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GDP growth accelerates, led by industrial expansion
Economists welcome gains but say electricity, fuel, and slower services may limit overall performanc
GDP growth accelerates, led by industrial expansion
Economy grew 4.5% in the first quarter of FY26 compared with 2.58% a year earlier
By Rejaul Karim Byron and Ahsan Habib
Bangladesh's economy rebounded in the first quarter of the current fiscal year of 2025-26 due mainly to stronger agricultural and industrial production.
The overall output, or Gross Domestic Product (GDP), which measures the total value of goods and services produced in a given period grew by 4.50 percent in July-September, according to estimates from the Bangladesh Bureau of Statistics (BBS) released today.
This rate is higher than the 2.58 percent quarterly growth a year earlier.
The industrial sector led the expansion of the economy, posting 6.97 percent growth in the first quarter of FY26. The latest industrial growth is almost double the 3.59 percent recorded during the same period last year, when production was hit hard by mass uprisings and labour unrest.
Factory floors this year were noticeably busier compared with the corresponding quarter.
Agriculture, the largest employer in the economy, expanded by 2.3 percent, recovering from losses caused by repeated floods in 2024. The services sector, the country’s second-largest employer, also grew during the first quarter.
“This is an encouraging sign,” said Prof Mustafizur Rahman, distinguished fellow at local think tank Centre for Policy Dialogue (CPD). “The growth shows signs of recovery as the difference from last year is high.”
Rahman, however, said that this improvement is based on a low growth base from last year. And the growth in the service sector is not big, while agricultural output depends on the weather.
“There is a challenge in the sustainability of the growth,” said the economist.
Although the performance in the industrial sector was strong, export-oriented industries did not do well in the second quarter of the current fiscal year, which could have a negative impact, said Rahman.
Besides, imports of machinery and raw materials for export-oriented industries have not increased despite revived imports of capital machinery. “So, we have to wait to see whether this is a full recovery of the economy or not,” he added.
Zahid Hussain, another noted economist, described the overall recovery as “modest” compared with Bangladesh’s historical growth.
He said, “In the overall growth rate, a large contribution came from the agricultural sector.”
BBS data showed agricultural growth of 2.30 percent, up sharply from a negative 0.6 percent in the first quarter of the previous fiscal year.
Farming growth in the same quarter was also slight in 2023-24, at only 0.62 percent.
Last year, floods heavily affected Aus rice and Aman seedbeds, but this year production rebounded, said Hussain, a former lead economist at the World Bank’s Dhaka office.
Hussain said the sustainability of growth will depend on electricity supply and diesel availability.
According to him, while fuel imports are stable, electricity generation remains a concern. Investment remains lacklustre, and exports have slowed, adding to the challenges.
Historically, growth in the services sector ranges between 5 percent and 6 percent, higher than the current trend.
Disruptions from year-round street protests and a weak law and order situation have had a huge impact on services. High inflation has also reduced people’s purchasing power, limiting consumption of services, he added.
Headline inflation reached 8.49 percent in December, up from 8.29 percent in November and October’s 39-month low of 8.17 percent, according to BBS data.
Economy grew 4.5% in the first quarter of FY26 compared with 2.58% a year earlier
By Rejaul Karim Byron and Ahsan Habib
Bangladesh's economy rebounded in the first quarter of the current fiscal year of 2025-26 due mainly to stronger agricultural and industrial production.
The overall output, or Gross Domestic Product (GDP), which measures the total value of goods and services produced in a given period grew by 4.50 percent in July-September, according to estimates from the Bangladesh Bureau of Statistics (BBS) released today.
This rate is higher than the 2.58 percent quarterly growth a year earlier.
The industrial sector led the expansion of the economy, posting 6.97 percent growth in the first quarter of FY26. The latest industrial growth is almost double the 3.59 percent recorded during the same period last year, when production was hit hard by mass uprisings and labour unrest.
Factory floors this year were noticeably busier compared with the corresponding quarter.
Agriculture, the largest employer in the economy, expanded by 2.3 percent, recovering from losses caused by repeated floods in 2024. The services sector, the country’s second-largest employer, also grew during the first quarter.
“This is an encouraging sign,” said Prof Mustafizur Rahman, distinguished fellow at local think tank Centre for Policy Dialogue (CPD). “The growth shows signs of recovery as the difference from last year is high.”
Rahman, however, said that this improvement is based on a low growth base from last year. And the growth in the service sector is not big, while agricultural output depends on the weather.
“There is a challenge in the sustainability of the growth,” said the economist.
Although the performance in the industrial sector was strong, export-oriented industries did not do well in the second quarter of the current fiscal year, which could have a negative impact, said Rahman.
Besides, imports of machinery and raw materials for export-oriented industries have not increased despite revived imports of capital machinery. “So, we have to wait to see whether this is a full recovery of the economy or not,” he added.
Zahid Hussain, another noted economist, described the overall recovery as “modest” compared with Bangladesh’s historical growth.
He said, “In the overall growth rate, a large contribution came from the agricultural sector.”
BBS data showed agricultural growth of 2.30 percent, up sharply from a negative 0.6 percent in the first quarter of the previous fiscal year.
Farming growth in the same quarter was also slight in 2023-24, at only 0.62 percent.
Last year, floods heavily affected Aus rice and Aman seedbeds, but this year production rebounded, said Hussain, a former lead economist at the World Bank’s Dhaka office.
Hussain said the sustainability of growth will depend on electricity supply and diesel availability.
According to him, while fuel imports are stable, electricity generation remains a concern. Investment remains lacklustre, and exports have slowed, adding to the challenges.
Historically, growth in the services sector ranges between 5 percent and 6 percent, higher than the current trend.
Disruptions from year-round street protests and a weak law and order situation have had a huge impact on services. High inflation has also reduced people’s purchasing power, limiting consumption of services, he added.
Headline inflation reached 8.49 percent in December, up from 8.29 percent in November and October’s 39-month low of 8.17 percent, according to BBS data.
