IMF Lowers Bangladesh’s GDP Growth Forecast Again

The International Monetary Fund (IMF) has once again downgraded its forecast for Bangladesh’s economic growth.

In its latest World Economic Outlook report published Tuesday (October 14), the organization said that Bangladesh’s gross domestic product (GDP) growth for the fiscal year 2025–26 will be 4.9 percent — lower than its prior projections.

Previously, in July, the IMF had projected Bangladesh’s growth at 5.4 percent, and in April it had predicted 6.5 percent.

However, there is a positive sign: the IMF expects inflation to come somewhat under control. It said that average inflation this fiscal year could fall to 8.8 percent, and further decline to 5.5 percent in the following fiscal year.

The IMF’s forecast is broadly in line with recent estimates by the World Bank and the Asian Development Bank (ADB). In their latest reports, the World Bank projected Bangladesh’s growth at 4.8 percent, while the ADB estimated 5 percent.

In a recent report, the World Bank said that although Bangladesh’s economy is gradually recovering, vulnerabilities in the banking sector and political instability pose significant risks to growth. The institution also noted that delays in implementing economic reforms, global policy uncertainty, slow progress in lowering inflation, and energy supply constraints could challenge the country’s growth trajectory.

Meanwhile, in its September outlook, the ADB warned that new U.S. tariff policies, geopolitical tensions, high election-related expenditures, and structural weaknesses in the financial sector could hinder Bangladesh’s recovery momentum.

Nevertheless, both institutions expressed cautiously optimistic views regarding inflation reduction. According to the World Bank’s forecast, average inflation in 2025–26 could fall to 7.4 percent, while the ADB estimated it to be close to 8 percent.

Meanwhile, Bangladesh’s interim government has set a GDP growth target of 5.5 percent in its budget for the current fiscal year, which is slightly higher than the projections of international agencies.

Analysts say that unless monetary policy and revenue reforms are implemented rapidly, export diversification is encouraged, and the banking sector is restructured, growth may face greater stress.