Bangladesh’s economy remains in a fragile and uneven recovery phase, marked by subdued growth, persistent high inflation, and continued external sector pressures, according to a report by the Metropolitan Chamber of Commerce and Industry (MCCI).
The leading chamber said that although the uncertainty following the political changeover in late 2024 has eased, high living costs, weak industrial activity, and cautious private sector sentiment continue to constrain economic momentum.
The MCCI made the observation in its review of the economic situation in Bangladesh for the January-March period of 2026, published today.
During the quarter, economic performance remained mixed, it said.
“Growth stayed modest due to weak exports, subdued private investment, and tight monetary policy aimed at controlling inflation. Elevated inflation and restrictive credit conditions continued to suppress domestic demand and business activity,” the MCCI said.
At the same time, external pressures intensified due to ongoing geopolitical tensions and conflict in the Middle East, which contributed to volatility in global fuel prices, higher import costs, and increased uncertainty in international trade and shipping.
“These developments added further strain on Bangladesh’s balance of payments and inflation outlook,” the MCCI said.
Nevertheless, strong remittance inflows continued to support foreign exchange reserves and helped maintain relative external stability despite a widening trade deficit.
“Overall, while macroeconomic conditions showed gradual improvement, the recovery remained fragile and exposed to both domestic and external risks.”
The MCCI highlighted slowing manufacturing production and private sector credit growth amid delays by businesses in expansion, banks’ cautious lending approach, and subdued exports.
During the July-March period, export earnings fell 4 percent to $35.78 billion as garment exports to major markets, including the United States, Germany, the UK, Italy, and France, declined during the period.
Imports, however, increased 5 percent during July-February, widening the trade deficit to $16.91 billion from $13.71 billion a year earlier.
Remittances, however, remained the main support for the external sector.
Bangladesh received $3.76 billion in remittances in March, the highest monthly inflow since at least July 2019. Total remittance inflows rose 20 percent year-on-year to $26.21 billion during the July-March period of fiscal year 2025-26.
The rise in remittances helped Bangladesh record a balance of payments surplus of $3.43 billion during July-February, compared with a deficit in the same period a year earlier. Foreign exchange reserves stood at $34.12 billion at the end of March.
Inflation remained high despite a decline in food prices. Headline inflation eased to 8.71 percent in March from 9.13 percent in February. Food inflation fell to 8.24 percent, but non-food inflation increased to 9.09 percent because of higher fuel and utility costs. Bangladesh's general point-to-point inflation climbed to 9.04 percent in April
The report also pointed to pressure on government finances.
The National Board of Revenue missed its revised collection target by Tk 97,990 crore during July-March, the largest revenue shortfall in the country’s history. Revenue collection reached Tk 287,862 crore against a revised target of Tk 385,852 crore.
The report said lower imports, slow business activity, weak investment, and inflation affected tax collection.
Public spending also remained slow.
The MCCI said exports, imports, and foreign exchange reserves may increase in the next three months.
“Remittances may decrease in April and then increase in the next two months. Inflation, however, is likely to go up in April and May due to Eid-ul-Azha and then rise slowly in June of FY26,” it said, projecting inflation at 9.4 percent this month and 9.45 percent in June.
