BM Desk : The interim government has reversed the ambitious macro-economic targets set by the previous administration, now anticipating a 5.50 percent economic growth for the upcoming fiscal year.

It has also lowered the gross domestic product (GDP) growth target for the current fiscal year to 5.0 percent, down from the earlier target of 6.75 percent. The ousted Sheikh Hasina government had aimed for a bold 6.75 percent economic growth target for FY25, despite facing both internal and external challenges in the macro-economy.

Additionally, the interim government has established a more realistic medium-term GDP growth target of 6.0 percent for FY27.

In his national budget speech for FY26 on Monday, Finance Adviser Dr. Salehuddin Ahmed indicated that the GDP growth rate might be slightly reduced due to ongoing inflationary pressures.

“Provisional estimates suggest that GDP growth for FY25 could be around 3.97 percent. However, we anticipate that the final estimate will be higher. We also project that the growth rate will increase to 6.5 percent in the medium term by FY28,” he stated.

Meanwhile, the latest provisional data from the Bangladesh Bureau of Statistics (BBS) indicates that Bangladesh’s economy is expected to grow at 3.97 percent in the outgoing FY25, compared to the revised target of 5.0 percent.

According to the 2023 GDP estimates, Bangladesh ranks as the 33rd largest economy globally.

The FY26 budget has been designed to accelerate economic growth in preparation for the country’s graduation from least developed country (LDC) status, aiming to reach the upper-middle income category by creating new jobs, sustaining GDP growth, fostering local industries, increasing investment through protection and trade facilitation, developing export-oriented and heavy industrial enterprises, and promoting the Made in Bangladesh initiative.

Provisional estimates indicate that Bangladesh’s GDP size is Tk 55.527 trillion or $462 billion for the current fiscal year.

The government, in its medium-term macroeconomic framework, projects that the GDP will reach $487 billion in FY26, reflecting a growth of 5.50 percent.

At the same time, the anticipated GDP growth has been noted as the lowest in several years, which has raised alarms among economists and policymakers.

Provisional data from the BBS indicates modest growth in key sectors: agriculture at 1.79 percent, industry at 4.34 percent, and services at 4.51 percent for FY25.

While these statistics indicate some level of activity, they significantly lag behind the government’s original ambitious target of 6.75 percent and even the revised goal of 5.25 percent GDP growth for the current fiscal year.

This downward adjustment corresponds with previous forecasts from international organizations. The International Monetary Fund (IMF) has revised its prediction to 3.76 percent for FY25, the Asian Development Bank (ADB) to 3.9 percent, and the World Bank (WB) to 3.3 percent.

Despite the slower GDP growth rate, per capita income increased to $2,820 in FY25, up from $2,738 in the prior fiscal year, according to provisional data.