The Asian Development Bank (ADB) has lowered its forecast for Bangladesh’s economic growth in fiscal year (FY) 2027 to 4.0 percent, down from the 4.5 percent projection made in its July outlook, while maintaining that the economy is expected to grow by 3.7 percent in FY2026.
The revised outlook was published in the Asian Development Outlook (ADO) September 2026 report, which noted that economic activity slowed during the final quarter of FY2026 due to supply chain disruptions linked to conflict in the Middle East. Despite those challenges, the ADB expects growth prospects to improve as political uncertainty eases following Bangladesh’s general election held earlier this year.
According to the report, stronger consumer spending and increased investment activity are expected to support economic growth in FY2027. However, the pace of expansion is likely to remain below previous expectations amid persistent structural and external challenges.
The bank expects the services and agriculture sectors to play a key role in supporting economic growth over the coming year. However, industrial output and investment are likely to remain constrained by high borrowing costs, limited access to credit, energy shortages, weaker external demand, and other structural challenges.
Private consumption is expected to remain the primary driver of growth, supported by remittance inflows. However, high inflation is likely to continue affecting household purchasing power and consumer spending patterns.
The ADB also highlighted several downside risks that could further weaken the economy. These include a prolonged conflict in the Middle East, higher global oil prices, disruptions to international shipping routes, tighter trade restrictions, weaker demand in key export markets, continued pressure on the exchange rate, stress within the banking sector, delays in fiscal reforms, lower-than-expected development spending, and climate-related shocks.
Economists say the revised forecast underscores the importance of maintaining macroeconomic stability while addressing long-term structural challenges to sustain growth and control inflation.
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