WB lowers Bangladesh growth forecast to 4% for FY25

The World Bank has revised Bangladesh’s economic growth forecast for the fiscal year ending June 2025, projecting a slower 4 per cent growth due to significant political and economic uncertainties. 

This marks a downgrade from the previous forecast, with the World Bank citing the impact of recent political turmoil on the country's outlook.

For the current fiscal year FY24, the WB lowered its growth estimate to 5.2%, falling short of the government's provisional GDP growth estimate of 5.82%. 

The wide range of projections, between 3.2% and 5.2% for FY25, reflects the lack of reliable data and uncertainties around political stability, said the WB in its October 2024 issue of South Asia Development Update released today.

In the short term, political uncertainties are expected to weigh on investment and industrial growth, while recent floods may modestly impact agricultural production. 

However, the World Bank remains optimistic about a gradual recovery in the medium to long term, driven by reforms in the financial sector, improved business climate, increased domestic resource mobilisation, and higher trade.

The report also noted Bangladesh’s growing geopolitical alignment with advanced economies, which has reduced the country's vulnerability across its key foreign exchange sources, including exports, foreign direct investment (FDI), and portfolio investments.