Bangladesh is poised for a significant economic rebound, with HSBC projecting GDP growth to reach 7.1% in FY2025-26. This optimistic outlook for Bangladesh’s economic rebound follows a revised growth rate of 4.5% for FY2024-25, driven by strong exports and rising remittances.

Frederic Neumann, Chief Asia Economist and Co-Head of Global Research Asia at HSBC, shared these insights during a webinar titled “Navigating Bangladesh’s Crossroads”, hosted by HSBC Bangladesh. The event explored global and regional market trends, focusing on Bangladesh’s economic outlook amidst recent political and economic developments.

Optimistic Outlook Despite Challenges

The webinar drew from HSBC’s recent research report, “Regaining Balance: Bangladesh Looks to Recovery.” Neumann noted that Bangladesh’s anticipated recovery hinges on the strength of its export sector, particularly the garment industry, which accounts for 83% of the nation’s exports. Increased demand from international markets is expected to drive growth despite global economic challenges.

“Though GDP growth for FY2024-25 has been adjusted to 4.5%, the rebound to 7.1% in the subsequent fiscal year will be fueled by strong exports and rising remittances,” Neumann said.

Key Drivers of Growth

Bangladesh’s economic resurgence is underpinned by several factors:

• Export Growth: The garment sector, a cornerstone of the economy, is poised to benefit from growing demand in international markets.
• Rising Remittances: Improved employment conditions in key overseas markets are expected to boost remittance inflows, supporting household consumption and broader economic recovery.
• Stabilizing Imports: Easing global energy prices have alleviated pressure on imports, signaling a revival in domestic demand.

Inflation and Structural Reforms

While the outlook is optimistic, challenges remain. Inflation continues to strain household spending and business operations. HSBC emphasized the importance of structural reforms, particularly in the banking sector, and stringent inflation control measures to unlock the economy’s full potential.

“Macroeconomic adjustments in recent months, coupled with Bangladesh’s solid fundamentals, provide a strong foundation for recovery,” Neumann stated. He added that expedited implementation of reforms would further accelerate the process.

Insights from the Webinar

Md Mahbub ur Rahman, CEO of HSBC Bangladesh, and Gerard Haughey, Country Head of Wholesale Banking, HSBC Bangladesh, were among the notable speakers at the event, which attracted nearly 300 clients and stakeholders. Discussions centered on the resilience of Bangladesh’s economy and its readiness to navigate emerging opportunities.

HSBC’s projections underscore the resilience of Bangladesh’s economy, reinforcing confidence in its long-term growth prospects.

Source: The Financial Express