ADB cuts Bangladesh’s FY2027 growth forecast to 4%

The Asian Development Bank (ADB) has cut its economic growth forecast for Bangladesh to 4 per cent for fiscal year 2027, down from its previous projection of 4.5 per cent in July, citing external shocks and persistent domestic constraints.

In its latest Asian Development Outlook released Wednesday (September 23), the ADB projected Bangladesh’s economy to grow 3.7 per cent in FY2026, saying economic activity slowed in the final quarter amid supply chain disruptions linked to the conflict in the Middle East.

The bank expects inflation to rise to 9 per cent in FY2027 from 8.7 per cent in FY2026, driven by energy shortages, higher production and transport costs, shipping disruptions, El Niño-related food price pressures and easing monetary conditions.

The current account deficit is projected to widen to 0.6 per cent of GDP in FY2027 from 0.3 per cent in FY2026 as import growth outpaces exports.

ADB identified a prolonged Middle East conflict, higher oil prices, stress in the banking sector and delays in fiscal reforms as key downside risks to the outlook.

“Bangladesh’s economy is beginning to recover, but the recovery remains vulnerable to external shocks and domestic constraints,” ADB Country Director Qingfeng Zhang said.

Zhang said the country should accelerate reforms in macroeconomic management, the financial sector, energy security and the business environment, reaffirming the ADB’s support for Bangladesh’s reform efforts.