Exports, remittances support Bangladesh’s economy as GDP growth dips: MCCI report

Business Report :

Economic activity in Bangladesh remained subdued during the July-September 2025 quarter as ongoing political uncertainty continued to weigh on domestic demand and investment, according to the Metropolitan Chamber of Commerce and Industry (MCCI). The chamber released its quarterly economic review on Monday, noting that while the overall slowdown persisted, some key sectors showed signs of improvement supported by easing inflation and a more stable foreign exchange market.
The report highlighted that GDP growth fell sharply to 3.35 percent in Q4, down from 4.86 percent in Q3 of FY25, reflecting weak domestic demand and broad-based moderation across the economy. Private-sector credit growth dropped to a historic low of 6.29 percent in September 2025, underlining declining business confidence amid tight monetary and fiscal policies introduced in August last year.
Despite the slowdown, certain sectors displayed resilience. Export earnings during July-September FY26 rose 5.25 percent to $12.27 billion, driven largely by knitwear and woven garments. This accounted for 22.31 percent of the government’s annual export target of $55 billion, although earnings in September alone fell by 5.10 percent. Remittance inflows also increased significantly, rising 15.95 percent to $7.59 billion in the quarter, with September alone reaching $2.69 billion, up 11.72 percent from a year earlier. The growth was supported by higher cash incentives, streamlined regulations, and strengthened formal transfer channels.
Inflation showed a minor rebound in September 2025, with general inflation rising to 8.36 percent from 8.29 percent in August. Food inflation edged up to 7.64 percent, while non-food inflation rose to 8.98 percent. Both remain lower than the same period in 2024, when food and non-food inflation stood at 10.40 percent and 9.50 percent, respectively. The MCCI expects inflation to ease gradually over the next three months, helping to stabilise household purchasing power.
Foreign exchange reserves have improved in recent months. Bangladesh Bank’s gross reserves reached $31.43 billion at the end of September 2025, up from $24.86 billion a year earlier. BPM6-compliant reserves stood at $26.60 billion, compared to $19.86 billion in September 2024. The MCCI noted, however, that reserves may decrease temporarily in November as Bangladesh settles $1.60 billion in import-payment obligations to Asian Clearing Union (ACU) member countries.
Looking ahead to the October-December 2025 quarter (Q2 FY26), the MCCI projected moderate growth across key indicators. Exports and imports are expected to rise, while remittance inflows may dip slightly in July before increasing in subsequent months. The report cautioned that political uncertainty and a volatile global economy could continue to affect economic performance, resulting in a mixed outlook for the next quarter.
“The economy is showing early signs of stabilisation, supported by exports, remittances, and foreign exchange reserves,” the MCCI said. “However, private investment remains weak, and business confidence is still constrained by political and policy uncertainties.”
Overall, the review suggests that while Bangladesh’s macroeconomic fundamentals are gradually stabilising, continued attention to investment climate, political stability, and support for export-oriented industries will be essential to sustain growth and achieve fiscal and trade targets in FY26.