Zakir Hossain from Dhaka
Bangladesh’s economy continues to face fiscal pressure, high inflation, low reserves, and weak investor confidence, according to a government report, Bangladesh State of the Economy 2025, released by the General Economics Division of the Planning Commission on Monday.
The report warns that limited fiscal space amid low revenue mobilisation is hampering public investment. “A provisional estimate from the NBR suggests a shortfall in the revenue target by a wider margin,” it said.
Despite challenges, the last six months of FY25 show “promises for rebounding economic activity.” The report cites subdued investment, industrial slowdown, and global headwinds, including US reciprocal tariff measures, as key concerns. International agencies like the World Bank project 3.3–4.1% growth this year, with a rebound to 5.1–5.3% expected in FY26.
It notes that FDI remains critically low, though remittance flows and manufacturing growth are expected to support recovery. The external sector has shown “notable stability,” with reserves remaining above the threshold of three months’ import coverage, aided by “prudent macroeconomic management.”
However, persistent high inflation continues to erode real incomes, particularly for low-income and rural households. “If Bangladesh can keep inflation under control, rebuild investor confidence, and stabilise the financial sector, there is potential for stronger growth in FY2025–26,” the report said, adding that the quality of growth will depend on improved governance, better regulation, inclusive reforms, and targeted monetary policy.