Staff Reporter :
The World Bank (WB) has estimated that Bangladesh’s economy will grow by 4.1 per cent in the fiscal year 2024-25, a significant downgrade of 1.6 percentage points from previous projections. In its latest Global Economic Prospects report, the global lender warned of subdued investment and industrial activity in the near term, driven by heightened political uncertainty.
The forecasted GDP growth for FY25 would represent Bangladesh’s lowest growth rate since FY20, during the COVID-19 pandemic. However, the WB projects a recovery in FY26, with growth reaching 5.4 per cent, contingent on political stability, successful financial sector reforms, an improved business environment, and enhanced trade performance.
The report highlights persistently high inflation in Bangladesh, with the 12-month average rising to 10.34 per cent in 2024, compared to 9.48 per cent in 2023. Monetary policy has been further tightened in response to these inflationary pressures.
The WB predicts strong growth in South Asia, averaging 6.2 per cent in 2025-26, driven largely by India’s resilient economic activity. Growth in the region excluding India is projected at 4 per cent in 2025 and 4.3 per cent in 2026. However, the forecast for 2025 has been slightly downgraded due
to economic and policy uncertainties in Bangladesh.
In Pakistan, growth is expected to improve to 2.8 per cent in FY2024-25 and 3.2 per cent in FY25-26, reflecting a 0.5 percentage point upgrade from previous forecasts. Sri Lanka is expected to see a GDP growth of 3.5 per cent in 2025, an upward revision of one percentage point, driven by stronger-than-expected industrial activity.
The WB cautioned that slower growth in major trading partners, such as Europe and the USA, could weaken demand and dampen activity in economies with strong trade ties to these regions, including Bangladesh, Pakistan, and Sri Lanka.
Globally, the economy is projected to expand by 2.7 per cent annually in 2025 and 2026, maintaining the same pace as in 2024. Inflation and interest rates are expected to decline gradually. However, developing economies, which contribute 60 per cent of global growth, face the weakest long-term growth outlook since 2000, according to the WB report.