World Bank Bangladesh Growth Forecast Falls to 3.4 Percent for FY27

The World Bank Bangladesh growth forecast has been cut again. The bank now expects GDP to grow 3.4 percent in FY27. That is 1.2 percentage points lower than its earlier projection, and the same rate as FY26.

The Bank sees a recovery to 3.9 percent in FY28. It also notes that the past decade’s average was 5.6 percent. The report was reported on 6 October by The Business Standard.

Why the World Bank Bangladesh growth forecast fell

Banking stress is the biggest drag. Non-performing loans reached 33.2 percent in June 2026, up from 20.2 percent in December 2024. Islamic banks stand at 58.9 percent and state-owned commercial banks at 43.2 percent. The capital adequacy ratio was minus 2.6 percent in December 2025. The regulatory minimum is 10 percent.

The central bank has provided Tk760 billion, about $6.2 billion, in liquidity support. Yet private-sector credit growth has slowed to 4.5 percent. The Bank calls it a 33-year low.

Energy is the second problem. Bangladesh now imports about one-third of its gas demand. Domestic output is falling, and LNG dependence is rising. Shortages hurt factories and farms.

Public finances are tight. Domestic revenue was 8.3 percent of GDP in FY26. The fiscal deficit was 3.9 percent and is projected to widen to 4.8 percent in FY27. Public debt could reach 45.2 percent of GDP by FY28.

Households feel the pressure. The Bank puts national poverty at 22.5 percent in FY26, up from 18.7 percent in 2022. Inflation was 8.7 percent, down from 10 percent the year before. Exports contracted by 0.2 percent. Garment exports to the EU fell 3.3 percent.

Finance Minister Amir Khosru Mahmud Chowdhury answered the forecast with two words: “wait and see”. He left without further comment.

The message to policymakers is clear. Bank reform, energy supply and revenue collection cannot wait. Our earlier report on the LPG price inquiry shows how fragile energy supply already is for ordinary families.

Fact basis: The Business Standard and The Business Standard, 6 October 2026.