Bangladesh’s economy entered a phase of gradual stabilization in the final quarter of fiscal year 2025-26, as improving external-sector indicators, stronger remittance earnings, rising foreign exchange reserves and easing inflation provided some relief from prolonged macroeconomic pressures.
The latest quarterly review by the Metropolitan Chamber of Commerce and Industry (MCCI) said provisional data showed Bangladesh’s GDP growth reaching 4.14 percent in FY26, compared with 3.49 percent in the previous fiscal year.
The external sector remained the key pillar of stability. Remittance inflows reached $9.38 billion during April-June 2026, while the country’s gross foreign exchange reserves climbed to $37.58 billion at the end of June, up from $34.48 billion at the end of May.
Bangladesh’s overall balance of payments also recorded a significant improvement. The surplus nearly doubled to $6.61 billion in FY26 from $3.39 billion a year earlier. At the same time, the financial account surged to $7.89 billion from $3.60 billion, helping counterbalance the widening current account deficit.
The foreign exchange market also came under greater control during the year. Bangladesh Bank shifted from being a net seller to a major buyer of foreign currency, purchasing $6.43 billion on a net basis in FY26. In FY25, the central bank had instead sold a net $503.38 million. The shift was supported by stronger remittance inflows and relatively lower import-related foreign exchange demand.
Price pressures also moderated toward the end of the fiscal year. Overall inflation fell to 9.16 percent in June from 9.42 percent in May. Food inflation declined more noticeably, reaching 8.60 percent from 9.06 percent, while non-food inflation edged down to 9.61 percent from 9.71 percent.
The MCCI review noted that improved supplies of seasonal agricultural products contributed to the decline in food prices. On an annual average basis, inflation stood at 8.68 percent in FY26, significantly below the 10.03 percent recorded in FY25.
Export performance strengthened sharply in June, offering another indication of improving external demand. Merchandise exports rose 24.93 percent year-on-year to $4.19 billion during the month. However, the strong June performance was not enough to produce substantial annual growth, with total exports rising just 0.17 percent to $48.38 billion in FY26.
Imports recorded stronger growth, increasing 10.07 percent to $75.24 billion. According to the review, the increase reflected improved foreign exchange availability and greater imports of intermediate goods, particularly raw materials and inputs associated with the readymade garment industry.
Credit flows to productive sectors also improved. Industrial term-loan disbursements increased by 21.08 percent year-on-year to Tk 23,748 crore during January-March of FY26. Agricultural and non-farm rural credit disbursements rose 14.76 percent to Tk 42,834.16 crore over the full fiscal year.
Nevertheless, the economy continues to face considerable challenges. The MCCI warned that high inflation, sluggish private-sector investment, weak credit expansion, limited export growth, fiscal pressures and weaknesses in the banking sector could undermine the recovery if they remain unresolved.
The latest indicators therefore point to a tentative improvement rather than a broad-based economic recovery. While the external sector has become more resilient, stronger domestic investment, lower inflation and improved financial-sector stability will be necessary to translate the recent gains into sustainable economic growth.
The review suggests that maintaining reserve accumulation and foreign exchange stability, alongside policies aimed at reviving private investment and containing price pressures, will be crucial for Bangladesh to consolidate its macroeconomic recovery.
