 4.0% in FY2027, compared with 3.5% in FY2025.
Economic activity slowed in the final quarter of FY2026 due to supply-chain disruptions linked to the Middle East conflict, although the impact is expected to remain limited. The improved growth outlook reflects stronger consumption and investment as political uncertainty eased following the general election earlier this year.
Inflation eased to an estimated 8.7% in FY2026 from 10.0% in FY2025 but is projected to rise to 9.0% in FY2027.
The ADB attributed the expected increase to energy shortages, high production and transport costs, potential shipping disruptions, delayed effects of El Niño on food prices and gradually easing monetary conditions.
The current account deficit is projected to widen to 0.6% of GDP in FY2027 from an estimated 0.3% in FY2026 as import growth outpaces exports.
Private consumption, supported by remittances, is expected to remain the main driver of growth, although elevated inflation will continue to erode household purchasing power.
The ADB warned that 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 could weaken growth and keep inflation elevated.