By News On Air Apr 10, 2025
In its latest Development Outlook report, the Asian Development Bank (ADB) has downgraded Bangladesh’s growth forecast to 3.9% for the current fiscal year 2024-25 – down from 5.1% in its September 2024 forecast and a steep drop from 6.6% projected in April 2024.
The report titled “Asian Development Outlook (ADO) April 2025,” released yesterday, also states that despite growth in Bangladesh’s exports in the garments sector, the slower growth forecast reflects weaker domestic demand amid political transition, risks of natural disasters, industrial unrest, and high inflation. Bangladesh’s economic growth was 4.2% in FY2024.
The ADB also warns that the 12-month average inflation in Bangladesh is expected to accelerate further to 10.2% in FY25 from 9.7% in FY24 due to stifling competition in wholesale markets, inadequate market information, supply chain constraints, and the depreciation of the taka. The current account deficit is anticipated to shrink from 1.4% of GDP in FY2024 to 0.9% of GDP in FY2025 as the trade deficit narrows and remittances rise, the report said.
“Slower growth in services owing to political unrest, financial sector vulnerability and reduced household purchasing power will tamp down GDP growth of Bangladesh in FY2025,” reads the outlook report.
ADB Country Director for Bangladesh Hoe Yun Jeong said: “Bangladesh should diversify its economy beyond the ready-made garments sector by fostering private sector development. Enhancing resilient infrastructure, improving energy security, strengthening financial sector governance, and attracting foreign investment are crucial to accelerating growth, creating jobs, and boosting competitiveness.”
Earlier in January, the World Bank projected that Bangladesh’s economic growth would slow to 4.1 per cent in the current fiscal year 2024-25. In October last year, the IMF also slashed its forecast for Bangladesh’s growth to 4.5 per cent.