The Asian Development Bank (ADB) has warned that Bangladesh’s GDP growth may slow down in the fiscal year 2025–26 due to the impact of newly imposed counter-tariffs by the United States, combined with sluggish performance in exports and the industrial sector.
In its July edition of the Asian Development Outlook report, the ADB revised its earlier projections, citing weaker external demand and emerging trade barriers.
While it did not provide a specific growth figure in this edition, the bank had earlier predicted a 5.1% GDP growth for Bangladesh in April 2025.
According to the report, the slowdown in industrial activities and declining export momentum are key concerns. It added that recent US tariff decisions are likely to further weigh on Bangladesh’s economic outlook.
US Tariffs Pose New Trade Challenges
In April 2025, the US administration announced a sharp increase in import tariffs on certain Bangladeshi goods, originally set at 37% and later revised slightly to 35%. These new duties are expected to take effect from August 1. Bangladesh is currently engaged in discussions with U.S. officials to reconsider or mitigate the impact of these tariffs.
Industry experts warn that higher tariffs will make Bangladeshi products, particularly ready-made garments, less competitive in the U.S. market — the country’s single largest export destination. Exporters fear this could lead to a significant drop in shipment volumes, dealing a blow to the country’s overall economic performance.
Inflation Shows Signs of Easing
Despite the external economic pressures, the ADB report noted a modest decline in inflation during the outgoing fiscal year. Global commodity price stability, coupled with tighter monetary and fiscal policies, helped ease inflationary pressure.
The ADB maintained its earlier forecast for average inflation in FY2025–26 at 8%, consistent with its April outlook.
According to data from the Bangladesh Bureau of Statistics (BBS), overall inflation in June 2025 dropped to 8.48%, the lowest since July 2022. This marks a continued decline following nearly three years of persistent high inflation, particularly in food prices.
Food inflation had peaked at 14.10% in July 2024 — the highest in 13 years — and remained above 10% for seven consecutive months. However, in recent months, it has gradually fallen below the 10% mark.
Outlook
While inflation is easing, the combination of external trade shocks and weakened industrial activity poses a serious challenge to sustaining economic momentum. The ADB’s updated outlook serves as a cautionary note for policymakers as Bangladesh navigates a complex global trade environment and prepares for long-term economic recovery.