IMF Forecast: Bangladesh Growth May Slow to 3.2% as Inflation Rises to 10.9%

Bangladesh’s economic growth may slow in the 2026–27 fiscal year, while inflationary pressure could intensify, according to the International Monetary Fund’s (IMF) October 2026 forecast. The IMF projects that the country’s gross domestic product (GDP) growth could fall to 3.2%, while average inflation may rise to 10.9%.

The projections were published in the IMF’s World Economic Outlook report on Tuesday during the ongoing joint annual meetings of the World Bank and the IMF.

According to the report, Bangladesh’s growth rate for the 2025–26 fiscal year is expected to stand at 3.6% in the final estimate, with average inflation at 8.7%. The latest outlook therefore points to slower growth and increased inflationary pressure in the current fiscal year.

Data from the Bangladesh Bureau of Statistics (BBS) show that the country’s overall inflation rate stood at 8.34% in September.

Global growth outlook

The IMF projects global economic growth at 3.1% in 2026, rising to 3.4% in 2027. Global average inflation is expected to decline from 4.7% in 2026 to 4.1% in 2027.

Slower growth in Bangladesh could constrain investment and job creation. If private investment remains below expectations, industrial production, business expansion and income growth could also suffer. Meanwhile, persistent inflation could erode real incomes and purchasing power, placing the greatest burden on low- and middle-income households.

World Bank highlights economic challenges

The World Bank has also outlined several challenges facing Bangladesh in its October 2026 Bangladesh Development Update, titled “Make Subsidies and Social Protection Work Better for the Poor.”

The report highlights weak private investment and employment, disruptions to industrial production caused by gas and electricity shortages, and growing non-performing loans and capital shortfalls in the banking sector. It also notes that high inflation is reducing people’s real incomes and purchasing power.

The World Bank further points out that a significant portion of government spending on social protection, electricity, energy and fertiliser subsidies does not reach poor households. While many better-off families benefit from these programmes, some of the poorest households remain outside the social safety net.

World Bank calls for reforms

The World Bank has identified restoring stability in the banking sector, strengthening energy security and governance, and increasing tax revenue as key reform priorities.

It has also recommended gradually reducing broad-based subsidies while expanding targeted support for poor and vulnerable people. Effective implementation of these reforms will be important to improving economic growth, employment and living standards.