B Mirror Desk : The General Economics Division (GED) of the Planning Commission has forecasted a steady economic recovery for Bangladesh, supported by positive trends in exports, remittances, a stable exchange rate, and reduced inflationary pressures.
In its April 2025 Economic Update and Outlook, GED observed that enhanced investor confidence—particularly following the successful Bangladesh Investment Summit 2025—coupled with a moderately tight yet accommodating monetary policy, is anticipated to further promote industrial growth, according to BSS.
The GED outlook stated, ‘Economic recovery is expected to be strengthened by a favorable external sector characterized by positive growth in exports and remittances, a stable exchange rate, and declining inflationary pressures.’ The report underscored the necessity of lowering commercial lending interest rates to encourage investment. GED highlighted the critical need to address non-performing loans and enhance banking sector efficiency to improve credit access.
It also emphasized the government’s ongoing initiatives for fiscal consolidation, which are projected to fortify fiscal accounts. ‘Improving efficiency in the selection of development projects—prioritizing sustainability—will enhance the prospects for quality growth,’ the report noted. While inflation is projected to remain stable between 8.0% and 9.0% during April and May 2025, it continues to be a concern.
Food inflation, which spiked to 10.65% in FY2023-24, decreased to 8.93% in March 2025 following an increase in the supply of winter vegetables. Key contributors to overall inflation in March included rice (14.62%), fish (11.58%), and vegetables (6.08%). Notably, the prices of brinjal (17.12%), medium rice (16.73%), and hilsa (11.37%) drove up food costs-partly due to seasonal demand during Ramadan and the Bengali New Year.
Rural regions are still experiencing elevated inflation rates, underscoring the necessity for improved management of food supply chains. In March 2025, Bangladesh’s external sector demonstrated resilience, with remittances hitting a record high of $3.29 billion, a 65% increase from the previous year, fueled by Eid-related transfers and a transition to formal remittance channels due to stricter regulations. From July 2024 to March 2025, total remittances rose to $21.77 billion, up from $16.69 billion during the same timeframe last year. Foreign exchange reserves also increased, now approximately $25.62 billion. Exports experienced an 11.44% year-on-year growth, reaching $4.25 billion, primarily driven by the ready-made garment industry. Bangladesh’s swift response to Trump’s reciprocal tariff has been effective, providing relief to exporters. The country’s diplomatic efforts with the U.S. regarding these tariffs have led to a temporary easing, with an agreement to boost imports of American agricultural goods. However, despite these external improvements, investment activity remains low. In February 2025, deposit growth decelerated to 7.88%, while private sector credit growth was only 7.15%, among the lowest in recent years.
Contributing factors include high lending rates, political and economic instability, and weakened bank health, with around 10 banks experiencing reduced lending capacity due to irregularities. Additionally, government borrowing from commercial banks surged by 60% year-on-year, further constraining private sector credit availability. In March, the Taka fluctuated within a narrow range of Tk 121.5755-121.9542 per U.S. dollar, indicating relative stability in the exchange rate despite increasing demand for letters of credit and foreign currency.
Remittances played a crucial role in stabilizing the currency, as the enhanced foreign reserve position positively influenced the external sector’s outlook. Following a sluggish first quarter where GDP increased by only 1.96% due to industrial decline and agricultural disruptions from floods, the second quarter of FY2025 experienced a recovery, with growth reaching 4.48%.
This growth was primarily fueled by the industrial sector, which expanded by 7.1% in Q2, driven by manufacturing (8.49%), mining and quarrying (8.01%), and wholesale and retail trade (6.63%). Although the economic recovery is progressing, GED emphasizes the necessity for expedited reforms, investment encouragement, and structural enhancements to maintain this positive trajectory.
