ADB: Bangladesh’s Growth Projected at 4% This Fiscal Year, to Rise to 5% in 2026

Staff Reporter | PNN:

The Asian Development Bank (ADB) has forecast that Bangladesh’s GDP growth will reach 4% by the end of the current fiscal year and is expected to increase to 5% in the 2026 fiscal year. However, the bank has warned that several challenges and risks remain along the path to growth.

According to ADB’s Asian Development Outlook (ADO) report released Tuesday (September 30), while the country’s garment export sector remains stable, political instability, declining domestic demand, recurrent flooding, industrial labor disputes, and high inflation are the main factors slowing growth.

The report notes that household consumption is expected to rise this fiscal year, likely driven by increased remittance inflows and election-related spending. ADB Country Director Ho Yun Jong said, “Future growth will depend on improving the business environment, attracting investment, and ensuring reliable energy supply.” He also noted that U.S. tariffs and weaknesses in the banking sector remain risks to growth.

For the 2026 fiscal year, ADB highlighted risks such as international trade uncertainties, banking sector weaknesses, and slow policy implementation. The report states that overall inflation was 9.7% in FY2023-24 and rose to 10% in the past fiscal year.

ADB expressed optimism that household consumption will be a major driver of growth, but slow investment and export pressures could impact overall performance. U.S. tariffs of 20% on Bangladeshi exports and increased competition in European markets pose challenges to the country’s export sector.

Founded in 1966, ADB works to promote inclusive and sustainable development in the Asia-Pacific region and currently has 69 member countries.