B Mirror Report: Bangladesh’s economy is maintaining resilience amid easing inflation and a stable external sector, though fiscal strain and global uncertainties remain key concerns, according to the latest report by the General Economics Division (GED) of the Planning Commission.

The report said headline inflation slightly declined to 8.71 percent in March 2026 from 9.13 percent in February, mainly due to a drop in food prices. Food inflation fell to 8.24 percent, supported by improved domestic supply and the arrival of the boro harvest, while rice inflation turned negative at -2.20 percent.

However, non-food inflation stayed high at 9.09 percent, driven by continued cost pressures in housing, transport and utilities, largely due to exchange rate impacts and higher energy prices.

Although the gap between inflation and wage growth narrowed slightly with wage growth rising to 8.09 percent real incomes are still under pressure as wages continue to lag behind the overall cost of living.

The external sector remained strong, with foreign exchange reserves reaching US$34.12 billion in March, offering a buffer against global volatility. Remittance inflows were also robust at US$3.76 billion, reflecting steady migrant earnings despite ongoing geopolitical tensions, especially in the Middle East.

The exchange rate remained relatively stable at Tk 122.62 per US dollar, while a depreciation in the real effective exchange rate is expected to support export competitiveness. However, export growth slowed year-on-year in March due to weak global demand and rising energy costs.

On the fiscal side, public sector credit growth rose sharply to 29.61 percent in February 2026, mainly due to increased government borrowing for energy-related expenses. In contrast, private sector credit growth remained modest at 6.03 percent, indicating cautious investment sentiment.

Revenue collection also lagged behind targets, with the National Board of Revenue (NBR) achieving only 62.90 percent of its March goal, particularly due to weaker performance in VAT and income tax.

Meanwhile, implementation of the Annual Development Programme slowed, with spending reaching around Tk 75,607 crore during the July–March period, pointing to structural challenges and tighter fiscal management.

The GED report noted that strong remittance inflows and adequate reserves are supporting overall macroeconomic stability, but emphasized the need for cautious policy measures to address emerging risks.

It warned that high global energy prices and geopolitical tensions could reverse the recent easing of inflation and put pressure on the external sector, stressing the importance of boosting revenue collection and improving efficiency in public project implementation to sustain economic stability.