DHAKA, Jan 25, 2026 (BSS) - Bangladesh's 2026 economic outlook balances 
potential growth (around 5 percent) with structural challenges with inflation 
expected to ease gradually, according to the Economic Update and Outlook 
(January) published by the General Economics Division (GED) of the Planning 
Commission.

The GED Update and Outlook released today said the economy will require 
strong governance, policy consistency and sustained investment in skills and 
technology to diversify beyond the garment sector, particularly as the 
country approaches graduation from the least developed country (LDC) category 
and navigates a democratic transition. 

A stable and reformed political environment, along with smart technology 
integration, is critical for shifting from a low-cost labour model to higher-
value economic activities, the GED noted, cautioning that uncertainty among 
economic elites and institutional weaknesses remain key risks.

As progress towards the Sustainable Development Goals (SDGs) remains slow, 
the publication suggested that evidence-based policymaking, supported by 
village-level interventions, could help achieve sustainable development 
outcomes at the local level.

General inflation rose further in December 2025 to 8.49 percent from 8.29 
percent in November, driven by accelerating food prices amid persistently 
high non-food inflation.

Food inflation increased from 7.36 percent to 7.71 percent during the period, 
while non-food inflation remained elevated at 9.13 percent. 

Although rice inflation continued its downward trend across all categories, 
rice prices remained high.

Overall rice inflation declined from 12.26 percent in November to 11.92 
percent in December, with medium rice inflation easing from 10.96 percent to 
10.48 percent, fine rice from 15.43 percent to 14.84 percent, and coarse rice 
from 11.04 percent to 10.92 percent. 

The contribution of rice to food inflation fell from 40.28 percent in 
November to 37.34 percent in December. In contrast, the contribution of fish 
and dry fish rose sharply from 40.77 percent to 43.34 percent, making it the 
largest contributor to food inflation during the month. 

Onion shifted from a negative to a positive contribution, while potato 
remained a major disinflationary factor. 

Price inflation outpaced wage growth in December, widening the gap between 
the two. While price inflation rose by 0.20 percentage points, wage inflation 
increased marginally from 8.04 percent to 8.07 percent. 

According to provisional quarterly national accounts estimates from the 
Bangladesh Bureau of Statistics (BBS), real economic growth in Q1 of FY2025-
26 rose to 4.50 percent, up from 2.58 percent in the same quarter of the 
previous fiscal year.
 

Overall GDP growth at constant prices reached 3.72 percent in FY2024-25, 
based on provisional estimates. 

Sectoral data showed broad-based improvement. Agricultural growth turned 
positive at 2.3 percent after contracting in Q1 of FY2024-25. Industrial 
growth accelerated sharply from 3.59 percent to 6.97 percent, while services 
sector growth improved from 2.96 percent to 3.67 percent, supported by 
transport, accommodation and information services. 

The share of agriculture in GDP declined to 9.84 percent, while the 
industrial sector's share increased to 38.34 percent, indicating a gradual 
structural shift towards industry. 

Bank deposits continued to grow in October and November, with year-on-year 
growth reaching 10.8 percent in November. Public sector credit expanded 
rapidly, rising to 23.24 percent in November, reflecting higher government 
borrowing. 

Private sector credit growth remained modest at 6.58 percent, indicating 
subdued private investment. 

For FY2025-26, the revised revenue target was set at Taka 554,000 crore. In 
December 2025, revenue collection stood at Taka 36,191 crore, falling short 
of the revised monthly target by Taka 15,174 crore, although collections 
improved significantly compared to November and year-on-year. 

The Revised Annual Development Programme (RADP) for FY2025-26 was finalised 
at Taka 200,000 crore, down from Taka 230,000 crore in the original ADP, 
reflecting fiscal pressures and implementation performance.

Allocations increased in sectors with stronger execution capacity, including 
Environment, Forestry and Water Resources (up 20.36 percent) and Local 
Government and Rural Development (up 12.40 percent). In contrast, major cuts 
were made to health, transport, education and energy sectors. 

Despite the reduced allocation, the number of approved projects increased, 
indicating a broader but more tightly funded development programme.

Foreign exchange reserves strengthened in the first half of FY2025-26, with 
gross reserves rising to US$ 33.19 billion in December 2025. Remittance 
inflows also grew robustly, reaching US$3.22 billion in December, supported 
by regulatory incentives and a more favourable exchange rate regime. 

Export earnings showed signs of stabilisation, averaging around US$ 4.0 
billion per month, with the ready-made garment sector remaining the dominant 
contributor. 

The exchange rate remained broadly stable in December, with easing 
appreciation pressures observed in real effective exchange rate (REER) terms.