Washington, April 9: The World Bank has projected a gradual recovery for Bangladesh’s economy following a recession, supported by improvements in domestic demand and stabilizing conditions.
According to the latest assessment by the World Bank, growth is expected to reach 3.9 percent in the fiscal year 2025-26. This figure reflects the impact of previous political unrest and external pressures on economic activities. The report indicates that the economy is recovering from the political instability that plagued the end of 2024, which adversely affected investment, exports, and overall economic momentum.
As conditions stabilize, private consumption is anticipated to remain a key driver of growth. However, uncertainties and limitations in the financial sector may slow the pace of investment, leading to a gradual recovery.
Export growth is also expected to contribute, but it will not be the primary driver. The ready-made garments sector, Bangladesh’s main export industry, is under pressure due to rising global tariffs and increasing competition in international markets.
Inflation remains a significant concern. The report highlights that currency depreciation, supply disruptions, and rising food prices have kept inflation at elevated levels, impacting purchasing power and economic recovery. To control inflation, monetary policy remains tight, with interest rates at high levels. The World Bank noted that this has limited loan growth and adversely affected private investment.
The banking sector is also under strain, with high levels of non-performing loans (NPLs) affecting lending capacity and investor confidence. External pressures persist, with high global energy prices and reliance on imports expected to strain the current account and fiscal balance, exacerbating broader economic challenges. Despite these obstacles, the World Bank stated that if reforms are implemented and political stability is maintained, strong growth is expected in the medium term.
Separate estimates from the World Bank suggest that Bangladesh’s growth could rise to approximately 4.6 percent in the fiscal year 2025-26 and reach around 6.1 percent in the fiscal year 2026-27, as inflation decreases and investment picks up.
Over the past decade, Bangladesh has been one of the fastest-growing economies in South Asia, primarily due to strong export performance and a substantial manufacturing base centered on textiles. However, recurring challenges, including vulnerabilities in the financial sector, external risks, and political uncertainty, continue to impact its growth trajectory, resulting in an uneven recovery.
My name is Himanshu Tiwari. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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