Bangladesh economy records lowest growth in three years

Bangladesh’s economy slowed for the third straight year in FY25, with gross domestic product (GDP) growth easing to 3.49%—the lowest rate since the post-pandemic recovery began. The Bangladesh Bureau of Statistics (BBS) released its final GDP estimate on Thursday, February 26, revising the figure down by 48 basis points from the provisional estimate.

The latest reading underscores a clear deceleration trend over recent years. After expanding by 7.10% in FY22, growth slipped to 5.78% in FY23 and 4.22% in FY24 before reaching 3.49% in FY25. The last comparable low was in FY20, when growth fell to 3.45% amid the initial shock of the Covid-19 pandemic.

• FY22: 7.10%
• FY23: 5.78%
• FY24: 4.22%
• FY25: 3.49% (final estimate)

Despite the slowdown, the size of the economy reached $456 billion in FY25. After two consecutive years of decline, per capita income rose to $2,769.

Sector trends

BBS data indicate that growth in agriculture and services weakened compared with the previous year. The industrial sector, however, posted relatively stronger gains, helping to cushion the overall slowdown. Even so, the uplift from industry was not enough to offset broader softness across the economy.

What’s driving the deceleration

Economists point to a combination of domestic and external pressures that have filtered through to growth:

• Global economic uncertainty weighing on trade and investment sentiment
• Persistently high inflation eroding real incomes and demand
• Rising import costs adding strain to businesses and the external balance
• Stagnation in investment limiting capacity expansion and productivity gains

Outlook and policy priorities

To revive momentum in the coming fiscal year, analysts suggest a targeted focus on three fronts: accelerating investment, expanding exports, and supporting consumption. Strengthening the investment climate, removing bottlenecks that raise costs for producers, and facilitating access to inputs could help industry sustain its relative resilience. On the external side, measures that enhance export competitiveness and diversify markets would reduce vulnerability to global headwinds. Meanwhile, policies aimed at stabilizing prices and protecting real purchasing power could help steady domestic demand.

With growth now at a three-year low, the policy challenge is to balance immediate support for the economy with steps that reinforce long-term productivity and resilience. The FY25 figures highlight both the headwinds facing Bangladesh and the scope for targeted actions to restore a stronger and more broad-based expansion.