Economic Update & Outlook - January: Country’s economic growth projected at 5pc in 2026 : GED
Business Report:
Bangladesh’s economy is projected to grow around 5 percent in 2026 reflecting a balance between moderate growth potential and persistent structural challenges, with inflation expected to ease gradually, according to the Economic Update & Outlook (January) published by the General Economics Division (GED) of the Bangladesh Planning Commission.
Sustaining growth will depend on stronger governance, policy consistency and increased investment in skills and technology to reduce over-reliance on the readymade garment sector, the report showed.
Earlier in December, the Mastercard Economics Institute (MEI) 2026 Outlook also projected Bangladesh’s economy is projected to grow around 5 percent in 2026, supported by easing inflation and strong remittance inflows that are expected to help households despite structural challenges.
The GED stressed that political stability, institutional reforms and effective use of technology are essential to shift the economy from a low-cost labour model to higher value-added activities.
It cautioned that uncertainty among economic elites and weaknesses in institutions remain major risks to long-term growth.
As progress towards the Sustainable Development Goals (SDGs) remains slow, the publication suggested that evidence-based policymaking, supported by village-level interventions, could help achieve sustainable development outcomes at the local level.
General inflation rose further in December 2025 to 8.49 per cent from 8.29 per cent in November, driven by accelerating food prices amid persistently high non-food inflation.
Food inflation increased from 7.36 per cent to 7.71 per cent during the period, while non-food inflation remained elevated at 9.13 per cent. Although rice inflation continued its downward trend across all categories, rice prices remained high and continued to exert significant pressure on overall food inflation.
The contribution of rice to food inflation fell from 40.28 per cent in November to 37.34 per cent in December. In contrast, the contribution of fish and dry fish rose sharply from 40.77 per cent to 43.34 per cent, making it the largest contributor to food inflation during the month.
Additionally, Bank deposits continued to grow in October and November, with year-on-year growth reaching 10.8 per cent in November. Public sector credit expanded rapidly, rising to 23.24 per cent in November, reflecting higher government borrowing, report showed.
Private sector credit growth remained modest at 6.58 per cent, indicating subdued private investment.
For FY2025-26, the revised revenue target was set at Tk 554,000 crore. In December 2025, revenue collection stood at Tk 36,191 crore, falling short of the revised monthly target by Tk 15,174 crore, although collections improved significantly compared to November and year-on-year.
The Revised Annual Development Programme (RADP) for FY2025-26 was finalised at Tk 200,000 crore, down from Tk 230,000 crore in the original ADP, reflecting fiscal pressures and implementation performance.
Foreign exchange reserves strengthened in the first half of FY2025-26, with gross reserves rising to USD 33.19 billion in December 2025. Remittance inflows also grew robustly, reaching USD 3.22 billion in December, supported by regulatory incentives and a more favourable exchange rate regime, the reports added.
The exchange rate remained broadly stable in December, with easing appreciation pressures observed in real effective exchange rate (REER) terms.