Bangladesh’s economy is gradually moving toward stability, but a full recovery is still some distance away, according to the Policy Research Institute (PRI). The think tank noted that recent improvements are visible in a more stable exchange rate, a buildup of foreign exchange reserves, and some moderation in inflation. However, these gains have come alongside slower economic growth, weak investment, rising unemployment, and declining real wages.
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Presenting PRI’s latest assessment, principal economist Ashikur Rahman said policymakers should not assume a quick return to normalcy in 2026. He stressed that economic management must remain flexible and prepared for uncertainty, as both global and domestic shocks are becoming more frequent. According to PRI, global conflicts, trade disruptions, climate risks, and shifting economic alliances will continue to put pressure on Bangladesh’s economy, while internal political uncertainty and governance challenges will further complicate policymaking.
Data shared by PRI showed that GDP growth slowed to 3.4 percent in the fourth quarter of FY25, mainly due to weaker performance in industry and services. Investment growth remained low at 1.8 percent, reflecting high borrowing costs and political uncertainty. Private consumption and government spending also eased during this period.
On the positive side, the external sector has strengthened. Between July and October of FY26, Bangladesh recorded a $1.1 billion surplus in its balance of payments, supported by a stronger financial account. Remittance inflows increased by 20 percent during July to November of FY26, helping support foreign reserves and overall macroeconomic stability.
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Despite these improvements, PRI warned that sustained recovery will depend on political stability, credible elections, and deep structural reforms, particularly in the banking and fiscal sectors. Business leaders at the event echoed these concerns, pointing to high inflation, rising non-performing loans, and a low tax-to-GDP ratio as ongoing challenges that must be addressed to restore investor confidence and ensure long-term economic resilience.