NN ONLINE:
After a volatile first half of FY25, Bangladesh’s economy rebounded strongly in the second half, buoyed by robust exports, record remittances, and rising foreign exchange reserves, according to the World Bank’s latest Bangladesh Development Update released on Tuesday.
The report argues that the country is poised for an ongoing growth trajectory in the medium term, but stresses that urgent reforms are needed to sustain momentum and create jobs, especially for young people and women. It projects GDP growth to climb from 4.0% in FY25 to 4.8% in FY26 and then to 6.3% in FY27.
External pressures eased in FY25 as a market-based exchange rate was adopted, foreign exchange reserves stabilized, the current account deficit narrowed, and exports strengthened. Inflation cooled thanks to tighter monetary policy, lower duties on essential food imports, and a favorable harvest. Yet the fiscal deficit widened due to weak tax collection and increased subsidies and interest payments.
The update also highlights rising social challenges. Poverty rose between 2023 and 2024, and labor force participation declined from 60.9% to 58.9%, with women bearing a disproportionate share of the impact. Of the 3 million additional working-age people outside the labor force, 2.4 million were women.
“The economy has shown resilience, but this cannot be taken for granted,” said Jean Pesme, World Bank Division Director for Bangladesh and Bhutan. He emphasized that bold reforms and faster implementation are essential to strengthen domestic revenue mobilization, address banking sector vulnerabilities, reduce energy subsidies, plan urbanization, and improve the investment climate to secure stronger growth and more jobs.
“To ensure a robust growth path and more and better jobs, Bangladesh needs bold reforms and faster execution to boost domestic revenue mobilization, tackle banking sector vulnerabilities, trim energy subsidies, plan urban development, and improve the investment climate,” he added.
