Bangladesh economy may grow at the slowest rate in 36 years

The World Bank has downgraded Bangladesh’s economic growth forecast, warning that the country could see its slowest growth in 36 years. According to the latest World Bank report, Bangladesh’s economic growth could slip to 3.3% in the 2024-25 financial year, a steep fall from the 4.1% projection made just four months ago in January. The country’s financial year ends in June.
The report attributes the slowdown to declining investment, rising inflation, financial sector instability, and political uncertainty—factors that are collectively weakening the economy. Analysts warn that each percentage point drop in GDP results in the loss of employment for millions, a worrying trend in a country where large sections of the population already struggle for jobs.

The World Bank cautions that the downturn could push an additional 3 million Bangladeshis into extreme poverty, defined as living on less than $2.15 per day. It also estimates that by the end of the current fiscal year, 9.3% of Bangladesh’s population could be living in extreme poverty, up from 7.7% a year ago.

The crisis has been exacerbated by Bangladesh’s growing estrangement from India, resulting in the loss of several strategic advantages, from bilateral trade opportunities to economic support during times of crisis. Meanwhile, fresh headwinds from the ongoing US-China trade war have further worsened the situation for Bangladesh. While the United States has imposed higher tariffs on Bangladeshi exports, India’s strategic importance for China has risen, leaving Bangladesh further isolated.