The Asian Development Bank (ADB) has lowered Bangladesh’s economic growth forecast to 4% for the fiscal year 2025–26, down from its earlier projection of 4.7%, citing rising fuel prices and global supply chain disruptions linked to geopolitical tensions in the Middle East.
According to the latest Asian Development Outlook (ADO) April 2026, the Manila-based lender expects growth to recover to 4.7% in FY2026–27 as external pressures gradually ease.
This marks the third downward revision of Bangladesh’s GDP forecast by ADB. The institution had earlier projected 5.1% growth in April last year, later revising it to 5% in September and 4.7% in December.
Economic Pressures and Outlook
ADB noted that while consumption and investment are showing signs of recovery following reduced political uncertainty, temporary supply chain disruptions have affected economic activity in recent months.
Hoe Yun Jeong stated that Bangladesh is facing a challenging economic environment shaped by global uncertainties, structural constraints, and pressure on external and financial sectors.
Inflation is projected to remain high at around 9% in FY2025–26, before easing slightly to 8.5% in FY2026–27 as global shocks subside and domestic supply conditions improve.
Key Risks Ahead
ADB warned that risks remain heavily tilted to the downside, particularly if geopolitical tensions persist. Key concerns include:
- Rising oil and gas prices increasing inflationary pressure
- Higher subsidies widening the fiscal deficit
- Disruptions in global shipping routes and supply chains
- Weakening exports and remittances from Gulf economies
The report also highlighted continued pressure on the external sector, with higher import costs and freight rates straining the current account.
The current account deficit is expected to stand at 0.5% of GDP in FY2025–26 and widen slightly to 0.6% in FY2026–27 due to increased import demand and a broader trade gap.
Fragile Recovery
Despite signs of gradual recovery, ADB emphasized that Bangladesh remains vulnerable to external shocks, including prolonged geopolitical conflicts and climate-related risks.
The outlook suggests a slow and cautious recovery path, with macroeconomic stability dependent on easing global pressures and effective domestic policy responses.
