World Bank lowers growth forecast for Bangladesh to 3.3% in FY25
The World Bank has revised down Bangladesh’s projected economic growth for the current fiscal year (FY25) to 3.3 percent, a decrease from its earlier estimate of 4 percent. The downgrade comes amid ongoing political instability and weak investment activity, the institution stated.
This latest projection was released just a day after the International Monetary Fund (IMF) forecasted a slightly higher GDP growth rate of 3.76 percent for the fiscal year ending in June. Meanwhile, the Asian Development Bank had earlier anticipated a 3.9 percent growth rate.
In its newly published South Asia Development Update, the World Bank attributed the economic slowdown primarily to significant declines in both private and public investments during the first three quarters of the fiscal year.
The report pointed to political unrest, curfews, and internet blackouts as major disruptions to economic operations in the first quarter, dampening overall business activity.
Private investment is expected to remain sluggish for the rest of the year, hindered by global trade challenges, high costs of inputs and borrowing, and uncertainty in domestic policy, the World Bank noted. Additionally, the report highlighted a notable slowdown in private sector credit growth—just 7.3 percent year-on-year in December 2024—the weakest rate in 30 years.
Public investment is also forecasted to decline due to reduced capital spending. However, the World Bank acknowledged that some stabilization in the external sector and a narrowing current account deficit have provided limited economic support.
Regionally, the World Bank expects South Asia’s GDP growth to ease to 5.8 percent in 2025, down by 0.4 percentage points from its previous outlook. A modest recovery to 6.1 percent is anticipated in 2026.
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