Bangladesh Economy Daily Brief (5 pm Dhaka)
Growth outlook cools
– The World Bank has flagged Bangladesh for its weakest growth since the pandemic, while the ADB now projects FY2025 GDP growth at 3.9% before a rebound in FY2026. Separate assessments indicate the outlook has been revised downward for the next three fiscal years.
– Business leaders warn the economy faces a roughly $10 billion setback and reputational damage following recent disruptions, though exporters are increasingly confident about recouping losses as conditions stabilise.
– PMI readings point to slow expansion for 11 consecutive months, underscoring a subdued but ongoing recovery.
Prices and policy
– Inflation in FY2024 hit a 13-year high, and prolonged monsoon rains have pushed up vegetable and egg prices, keeping near-term food inflation pressures alive.
– Debate over another round of monetary tightening is intensifying: industry groups caution that higher rates would raise production costs and potentially squeeze activity, even as authorities prioritise disinflation.
Money, FX and reserves
– The IMF says Bangladesh has made notable improvements in macro performance under its programme. A $14.76 billion reserve ceiling under the programme will influence FX management and liquidity planning.
– Liquidity is improving at the margin: banking sector deposits rose by Tk 73,000 crore over the past three months, consistent with signs that financial conditions are healing.
Banking cleanup and investment climate
– The government is moving to expedite resolution of Tk 38,000 crore in bad-loan cases to accelerate balance-sheet repair.
– Policymakers and experts are pressing for a stronger investment climate, including broader direct tax coverage and better compliance, to attract FDI and support medium-term growth.
Trade and industry
– Bangladesh is seeking entry into the Regional Comprehensive Economic Partnership (RCEP), signaling a push for deeper trade integration in Asia.
– Trade through Benapole land port, a key India gateway, has been halted for two days, implying temporary disruption to cross-border flows.
– In corporate news, Confidence Cement plans to sell its entire Dhaka unit stake worth Tk 141 crore, reflecting ongoing portfolio adjustments in manufacturing.
Markets
– Dhaka stocks opened higher as the market attempted a rebound, with risk sentiment aided by expectations of policy continuity and improving liquidity.
Bottom line
The near-term picture remains mixed: softer growth forecasts and sticky inflation are colliding with early signs of financial stabilisation, gradual export normalisation, and a stronger reform push. The policy balance between disinflation and growth support—alongside FX management under the IMF programme—will be critical in the coming quarter.