Bangladesh economy is demonstrating resilience amid moderating inflation and strong external stability, although fiscal pressures and global uncertainties continue to pose challenges, according to the latest report by the General Economics Division (GED) of the Bangladesh Planning Commission.
The report noted that headline inflation eased slightly to 8.71 percent in March 2026, down from 9.13 percent in February, largely driven by a decline in food prices.
Food inflation dropped to 8.24 percent, supported by improved domestic supply and the arrival of the boro harvest, with rice inflation turning negative at -2.20 percent.
However, non-food inflation remained elevated at 9.09 percent, reflecting persistent cost pressures in housing, transport and utilities, mainly due to exchange rate pass-through and higher energy prices.
Although the gap between inflation and wage growth narrowed marginally in March, with wage growth rising to 8.09 percent, real incomes continue to face pressure as wage increases still lag behind the overall cost of living.
Bangladesh’s external sector remained robust, with foreign exchange reserves reaching US$34.12 billion in March, providing a vital cushion against global volatility.
Remittance inflows also remained strong at US$3.76 billion during the month, underscoring the resilience of migrant earnings despite ongoing geopolitical tensions, particularly in the Middle East.
The exchange rate remained relatively stable at Taka 122.62 per US dollar, while a depreciation in the real effective exchange rate is expected to support export competitiveness.
However, export growth slowed on a year-on-year basis in March, reflecting weak global demand and rising energy costs.
On the fiscal and financial front, the report highlighted a sharp rise in public sector credit growth, which surged to 29.61 percent in February 2026, largely driven by increased government borrowing to meet energy-related fiscal needs.
In contrast, private sector credit growth remained subdued at 6.03 percent, indicating cautious investment sentiment.
Fiscal pressures remain evident as revenue collection fell short of expectations, with the National Board of Revenue (NBR) achieving only 62.90 percent of its March target, particularly due to underperformance in VAT and income tax.
At the same time, implementation of the Annual Development Programme slowed, with expenditure amounting to approximately Taka 75,607 crore during the July-March period, pointing to structural bottlenecks and tighter fiscal management.
The GED report emphasized that while strong remittance inflows and adequate foreign exchange reserves are supporting macroeconomic stability, a prudent and cautious policy stance is necessary to navigate emerging risks.
Elevated global energy prices and geopolitical tensions in the Middle East could reverse the recent easing of inflation and put pressure on the external balance.
To ensure sustained economic stability, the report underscored the importance of strengthening revenue mobilization and improving efficiency in public project implementation.
