The International Monetary Fund (IMF) has projected a mild economic recovery for Bangladesh in the upcoming fiscal year, forecasting 4.9% GDP growth in FY2025–26, up from 3.8% in the previous fiscal year.
The forecast was released on Tuesday (October 14) in Washington, D.C., in the IMF’s latest World Economic Outlook report, published on the sidelines of the World Bank–IMF Annual Meetings.
According to the IMF, the current slowdown in Bangladesh’s economy is expected to ease slightly next year, as the country begins to regain momentum. The Fund also projected global GDP growth at 3.2% for 2025.
The report noted that inflation in Bangladesh is expected to gradually decline to 8.8% in FY2025–26 and further ease to 5.5% in the following fiscal year.
However, the IMF cautioned that several challenges could hinder Bangladesh’s economic recovery — including weak implementation of structural reforms, stress in the banking sector, energy supply disruptions, and global trade uncertainties.
“Political and economic uncertainty, tight monetary policy, and new trade barriers have weakened Bangladesh’s growth prospects,” the IMF report said, adding that “rising stress in the banking sector and slow reform implementation are threatening macroeconomic stability.”
The IMF also warned that global policy uncertainty, trade disruptions, energy shortages, and sticky inflation remain significant risks to the country’s economic outlook.
Policy Recommendations
In its assessment, the IMF made several key policy recommendations for Bangladesh, including accelerating reform programmes to restore financial stability and achieve stronger, sustained growth.
The country has to improve revenue management and fiscal discipline, particularly through better budget control and cautious external borrowing, and enhance climate resilience and sustainable development, ensuring more inclusive and long-term economic progress.
The report noted that the latest global growth forecast has been revised slightly upward compared to the April 2025 projection, though it remains below pre-policy-change expectations.
Globally, growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026. Advanced economies are expected to grow by an average of 1.5%, while emerging and developing economies are forecast to expand by just over 4%.
Global inflation is also expected to continue moderating, though it will vary across regions. Inflation in the United States is projected to remain above target with some upward risks, while in other countries, price pressures are expected to be more contained.
The IMF noted that downside risks dominate the outlook. These include prolonged uncertainty, rising trade protectionism, labor market disruptions, and fiscal vulnerabilities. The Fund also warned that financial instability and loss of institutional credibility could threaten global economic stability.
Call for Credible Policies
Against this backdrop, the IMF urged policymakers worldwide to restore confidence by adopting transparent, credible, and sustainable policies. It also recommended strengthening fiscal buffers, preserving central bank independence, and intensifying structural reforms to sustain recovery.
The report’s second chapter highlights how improving policy frameworks has helped several countries achieve better outcomes, while the third chapter discusses the strategic use of industrial policies, emphasizing the need to weigh their costs and trade-offs carefully.