The Asian Development Bank (ADB) has significantly lowered its economic growth forecast for Bangladesh in the fiscal year 2024–25, projecting gross domestic product (GDP) to expand by just 3.9 percent.

This downward revision from an earlier estimate of 5.1 percent reflects persistent challenges on both domestic and international fronts, including political unrest, inflationary pressure, and subdued global demand.

The ADB’s latest Asian Development Outlook, published on Tuesday, outlines a sober economic assessment for Bangladesh. The 3.9 percent growth forecast is the weakest since the COVID-19 pandemic, marking a setback in the country’s post-pandemic recovery trajectory. In the first quarter of the fiscal year, GDP growth stood at just 1.8 percent.

The report identifies a combination of domestic political instability, labor protests, natural hazards, and persistently high inflation as central factors behind the economic slowdown. Additionally, consumers’ purchasing power remains suppressed, dampening domestic demand across sectors.

The report highlights that the current projection does not incorporate the impact of new tariffs announced by the United States on April 2, which could further weigh on exports. The baseline figures reflect only those trade measures that were in effect before that announcement.
Inflation remains one of the most pressing economic concerns. The ADB forecasts that inflation will average 10.2 percent in FY2025, an increase from 9.7 percent the previous year.

The central bank’s response has involved tightening monetary policy. The ADB notes that the Bangladesh Bank has raised the repo rate and adopted a more market-oriented approach to interest rate setting to control inflation and stabilize the foreign exchange market.

The external sector offers a mix of challenges and opportunities. The current account deficit is expected to narrow to 0.9 percent of GDP in FY2025. This improvement is primarily attributed to a partial recovery in ready-made garment exports and continued strength in remittance inflows.

However, the ADB warns that the export sector remains vulnerable to new tariffs, particularly from major markets like the United States, and potential economic slowdowns in the European Union and North America.