After World Bank, ADB also slashes Bangladesh growth forecast to 4 per cent

Following in the footsteps of the World Bank, the Asian Development Bank (ADB) has lowered Bangladesh's GDP growth forecast to 4 per cent for the current 2025-26 fiscal year, citing global conflicts and internal economic strain.

In its Asian Development Outlook (April edition) released Friday, the Manila-based lender also warned that inflation is unlikely to cool down significantly, projecting it to remain at 9 per cent.

This is a downward revision from the ADB’s September outlook, which had initially pegged growth at 5 per cent and inflation at 8 per cent for the same period.

The ADB noted that while the projected growth rate is slightly higher than the previous year, several factors are weighing on the economy.

These include potential additional tariffs from the United States on export products.

The lender expressed concern that the US-Israel war on Iran could further hinder economic activity in the final quarter of the fiscal year by disrupting oil imports and shipping routes.

The ADB offered a more optimistic view for the 2026-27 fiscal year, predicting growth could rise to 4.7 per cent and inflation might drop to 8.5 per cent as political uncertainty eases following the national election.

The report highlighted that while GDP grew by 4.5 per cent in the first quarter of the current fiscal year -- up from 2.6 per cent in the same period last year -- the momentum has since faltered.

According to updated data from the Bangladesh Bureau of Statistics (BBS) released on Apr 6, growth plummeted to 3.03 per cent in the October-December quarter, down from 4.96 per cent in the July-September quarter.

During this period, the services sector led with a 4.45 per cent increase, followed by 3.68 per cent growth in agriculture, whereas the industrial sector lagged behind with a mere 1.27 per cent growth.

The downward trend follows a period of sustained economic difficulty.

Bangladesh's GDP growth in the 2024-25 fiscal year was finalised at 3.49 per cent, the lowest in five years, following a 4.22 per cent growth rate in 2023-24.

Economists and analysts suggest the economy has struggled to regain its footing after the dual shocks of the COVID-19 pandemic and the domestic political movements of 2024.

Bangladesh achieved a record 8.15 per cent growth in the 2018-19 fiscal year before the pandemic triggered a sharp decline.