The International Monetary Fund (IMF) has forecasted a 6.6% GDP growth for Bangladesh for the fiscal year 2024-25 (FY25), closely aligning with the Bangladesh government’s target of 6.75% for the same period.

Addressing reporters, IMF Mission Chief for Bangladesh Chris Papageorgiou highlighted that the country’s economy is grappling with numerous challenges, including external shocks and global uncertainties, which have intensified macroeconomic vulnerabilities.

“Over the past year and a half, growth momentum has slowed due to higher inflation eroding consumer purchasing power, tighter fiscal and monetary policies aimed at controlling inflation, and foreign exchange shortages along with import restrictions further limiting aggregate demand. Despite these issues, exports—crucial to Bangladesh’s economy—have shown resilience,” Papageorgiou stated.

He emphasized that the near-term growth trajectory depends on resolving issues like heightened inflation and external imbalances promptly. This resolution would allow a shift to a more accommodative policy stance.

According to the IMF’s projections, Bangladesh’s economy may grow at a slower rate of 5.4% in FY24 compared to the previous year. However, stronger growth of 6.6% is anticipated for FY25 as the domestic macroeconomic outlook and external position gradually stabilize.

In the longer term, maintaining high-paced growth will depend significantly on the consistent implementation of structural reforms aimed at improving the business climate. Key areas of the reform agenda should include expanding and diversifying foreign trade, attracting foreign direct investment, improving governance, strengthening the financial sector, mobilizing fiscal revenue, and developing infrastructure.

Papageorgiou acknowledged Bangladesh’s impressive economic growth and social development over the past decade, which has led to steady progress in reducing poverty and achieving various Sustainable Development Goal (SDG) indicators.

To successfully transition from Least Developed Country (LDC) status and achieve upper-middle-income status, he stressed the importance of building on these successes and addressing structural issues to accelerate growth, attract private investment, enhance productivity, and build climate resilience.

Given this context, the short-term priority should be creating an environment conducive to further expanding trade and attracting foreign direct investment. This includes reducing high non-tariff barriers, improving trade-related physical infrastructure, and removing regulatory obstacles.

Papageorgiou noted that since Bangladesh’s trade profile has remained relatively unchanged over the past decades, medium- and long-term priorities should focus on diversifying the concentrated export and product portfolios. While the ready-made garment industry has significantly contributed to the country’s economic growth, it is essential to diversify exports beyond this sector. The authorities should explore new growth drivers, such as initiatives supporting a green transition, to achieve this goal.