Bangladesh’s economic growth may slow this fiscal year, while inflation is likely to rise, according to the International Monetary Fund’s (IMF) October 2026 forecast.
The IMF projects that Bangladesh’s gross domestic product (GDP) growth could fall to 3.2 per cent in the 2026–27 fiscal year, while average inflation could climb to 10.9 per cent.
The outlook raises fresh concerns about the pace of economic recovery, people’s purchasing power and the investment climate.
The report was released this morning, Tuesday, during the ongoing joint annual meetings of the World Bank and the IMF.
According to the IMF’s World Economic Outlook, Bangladesh’s GDP growth is estimated to have reached 3.6 per cent in the 2025–26 fiscal year, while average inflation for the year is projected at 8.7 per cent. This means the country could face slower growth and mounting inflationary pressure in 2026–27.
According to the Bangladesh Bureau of Statistics (BBS), overall inflation stood at 8.34 per cent in September.
The IMF projects global economic growth at 3.1 per cent in 2026, rising to 3.4 per cent in 2027. Global average inflation is forecast to stand at 4.7 per cent in 2026 before declining to 4.1 per cent in 2027.
Although the report does not provide an extensive analysis of Bangladesh, the IMF has warned in previous reports that slowing economic growth is a cause for concern.
According to it, weak economic activity can limit opportunities for fresh investment and job creation. In particular, if private investment fails to increase as expected, industrial production, business expansion and income growth could suffer.
High inflation can also erode real incomes and purchasing power, placing the greatest burden on low- and middle-income households.
The World Bank recently painted a similarly challenging picture of Bangladesh’s economy, pointing to slowing growth, weak private investment and employment, and disruptions to industrial production caused by gas and electricity shortages.
According to it, non-performing loans and capital shortfalls in the banking sector are also increasing, while high inflation continues to erode people’s real incomes and purchasing power.
Meanwhile, despite substantial government spending on social protection, electricity and energy, and fertiliser subsidies, a significant share of the benefits fails to reach poor households. Many affluent families receive assistance, while some of the poorest remain excluded from social protection programmes.
These findings were presented in the World Bank’s October 2026 Bangladesh Development Update, titled Make Subsidies and Social Protection Work Better for the Poor, released on Tuesday.
The report identifies restoring stability in the banking sector, ensuring energy security and good governance, and increasing tax revenue as key areas for reform. It also recommends gradually reducing general subsidies while expanding targeted support for poor and vulnerable people.