Bangladesh’s economy posted a mixed performance in the October–December quarter of FY2025–26 as weak exports, sluggish private investment and persistent inflation continued to weigh on growth, according to the Metropolitan Chamber of Commerce and Industry (MCCI).
In its quarterly economic review, MCCI said macroeconomic stability improved gradually, supported by strong remittance inflows and a rise in foreign exchange reserves, but the overall recovery remained fragile amid tight monetary policy and subdued business activity.
Exports declined marginally by 0.54 percent to US$24.40 billion during July–December of FY26, compared to US$24.53 billion in the same period of the previous fiscal year, mainly due to weak performance in knitwear and woven garments. Meanwhile, imports increased by 5.16 percent to US$29.13 billion in July–November, widening the trade deficit to over US$9.41 billion.
Remittances emerged as a key positive factor, rising 18.05 percent to US$16.26 billion in July–December FY26, while December alone saw a 22.19 percent increase year-on-year to US$3.22 billion.
This helped boost foreign exchange reserves to US$33.19 billion at the end of December 2025, a three-year high.
Inflation remained elevated, rising to 8.49 percent in December 2025 from 8.29 percent in November, driven by increases in both food and non-food prices.
The government has set a target of keeping average inflation at 6.5 percent during the current fiscal year.
Private sector credit growth slowed to 6.10 percent in December 2025, below the Bangladesh Bank target of 7.20 percent, reflecting cautious lending amid tightening monetary conditions. In contrast, public sector credit expanded sharply by 28.13 percent.
Revenue collection by the National Board of Revenue grew by 14.19 percent to Tk 185,229 crore during July–December FY26 but fell nearly 20 percent short of its target, highlighting fiscal challenges.
Implementation of the Annual Development Programme (ADP) dropped to a 20-year low, with only 17.54 percent of the allocation utilised in the first six months of FY26, raising concerns about development momentum.
The industrial sector grew by 6.97 percent in Q1 FY26, while manufacturing expanded by 6.17 percent. However, agricultural growth slowed to 2.30 percent, and services sector growth stood at 3.67 percent.
Foreign direct investment inflows increased significantly by nearly 60 percent to US$651 million during July–November FY26, although MCCI noted that overall FDI remained low compared to peer economies.
Foreign aid disbursement declined sharply by 29.18 percent to US$2.50 billion in the first half of FY26, reflecting slower implementation of externally funded projects.
The balance of payments recorded a surplus of US$769 million during July–November FY26, reversing a deficit of US$2.54 billion a year earlier, largely due to strong financial account inflows and remittances.
However, overseas employment declined by 6.29 percent in October–December FY26 compared to the same period of the previous fiscal year.
The MCCI said while improved remittance inflows and reserve accumulation provided some macroeconomic stability, continued inflationary pressure, weak export growth, sluggish private investment and slow development spending posed significant challenges to a sustained economic recovery.
Bd-pratidin English/ ANI
