Bangladesh: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bangladesh

The 2025 Article IV Consultation discusses that Bangladesh’s economic growth has slowed recently, while inflation has remained elevated. The economy is expected to recover gradually over the medium term. With implementation of policies to mobilize tax revenue and address financial sector vulnerabilities, growth is projected to rebound to 4.7 percent in FY26 and gradually accelerate to around 6 percent over the medium term. Inflation is projected to remain elevated at 8.9 percent in FY26 before subsiding to around 6 percent in FY27. Risks to the outlook are tilted to the downside, mainly from delayed or inadequate policy action and reversals of exchange rate reform and fiscal discipline. Comprehensive structural reforms to strengthen governance, enhance transparency, and promote export diversification are prerequisites for attracting foreign direct investment and ensuring inclusive development. Legal and central bank governance reforms should be aligned with best international practices. Building resilience to natural disasters remains a top priority. Continued policy and reform efforts are essential to advance climate-resilient infrastructure, effectively manage fiscal and financial risks associated with climate-related events, and accelerate climate finance.