Bangladesh Growth to Hit 6.5%, Inflation to Ease to 5.2 pc: IMF

The International Monetary Fund (IMF) has maintained its economic growth forecast for Bangladesh at 3.8% for the current fiscal year 2024-2025 (FY25), unchanged from its December 2023 projection. However, the global financial institution anticipates a significant rebound in the following fiscal year, projecting GDP growth to rise to 6.5% in FY26.

The figures were revealed in the IMF’s latest World Economic Outlook report, released on 22 April. The forecast suggests that while Bangladesh continues to grapple with persistent economic challenges, recovery may gather momentum over the medium term.

In terms of inflation, the IMF expects consumer prices to remain high in FY25, with an annual inflation rate of 10%. This marks a modest improvement from its previous estimate of 11% in December. Encouragingly, the IMF forecasts a sharp easing in inflationary pressure to 5.2% in FY26, signalling potential economic stabilisation.

The IMF’s forecasts come shortly after the Asian Development Bank (ADB) released its own projections in the Asian Development Outlook (ADO). The ADB estimated Bangladesh’s GDP growth at 3.9% for FY25—slightly higher than the IMF's figure—but forecasted a more cautious 5.1% growth for FY26, far below the IMF’s 6.5% outlook.

On inflation, the ADB painted a more concerning picture. It projected average inflation to rise further to 10.2% in FY25, before easing to 8% in FY26—significantly higher than the IMF’s forecast of 5.2%.

The ADB attributed the sustained inflationary pressure to structural inefficiencies in the economy, including limited competition in wholesale markets, inadequate market information, supply chain disruptions, and ongoing depreciation of the Bangladeshi taka. Regulatory shortcomings were also cited as a key barrier to market efficiency.

In December 2023, the Government of Bangladesh revised its own GDP growth target for FY25 downward to 5.25%, from the earlier estimate of 6.75%. The revision was prompted by multiple challenges, including a prolonged financial crisis, sluggish business activity, declining private investment, and political instability following the recent national elections.

The government continues to face mounting pressure to stabilise macroeconomic indicators amid rising public debt, a declining foreign currency reserve, and a strained balance of payments situation. These economic headwinds have contributed to the downward revisions by both international lenders and domestic policymakers.

The IMF’s relatively optimistic growth projection for FY26 is conditional upon improvements in macroeconomic management, policy reforms, and greater financial stability. The lender has repeatedly emphasised the importance of structural reforms, enhanced transparency, and improved governance to help Bangladesh navigate its current challenges and achieve sustainable growth.

Both the IMF and ADB projections underline the urgent need for effective fiscal discipline, efficient subsidy management, export diversification, and stronger social safety nets to shield the country’s vulnerable populations from persistent inflation and economic uncertainty.

As the government looks ahead to formulating the FY26 national budget, the latest forecasts from global financial institutions will likely weigh heavily on fiscal planning and policy priorities.

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