Both the World Bank and the International Monetary Fund have lowered their projections regarding the growth of Bangladesh鈥檚 gross domestic product for the outgoing financial year (2024-25) below 4 per cent.
The WB in its latest report 鈥楽outh Asia Development Update, Taxing Times鈥� on Wednesday said that growth was expected to slow down to 3.3 per cent in FY25 from its earlier projection of 4.1 per cent, made in October, 2024.
The IMF in its 鈥榃orld Economic Outlook鈥� released on the same day said that the GDP growth in Bangladesh would stand at 3.7 per cent from its earlier projection of 4.5 per cent, made in October.
The IMF also projected that inflation would remain at 9.9 per cent in FY25 before falling to 5.1 per cent in FY26.
Both the Washington-based multilateral lenders have released the updates in the ongoing joint meeting of the WB and the IMF in Washington with the IMF cutting global growth by 0.5 percentage points to 2.8 per cent amid the looming changes in global trade for the tariff issues.
Interim government finance adviser Salehuddin Ahmed is leading the Bangladesh side in the meeting to be concluded on April 26.
The interim government that assumed power on August 8 past year after the ouster of authoritarian Awami League government has revised down the GDP growth for FY25 to 5.2 per cent from 6.8 per cent projected by the Awami League government in its last budget in June.
The WB said that its downward projection on the country鈥檚 GDP growth also reflected the trade disruptions, the persistence of inflation, worsening bank health, governance challenges, and general uncertainty about the country鈥檚 political future, all of which would contribute to an expected decline in investment.
Consumer price inflation peaked at 11.7 per cent in July 2024 and remained elevated at 9.3 per cent in February 2025, said the WB, adding that the real GDP growth moderated to 4.2 per cent in FY24 from 5.8 per cent in FY23, primarily driven by a sharp decline in exports.
The WB noted that the Bangladesh Bank had been tightening monetary policy since May 2022, but its transmission, however, was impaired by financial system weaknesses featured by the non-performing loans, concentrated in state-owned banks, that have risen significantly in recent years, reaching 17 per cent of all loans in September.
The government is providing occasional liquidity support to some crisis-hit banks.
Meanwhile, the transition from a managed to a fully flexible exchange rate has been delayed, added the WB.
The WB said the real GDP was expected to gradually rise in the medium term to reach 4.9 per cent in FY26, however, driven by critical reforms.
Comparing with the WB, the IMF in its update projected 6.5 per cent GDP growth in Bangladesh for FY26.