Bangladesh Economy Stabilizes as Growth Hits 4.14% Amid Persistent Macro Challenges

The chamber cautioned that the modest acceleration still leaves output below the country's longer-term potential, with headline inflation, subdued private investment and banking-sector fragilities continuing to weigh on the recovery. The assessment frames the current cycle as a stabilisation phase rather than a structural rebound — a distinction that will govern policy choices over the coming fiscal year.

External sector carries the weight

The macroeconomic floor during the April–June quarter was built almost entirely on the external account. Remittance inflows reached $9.38 billion in the quarter, pushing the full-year total to a record $35.59 billion — a 17.34% year-on-year increase. That inflow translated directly into reserve accumulation: gross foreign exchange holdings rose to $37.58 billion by the end of June, compared with $34.48 billion a month earlier. The balance of payments surplus for FY26 reached $6.61 billion, nearly double the $3.39 billion recorded in FY25, and the central bank returned to net dollar purchasing, buying $6.43 billion over the fiscal year after selling dollars in FY25.

The trade side, however, offered less support. Merchandise exports edged up just 0.17% to $48.38 billion for the full fiscal year, with readymade garments — still the dominant earner — contracting 0.96%. Imports rose 10.07% to $75.24 billion, reflecting improved currency access and stronger demand for industrial intermediates rather than consumer-led expansion.

Inflation, credit and the unresolved domestic gap

Headline inflation remained the principal domestic constraint, rising to 9.16% in June after touching 9.42% in May, though it eased further to 8.32% by July. Food inflation softened to 8.60% in June, but non-food and energy price pressures persisted, eroding household purchasing power. Industrial production contracted 0.28% in the third quarter, with manufacturing output down 0.34%, a pattern the MCCI attributes to elevated borrowing costs, tight monetary conditions and investor caution.

The chamber's review is unambiguous about the priority sequence: consolidate the external-sector gains already secured, bring inflation into a manageable trajectory, and then establish the conditions for a private investment revival. That sequencing matters because remittance-driven reserve accumulation, however robust, does not by itself resolve the credit-channel weakness or the manufacturing stagnation that keep growth below potential.

What to watch into FY27

MCCI's early projections for the first quarter of FY27 point to monthly export earnings holding between $4.76 billion and $4.80 billion and remittance inflows ranging from $2.93 billion to $2.99 billion — figures that would sustain current reserve levels only if import growth continues to be absorbed by export and remittance receipts in tandem. The chamber identifies financial-sector governance reform and revival of private-sector credit as the structural levers without which the present stabilisation risks reverting to the weaker trajectory that defined much of FY25. The data points to monitor in the months ahead are the trajectory of non-food inflation, the pace of private credit growth, and whether garment exports — flat in aggregate terms — show a sustained recovery beyond the single-month June rebound.