The World Bank (WB) has forecasted a 4.1% economic growth rate for Bangladesh in the current fiscal year (FY 2024-25), citing subdued investment and industrial activity amid heightened political uncertainty.

This projection, slightly higher than the WB’s October estimate of 4%, reflects persistent challenges, including inflation, energy shortages, and import restrictions that have dampened industrial output and household purchasing power.

The WB report predicts growth will rebound to 5.4% in FY26, contingent on political stability, successful financial reforms, and improved trade and business conditions. Easing inflation is expected to support private consumption, though the 12-month average inflation rose to 10.34% in 2024, up from 9.48% in the prior year.

Bangladesh’s growth projection for FY25 is higher than the International Monetary Fund’s (IMF) estimate of 3.8%, which factored in output losses from the July 2024 political unrest, floods, and tighter fiscal policies. However, both forecasts indicate that FY25 growth could be the lowest since the COVID-19 pandemic in FY20.

The Bangladesh Bureau of Statistics reported GDP growth of 1.81% for the July-September quarter of FY25, the lowest since the second quarter of FY21. With inflation remaining elevated and economic activity dampened by mid-2024 political turmoil, the WB revised its FY24 growth estimate to 5%, down by 0.6 percentage points.