The World Bank projects Bangladesh’s economy will grow 3.4% in both FY26 and FY27, reflecting weaker investment and exports, elevated inflation, energy constraints and financial sector vulnerabilities. Strong remittance inflows and improving foreign exchange reserves have supported the external sector, while growth could rise to 3.9% in FY28 if energy supply gradually improves and government reforms accelerate. The nonperforming loan ratio increased to 33.2% in June 2026 from 30.6% in December 2025, weakening credit intermediation and investor confidence. Revenue remained low at 8.3% of gross domestic product, while the fiscal deficit widened to 3.9% of GDP in FY26 from 3.5% in FY25. Poverty and inequality also increased, with about 2.1 million more people living in poverty than a year earlier amid stalled job creation and job losses among women. The World Bank called for better targeted and more responsive social protection, noting that about half of the poorest households are not covered by any program. Scaling up the government’s Dynamic Social Registry and consolidating food subsidies with better targeted cash programs could lift an additional 2.85 million people out of poverty. In its companion regional update, the World Bank projected South Asian growth of 6.9% in 2026 and 6.7% in 2027, while identifying artificial intelligence as a potential source of productivity, export and public service gains if governments address barriers to adoption.
World Bank projects Bangladesh growth at 3.4% through FY27 as financial sector vulnerabilities deepen
The World Bank projects Bangladesh’s economy will grow 3.4% in FY26 and FY27 as weaker investment, elevated inflation and financial sector vulnerabilities constrain activity. Nonperforming loans reached 33.2% in June 2026, while poverty increased and revenue remained low at 8.3% of GDP. Better targeted social protection and faster reforms could support poverty reduction and lift growth to 3.9% in FY28.