Dhaka, Oct 07 (V7N) – Bangladesh’s GDP growth is expected to reach 4.8 percent in the current fiscal year 2025-26, up from 3.97 percent in the previous fiscal year, according to the World Bank’s Bangladesh Development Update, released on Tuesday.

The report cites the decline in inflation and a rise in personal consumption expenditure as the main drivers of growth. However, investment may remain subdued due to political uncertainty and weaknesses in the banking sector.

The World Bank notes that this growth trend could continue into the next fiscal year. Last week, the Asian Development Bank (ADB) projected a slightly higher GDP growth of 5 percent for Bangladesh in FY 2025-26.

Jean Pem, World Bank Division Director, highlighted the importance of preparing for Bangladesh’s LDC graduation, urging the government to actively engage the private sector to capitalize on the opportunities offered by this transition.

The report also stated that Bangladesh is likely to remain competitive under the new US tariff structure, even if global trade tensions persist. Strong export growth is expected, but normalization of imports could pose risks of a current account deficit.

The World Bank expects the budget deficit to remain below 5 percent of GDP due to ongoing reforms that are projected to boost revenue. Government debt is expected to reach 41.7 percent of GDP in the next fiscal year.

Key risks identified include political instability ahead of national elections, delays in reform implementation, and structural weaknesses in the banking sector.

END/SMA/AJ