World Bank cuts Bangladesh growth forecast for FY26
The World Bank has lowered its economic growth forecast for Bangladesh for the 2025–26 fiscal year, citing persistent inflation, weaker exports and sluggish private investment as key headwinds for the economy.
In its latest Global Economic Prospects report released on Tuesday the lender projected Bangladesh’s economy will grow by 4.6 percent in FY26, a 0.3 percentage point cut from its June forecast. The revision reflects continued pressure on household consumption and business confidence amid tight financial conditions.
According to the Bangladesh Bureau of Statistics, gross domestic product expanded 4.5 percent in the first quarter of FY26, sharply higher than the 2.58 percent growth recorded in the same period a year earlier, supported mainly by industrial output and agricultural activity.
Economists said the rebound is encouraging but warned that sustaining momentum will be difficult without stronger investment and export performance. High borrowing costs, energy shortages and lingering policy uncertainty have continued to weigh on the private sector.
The Asian Development Bank last month also revised down its outlook for Bangladesh, cutting its FY26 growth estimate to 4.7 percent from 5 percent, pointing to election-related uncertainty and slower global demand for exports.
Looking ahead, the World Bank expects growth to accelerate to 6.1 percent in FY27 as inflation eases, private consumption improves and credit conditions gradually loosen. It said reduced political uncertainty after next month’s election and the rollout of structural reforms by a new government could lift industrial activity, public spending and investment.
The report also cut growth projections for Maldives, Bhutan and Nepal for 2026, while keeping India’s outlook unchanged and revising Sri Lanka’s forecast upward.
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