Bangladesh must implement urgent and comprehensive reforms in its financial, energy and revenue sectors to reverse slowing economic growth, restore investor trust and generate employment, the World Bank warned on Tuesday.
In its latest Bangladesh Development Update, the lender projected economic growth to slow to 3.4% across FY2026 and FY2027. The report pointed to persistent structural challenges, low tax revenue collection, banking sector weaknesses and a volatile global investment environment.
Growth is expected to pick up slightly to 3.9% in FY2028, contingent on easing energy shortages and accelerating government policy reforms.
"Bangladesh needs to respond with urgency and speed up the reforms essential for protecting the poor and creating more and better jobs" said Jean Pesme, World Bank Division Director for Bangladesh and Bhutan.
The report noted that investment has slowed while export growth has lost steam. Persistent inflation continues to erode household spending power and raise business operating expenses while financial sector fragilities have dampened business confidence. Furthermore the tight government budgets have limited public development spending.
On a positive note the World Bank highlighted resilience in the external sector also bolstered by steady remittance inflows and recovering foreign exchange reserves.
