The Asian Development Bank (ADB) has revised down its GDP growth projection for Bangladesh to 3.9% for the fiscal year 2024–25, citing continued economic headwinds, though it anticipates a rebound in the following year.
In its April edition of the Asian Development Outlook, the Manila-based lender lowered its earlier forecast of 4.3%, attributing the downgrade to a subdued outlook driven by political instability, supply disruptions, and tight monetary conditions.
The report highlighted that Bangladesh’s economy expanded at a slower pace during the July–September quarter, according to preliminary estimates, as natural hazards, high inflation, and industrial unrest stemming from worker protests weighed on demand and output.
Nonetheless, growth is expected to regain momentum in the latter half of the fiscal year, buoyed by a recovery in manufacturing activity.
The Bangladesh Bureau of Statistics (BBS) on 30/03/2025 released its estimate for the October–December quarter, showing year-on-year GDP growth of 4.48%—marginally higher than the 4.47% recorded in the same quarter a year ago.
The ADB also referenced the Bangladesh Purchasing Managers’ Index, noting that despite a reading above 50—signalling expansion—slower growth in services due to political unrest, financial sector vulnerabilities, and diminished household purchasing power would continue to dampen overall GDP performance.
Agricultural growth is expected to moderate in the wake of repeated flooding, while disruptions at factories curbed industrial expansion in the first quarter. However, the ADB projects a recovery in large-scale manufacturing, supported by modestly rising export demand.
On the demand side, consumption and investment are forecast to grow moderately, bolstered by robust remittance inflows, though contractionary monetary and fiscal policies, as well as investor caution, will temper the pace of expansion.
Import growth is likely to remain subdued for the remainder of FY25 due to restrictive policies and deferred payments for energy and fertiliser imports. However, with export growth also set to ease, the contribution of net exports to GDP growth is expected to be negligible.
Looking ahead, the ADB expects GDP growth to recover to 5.1% in FY26, supported by stronger domestic demand, easing inflation, and rising remittance inflows, which are projected to bolster both private consumption and investment.
The bank forecasts that developing economies in Asia and the Pacific will grow by 4.9% in 2025, slightly down from 5% in 2024, underpinned by solid domestic demand and robust global demand for semiconductors—fuelled by the artificial intelligence boom. However, the report warned that tariffs and global trade uncertainty will weigh on prospects.
The ADB clarified that its forecasts were finalised prior to the United States’ 02/04/2025 announcement of new tariffs. Accordingly, its baseline projections only reflect previously implemented tariffs.
However, the latest edition of the Outlook includes an analysis of how further increases in tariffs could affect economic performance across Asia and the Pacific.
While regional economies remain broadly resilient, the report cautioned that rapid or significant shifts in US trade or economic policy could pose downside risks. Higher tariffs, increased policy uncertainty, and retaliatory measures may undermine trade, investment, and growth.
“Economies in developing Asia and the Pacific are supported by strong fundamentals, which are underpinning their resilience in this challenging global environment,” said ADB Chief Economist Albert Park.
“Rising tariffs, uncertainties about US policy, and the possibility of escalating geopolitical tensions are significant challenges to the outlook. Asian economies should retain their commitment to open trade and investment, which have supported the region’s growth and resilience.”
