A government report released today says Bangladesh’s economy is navigating a difficult period, marked by low reserves, weak investor sentiment, changing global buying patterns, and the spillover effects of trade disputes and geopolitical uncertainty.

The analysis—Bangladesh State of the Economy 2025, prepared by the General Economics Division of the Planning Commission—states that insufficient revenue collection continues to restrict public investment. Early estimates from the National Board of Revenue point to a larger-than-expected revenue shortfall.

Even with these constraints, the report notes that the second half of FY25 shows signs of improving economic activity.

According to the report, several forecasts indicate that the country is entering a phase of slower expansion due to ongoing political and economic challenges. Investment and industrial output remain weak, inflation is high, and global conditions are difficult—compounded by reciprocal tariff actions involving the United States.

International institutions, including the World Bank, estimate GDP growth of around 3.3% to 4.1%, with the possibility of a recovery to 5.1%–5.3% in FY2026.

Foreign direct investment continues to be very low and is expected to stay subdued for the near future, largely due to sluggish industrial activity and fragile investor confidence.

The GED identifies remittances, export performance, and manufacturing growth as the primary drivers of economic momentum for FY2025, with these sectors expected to further support FY2026.

The external sector has shown relative stability, supported by steady remittance inflows. Imports have stabilised—suggesting domestic demand is beginning to recover—while rising imports of capital machinery point to a modest revival in investment appetite. Foreign exchange reserves have remained slightly above the threshold of three months’ import coverage, which the report credits to careful macroeconomic management and ongoing structural improvements.

Persistent inflation, however, continues to erode purchasing power, with rural and low-income groups being hit the hardest.

The report argues that if Bangladesh manages to curb inflation, restore business confidence, and strengthen the financial sector, the country could see stronger economic performance in FY2025–26.

Many forecasts anticipate such a recovery, but the extent to which growth benefits ordinary people—through job creation, poverty reduction, and improved living standards—will depend heavily on government policy. Key priorities include effective inflation control, more flexible monetary measures, financial-sector reforms, stronger regulation, improved governance, and policies that ensure more inclusive development.