West Asia Conflict Slashes Bangladesh Growth to 4%, ADB Warns

According to the report by The Daily Star, the ADB has projected economic growth of 4.7 per cent for the next fiscal year (2026-27).

The bank has revised Bangladesh's Gross Domestic Product (GDP) growth estimate for the third time. In December, it had forecast 4.7 per cent growth for the current fiscal, down from its September estimate of 5 per cent. Earlier, in April last year, the ADB had projected growth at 5.1 per cent for the same period.

The report noted that the current outlook points to a gradual recovery in consumption and investment, supported by easing political uncertainty following the general elections.

The ADB also said that temporary supply chain disruptions due to geopolitical tensions in West Asia affected the last quarter but are expected to subside.

ADB Country Director Hoe Yun Jeong said, "Bangladesh is facing a difficult economic environment, shaped by global uncertainties, domestic structural constraints, and pressures on the external and financial sectors."

Inflation is expected to remain elevated at around 9 per cent in FY26, before moderating to 8.5 per cent in FY27 as external shocks ease and domestic supply conditions improve, the report said.

"Downside risks to the outlook remain substantial, particularly if the conflict prolongs," it added.

The report further said that disruptions to global energy markets, shipping routes and supply chains could push up oil and gas prices, intensifying inflationary pressures and complicating disinflation efforts.

"Higher energy prices could also widen the fiscal deficit, especially if energy-related subsidies increase or the pass-through to consumers is delayed," the ADB said.

It also noted that the current account deficit is projected at 0.5 per cent of GDP in FY26, widening slightly to 0.6 per cent in FY27.

- IANS