ADB projects Bangladesh’s GDP growth at 4.5 percent in FY2027

The Asian Development Bank (ADB) has lowered Bangladesh’s economic growth forecast, projecting gross domestic product (GDP) growth at 3.7 percent in fiscal year (FY)2026 and 4.5 percent in FY2027.

The revised projections were published in ADB’s Asian Development Outlook (ADO) July 2026, released on Thursday.

The latest forecast reflects weaker export performance, sluggish private investment, elevated energy costs, persistent inflation and a more challenging external environment.

"Bangladesh's economy continues to show resilience amid a difficult global and domestic environment, supported by strong remittance inflows and steady services activity," said Akira Matsunaga, Officer-in-Charge for ADB's Bangladesh Resident Mission. 

He said sustained reforms to strengthen macroeconomic stability, improve the investment climate, enhance financial sector governance, and address energy and infrastructure constraints would be critical to supporting a stronger and more inclusive recovery.

He said such reforms would also help attract greater private investment, create quality jobs and strengthen the country’s economic resilience.

According to the report, growth in FY2026 will be underpinned by robust remittance inflows, steady expansion of the services sector and targeted credit support for priority sectors despite a tight macro-financial environment.

The report said inflation is projected at 9.0 percent in FY2026 and is expected to ease gradually to 8.8 percent in FY2027 as economic conditions improve.

ADB said moderate inflation, simplified business regulations, improved governance, tax administration reforms and continued remittance incentives are expected to strengthen private consumption and investment in FY2027.

However, it noted that high inflation continues to erode household purchasing power and restrain private consumption, while weak exports and moderate import growth indicate subdued external demand and sluggish private investment.

On the supply side, export-oriented manufacturing is expected to remain under pressure from high energy prices, weak global demand and structural bottlenecks. Agriculture also faces risks from fertiliser shortages, although the services sector is likely to provide some support to growth through remittance-backed household spending.

Vulnerabilities in the banking sector, energy shortages and weak competitiveness are expected to keep economic expansion gradual, the report said.

ADB also warned of significant downside risks to the outlook.

It said any further escalation of the conflict in the Middle East could push up global energy and shipping costs, intensify external pressures, weaken growth through higher inflation and reduce remittance inflows.

The report added that higher global oil prices could widen Bangladesh’s import bill and increase fiscal pressure through larger energy subsidies, while higher tariffs, broader trade restrictions or weaker growth in major economies could further dampen export demand and prolong weakness in the manufacturing sector.

Persistent exchange rate pressures, tight external financing conditions and climate-related shocks also remain key risks to the country’s economic outlook.