STAR BUSINESS REPORT

For the second time, the Asian Development Bank (ADB) yesterday revised down its growth forecast for Bangladesh, citing sluggish investment ahead of the elections and slower growth in export earnings.

The Manila-based lender said GDP growth in the current fiscal year (FY2025-26) may reach 4.7 percent, down from its September forecast of 5 percent. In April, ADB had projected a 5.1 percent growth for the same year.

“The lower forecast reflects weaker-than-expected export performance and greater investment uncertainty due to the upcoming national elections in February,” the ADB said in its report “Economic Forecast for Asia and the Pacific: December”.

The agency noted that weaknesses in the financial sector also contributed to the downward revision.

Exports have been hit not only by subdued global demand but also by supply disruptions caused by a major strike at Chattogram Port in October, which handles more than 90 percent of Bangladesh’s imports and exports.

Exports grew only 0.62 percent in July-November period of FY26, compared to 11.76 percent during the same period last year, according to the Export Promotion Bureau.

Private sector credit growth slowed to 6.23 percent in October from 6.29 percent in September, marking the slowest pace in at least 20 years. This shows that businesses are holding back on new investment due to high borrowing costs, political uncertainty, and weak consumer demand.

The government has recently lowered the export growth target for FY26 to 9 percent from 10 percent and reduced the GDP growth target by 0.5 percentage points to 5 percent.

In October, the International Monetary Fund (IMF) projected that Bangladesh’s economy could grow by 4.9 percent in FY26, up from 3.8 percent in FY25, while the World Bank forecasted a 4.8 percent expansion.