GDP growth to be 3.9 percent in current fiscal year

The Asian Development Bank (ADB) has revised its GDP growth forecast for Bangladesh to 3.9 percent for the current fiscal year 2024-25 due to persistent economic challenges. 

The bank expects the economy to recover in the next fiscal year. 

The revised forecast was based on a subdued outlook due to political uncertainty, supply disruptions, and tight monetary policy. 

The ADB cited Bangladesh's first-quarter GDP estimate, which showed slower growth due to political instability, natural hazards, worker protests, and high inflation.

"Agricultural growth is also expected to moderate following repeated floods," it said.

The industrial sector is projected to recover as moderately rising export demand boosts large-scale manufacturing output.

"On the demand side, consumption and investment will grow moderately, supported by strong remittance inflows but partly offset by contractionary monetary and fiscal policies and investor caution," the ADB added.

"However, with export growth also moderating, the contribution of net exports to growth will be negligible," it said.

The ADB projects GDP growth to recover to 5.1 percent in FY26, supported by stronger domestic demand.

"Easing inflation and rising remittances are likely to raise private consumption and investment," it said.

The multilateral agency expected that economies in developing Asia and the Pacific will raise by 4.9 percent in 2025, slightly down from 5 percent in 2024.

"Solid domestic demand and strong global appetite for semiconductors, driven by the artificial intelligence boom, are supporting growth, but tariffs and trade uncertainty will act as a headwind," it said.

The ADB noted that its growth forecasts were finalised before the April 2 announcement of new tariffs by the US administration. 

"Economies in developing Asia and the Pacific are supported by strong fundamentals, which are underpinning their resilience in this challenging global environment," said ADB Chief Economist Albert Park.

"Rising tariffs, uncertainties about US policy, and the possibility of escalating geopolitical tensions are significant challenges to the outlook. Asian economies should retain their commitment to open trade and investment, which have supported the region's growth and resilience."