Asian Development Bank Forecasts Higher Inflation in Bangladesh for FY2025
Bangladesh’s economy is anticipated to grow by 3.9% in FY2025, advancing further to 5.1% in FY2026
The Asian Development Bank (ADB), in its report titled Asian Development Outlook (ADO) April 2025, projected that Bangladesh’s 12-month average inflation will rise further to 10.2% in FY25, up from 9.7% in FY24 and 9.0% in FY23. This continued upward trend is attributed to supply-side disruptions and increased import costs driven by the depreciation of the Taka.
The report also estimates that Bangladesh’s gross domestic product (GDP) will grow by 3.9% in FY25, before improving to 5.1% in FY26. While the garment export sector has shown positive growth, the overall slower GDP projection reflects subdued domestic demand amid ongoing political transitions, the risk of natural disasters, industrial unrest, and persistently high inflation. The country recorded an economic growth rate of 4.2% in FY2024.
Commenting on the outlook, ADB Country Director for Bangladesh, Hoe Yun Jeong, stated that despite both external and internal challenges, Bangladesh’s economy continues to show resilience. This resilience, he added, can be strengthened through the implementation of key structural reforms.
He emphasized the need for Bangladesh to diversify its economic base beyond the ready-made garments industry by promoting private sector growth. He also highlighted the importance of building resilient infrastructure, enhancing energy security, reinforcing financial sector governance, and attracting foreign investment as critical measures to drive sustainable growth, create employment opportunities, and enhance competitiveness.
Furthermore, the current account deficit is expected to reduce from 1.4% of GDP in FY24 to 0.9% in FY25, supported by a narrowing trade deficit and rising remittance inflows.
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