The Asian Development Bank (ADB) has slashed its economic growth forecast for Bangladesh to 5.1 per cent for FY25, citing political unrest, supply chain disruptions, and recent severe floods in parts of the country.
This marks a significant downgrade from the 6.6 percent growth the Manila-based lender had projected earlier in April this year. The latest forecast published in its “Asian Development Outlook (ADO) September 2024” report published on Wednesday.
For FY25, the now fallen Hasina regime had set GDP growth target to 6.8 per cent, a recovery from 5.82 per cent estimated by the Bangladesh Bureau of Statistics (BBS) for FY24.
In its latest ADO, ADB said the political turmoil taking place in July and August this year, marked by mass unrest, along with the floods, has severely impacted Bangladesh’s Gross Domestic Product (GDP), disrupting the production of goods and services across the country.
In its latest report, the ADB warned that fiscal and monetary policies are expected to remain tight, which could further reduce consumption demand and keep inflation high.
The bank cautioned that its forecast carries significant uncertainty, with downside risks overshadowing the macroeconomic outlook.
The ADB identified these risks as being primarily driven by ongoing political instability, a fragile law-and-order situation, and vulnerabilities within the country’s financial sector.
The ADB’s revised forecast is lower than the World Bank’s June projection, which estimated Bangladesh’s economic growth at 5.7 per cent for FY25.
According to the latest ADO, South Asia’s inflation projection is unchanged in 2024, but has been revised upward in 2025 due to supply disruptions in Bangladesh.
“Bangladesh, inflation rose to 9.7 per cent in FY2024, driven primarily by high food prices. The FY25 forecast is up 3.1 percentage points from April estimates, to 10.1 per cent due to supply chain disruptions and rising import costs due to currency depreciation,” it adds.
