GDP growth seen 4.6pc in FY26: WB
Staff Reporter :
The World Bank has revised down its GDP growth projection for Bangladesh to 4.6 per cent for the current fiscal year 2025–26, slightly lower than its earlier estimate of 4.8 per cent made in October.
However, the lender expects growth to rebound to 6.1 per cent in the next fiscal year, supported by easing political uncertainty and improving economic conditions.
The outlook was published in the World Bank’s January edition of Global Economic Prospects, released in Washington on Tuesday.
According to the report, the upward revision for next year reflects a gradual moderation in inflation, rising consumer spending and the prospect of improved political stability.
The World Bank anticipates that national elections in early 2026 will help restore stability, enabling the incoming government to pursue structural reforms.
These measures are expected to strengthen the industrial sector and boost both investment and public spending.
Other international lenders have issued similar projections.
The Asian Development Bank, in its September 2025 outlook, forecast GDP growth of 5 per cent for FY26, while the International Monetary Fund projected 4.9 per cent growth in FY26 and 5.7 per cent in FY27.
In contrast, the interim government has set a higher growth target of 5.5 per cent for FY26, exceeding estimates by multilateral agencies.
World Bank Group Chief Economist Indermit Gill said the global economy continues to face sluggish growth due to high levels of public and private debt.
He stressed that emerging and developing economies need to prioritise investment-friendly reforms, trade liberalisation and human capital development to accelerate growth and job creation.
The report also pointed to several challenges facing Bangladesh in the current fiscal year.
Inflation remains above the target, and the central bank’s tight monetary stance to rein it in has reduced credit growth, constraining trade and investment.
The World Bank further cautioned that Bangladesh could face new risks in international trade amid counter-tariffs imposed by the United States.
Within South Asia, Bhutan is expected to record the highest growth at 7.3 per cent in FY26, followed by India at 6.5 per cent. Sri Lanka’s growth is projected at 3.5 per cent, Maldives at 3.9 per cent and Nepal at 2.1 per cent. No specific forecasts were provided for Pakistan and Afghanistan.
Meanwhile, provisional data from the Bangladesh Bureau of Statistics show that GDP growth stood at 4.5 per cent in the first quarter of FY26 (July–September), a sharp rise from 2.58 per cent in the corresponding period of the previous fiscal year.
On the global front, the World Bank noted that despite ongoing trade tensions and policy uncertainty, the world economy remains relatively stable.
Global growth is projected to slow to 2.6 per cent in 2026 before edging up to 2.7 per cent in 2027, though the institution warned that the current decade is shaping up to be the weakest period of growth since the 1960s.