FinMin takes ‘Wait and See’ approach
Bangladesh’s economic outlook has deteriorated sharply, with the World Bank projecting GDP growth of just 3.4 per cent in FY27 – the weakest forecast among the South Asian economies included in its latest regional outlook.
Finance Minister Amir Khosru Mahmud Chowdhury, however, offered little immediate reaction to the downgrade, adopting a cautious “wait and see” stance.
Journalists asked the finance minister about the World Bank’s projection after a meeting with National Board of Revenue (NBR) officials at the NBR headquarters in Agargaon yesterday (6 October).
“Wait and see,” Khosru replied. He left the NBR without making any further comment on the World Bank’s forecast.
In its latest South Asia Economic Update, released on Tuesday, the World Bank cut its GDP growth forecast for Bangladesh in FY27 by 1.2 percentage points to 3.4 per cent. It also lowered its projection for FY26 by 0.5 percentage points to 3.4 per cent.
The latest forecasts point to a prolonged period of economic weakness, with several structural and near-term constraints weighing on Bangladesh’s growth prospects.
The World Bank said the weaker outlook reflects a more persistent drag from energy shortages, continued weaknesses in the banking sector, subdued credit growth and tighter fiscal constraints than previously expected.
The banking sector’s difficulties are likely to continue limiting the flow of credit to businesses and investment, while energy shortages could further constrain industrial and economic activity.
The outlook for exports is also subdued. The World Bank expects export growth to remain weak, with Bangladesh’s ready-made garment sector facing softer demand in the European Union in the short term and stronger competition over the longer term.
The combination of weak external demand and domestic constraints is expected to put further pressure on overall economic activity.
By contrast, the World Bank expects South Asia as a whole to maintain significantly stronger growth. Regional GDP growth is projected to rise to 6.9 per cent in 2026 before moderating slightly to 6.7 per cent in 2027.
Bangladesh’s 3.4 per cent growth forecast therefore places the country at the bottom of the South Asian economies covered in the latest regional outlook.
The World Bank’s regional classification in the latest report no longer includes Afghanistan and Pakistan under South Asia.
The sharp downward revision comes as Bangladesh continues to grapple with energy supply constraints, weaknesses in financial institutions, limited private-sector credit and fiscal pressures.
The latest World Bank assessment suggests these problems are proving more persistent than previously anticipated, increasing the risks to a sustained economic recovery.
For the government, the forecast presents a fresh challenge as it seeks to revive economic activity while addressing longstanding structural weaknesses.
The finance minister’s brief “wait and see” response indicates that the government is yet to publicly contest or endorse the World Bank’s latest assessment.
