Due to easing inflationary pressures and an increase in private consumption, Bangladesh’s real GDP growth is projected to reach 4.8% in the 2025–26 fiscal year, according to the World Bank.

This forecast was made in the Bangladesh Development Update, released on Tuesday (October 7).

The World Bank noted that despite severe disruptions in the first quarter of FY2025–26, economic activity picked up in the following quarters. Reduced external sector pressures, stable foreign reserves, and declining inflation have brought overall relief to the economy.

However, the organization also cautioned that challenges remain. It stated that: Private investment growth remains sluggish, Job creation is stagnant, and the banking sector is in a vulnerable state due to high levels of non-performing loans. Additionally, weak revenue collection is hindering the country’s economic recovery process.

Although investment is expected to improve compared to FY2024–25, growth is likely to remain slow, reflecting political uncertainty and persistent weaknesses in the banking sector. As imports normalize, the current account balance is expected to return to a slight deficit. With the improvement in economic activity and increased revenue, the fiscal deficit is projected to remain below 5% of GDP, according to the World Bank.