Archive · 6 Oct 2026
World Bank Warns Bangladesh Growth Faces Banking and Energy Pressures
Bangladesh is facing several problems that may make its economy grow slowly.
The World Bank expects growth to stay at 3.4% in the next fiscal year.
Factories and businesses have been hurt by shortages of gas and electricity.
Bangladesh now imports about one-third of the gas it uses.
Investment and exports also fell in the last fiscal year.
Many poor families do not receive help from safety-net programmes.
The report says many people just above the poverty line could become poor.
It also says electricity subsidies often benefit richer urban households.
The World Bank says reforms are needed to help growth and make support reach poorer people.
The World Bank projects Bangladesh’s growth at 3.4% in FY27, unchanged from FY26 and below its decade-long 5.6% average.
Growth could rise to 3.9% in FY28, but banking risks, energy constraints, weak business conditions and limited fiscal room may weigh on recovery.
Private investment fell 0.5%, public investment fell 0.7%, and real exports of goods and services declined 4.8% in FY26.
Imported LNG supplies around one-third of Bangladesh’s gas demand; fuel shortages and power-distribution bottlenecks have disrupted businesses and factories.
About half of the poorest households are excluded from safety-net programmes, while the richest urban households receive nearly half of electricity subsidies.
- Who
- The World Bank assessed Bangladesh’s economy and social protection system.
- What
- Its October 2026 Bangladesh Development Update warned of subdued growth amid banking, energy and fiscal pressures.
- When
- The report was released on Tuesday; it projects growth for FY27 and FY28.
- Where
- Bangladesh.
- Why
- The report cites banking-sector risks, energy constraints, falling investment and exports, weak revenue collection, persistent inflation and poorly targeted support.
Report’s concerns
Potential for improvement
Economic growth
Report’s concerns
Banking risks, energy shortages, weak business conditions and limited fiscal room could keep growth subdued.
Potential for improvement
The World Bank projects growth could rise from 3.4% in FY27 to 3.9% in FY28, while warning that faster structural reforms are needed.
Social protection and subsidies
Report’s concerns
Around half of the poorest households are excluded from safety nets, and subsidy benefits are poorly targeted.
Potential for improvement
The report’s title calls for making subsidies and social protection work better for poor people.
- Report
- October 2026 Bangladesh Development Update, titled “Make Subsidies and Social Protection Work Better for the Poor”
- FY27 growth forecast
- 3.4%, the same as FY26
- Decade-long average growth
- 5.6%
- FY28 growth forecast
- 3.9%
- FY26 investment and exports
- Private investment fell 0.5%, public investment fell 0.7%, and real exports fell 4.8%
- Gas imports
- Imports meet around one-third of Bangladesh’s gas demand
- Social protection gap
- Around half of the poorest households are excluded from safety-net programmes
- Subsidies and protection spending
- About 3.5% of GDP annually; richest urban households receive nearly half of electricity subsidies