Bangladesh’s economic outlook cautiously optimistic: Govt

Deep structural weaknesses along with the political transition period could constrain economic momentum, the November 2025 issue of Economic Update and Outlook by the general economics division (GED) of Bangladesh’s Planning Commission said.

As Bangladesh heads towards general election in February next year, the GED’s economic outlook is cautiously optimistic.

Deep structural weaknesses along with the political transition period could constrain economic momentum, Bangladesh’s Planning Commission recently said.
The economy could regain pace if the election leads to a clear political direction and reforms are carried out.
Election-related spending and possible disruptions may add further pressure on inflation and the foreign exchange market.

The update said the economy could regain pace if the election produces a clear political direction and the next government decisively undertakes long-delayed reforms, particularly in improving the business climate, stabilising the banking system and ensuring fiscal and energy security.

Without such reforms, the recovery may be short-lived, it noted.

Election-related spending and possible disruptions during the transition are expected to add further pressure on inflation and the foreign exchange market, complicating stabilisation efforts, domestic media reports cited the GED document as saying.

Overall inflation dropped to 8.17 per cent in October from 10.87 per cent a year earlier. Non-food inflation inched up to 9.13 per cent.

While bank deposits grew at nearly double-digit rates through August and September, private-sector credit growth fell to just 6.29 per cent—the lowest in at least four years and well below the central bank’s target of 7.2 per cent for fiscal 2025-26.

High lending rates, cautious bank behaviour and political uncertainty have depressed investment appetite. Meanwhile, government borrowing from commercial banks surged by 24.45 per cent in September, raising concerns about crowding out private borrowers, said the document.

Revenue collection in October this year fell short of the target by Tk 8,324 crore, achieving only 77.37 per cent of the month’s goal. All major revenue streams—import duties, domestic VAT, and income tax—underperformed.

Foreign exchange reserves improved significantly, rising from $24.35 billion in November 2024 to $32.34 billion in October 2025.

Export earnings remained volatile. Exports peaked in July at $4.77 billion, but suffered sharp declines in April and June.

Fibre2Fashion News Desk (DS)