Inflation, however, has remained elevated so far in the current fiscal year, staying above 8% over the past six months
Representational image/Collected
“>
Representational image/Collected
Bangladesh’s economy is expected to grow 4.6% in the current fiscal year (FY26), up from an estimated 4.1% a year earlier, before rising further to 5.4% in FY27, according to a United Nations report.
But the projected growth still remains short of pre-pandemic levels.
Released on Thursday (8 January), the UN Department of Economic and Social Affairs report titled “World Economic Situation and Prospects 2026” also anticipated some relief on prices, with inflation expected to ease to 7.1% in FY26 and further to 6% next fiscal year.
Inflation, however, has remained elevated so far in the current fiscal year, staying above 8% over the past six months.
The forecast further predicts a rise in Bangladesh’s GDP in FY26, aligning with positive growth projections from the Asian Development Bank, World Bank, and International Monetary Fund.
The Asian Development Bank, in its September 2025 outlook, projected Bangladesh’s GDP growth at 5% in FY26. In October last year, the World Bank forecast growth of 4.8% in FY26, rising to 6.3% in FY27.
Around the same time, the International Monetary Fund projected growth of 4.9% for FY26 and 5.7% for the following fiscal year.
However, the interim government has set a higher GDP growth target of 5.5% for FY26, exceeding the projections made by international agencies.
South Asia to remain resilient
According to the UN report, economic growth in South Asia is expected to remain relatively strong, though slightly moderating in the near term. Regional growth is projected to ease from an estimated 5.9% in 2025 to 5.6% in 2026, before recovering to 5.9% in 2027. Trade policy uncertainty and high public debt were cited as continuing constraints for several economies.
India’s economy is estimated to have grown by 7.4% in 2025 and is forecast to expand by 6.6% in 2026 and 6.7% in 2027, supported by resilient private consumption and strong public investment, which are expected to offset the impact of higher United States tariffs on exports.
Bhutan is projected to maintain growth above 6% in the near term, driven by strong government spending and the ongoing recovery of agriculture and tourism. Growth in the Maldives and Sri Lanka is forecast to moderate to around 4.3% and 4.0% respectively in 2026.
Pakistan’s economy is expected to grow by 3.5% in FY26, up from an estimated 3.1% in FY25, while Nepal’s growth is forecast to ease slightly to 4.3% in FY26 from an estimated 4.4% the previous year.
Global growth to remain subdued
At the global level, the UN projects economic growth to slow to 2.7% in 2026 before edging up to 2.9% in 2027, still below the pre-pandemic average of 3.2% recorded between 2010 and 2019.
The report noted that a sharp increase in United States tariffs had “created new trade frictions”, although the lack of broader escalation had helped limit immediate disruption to international trade.
“A combination of economic, geopolitical and technological tensions is reshaping the global landscape, generating new economic uncertainty and social vulnerabilities,” UN Secretary-General António Guterres said.
He added, “Many developing economies continue to struggle and, as a result, progress towards the Sustainable Development Goals remains distant for much of the world.”