The General Economics Division (GED) of the Planning Commission has projected a cautiously optimistic economic recovery for May and June 2025, driven by reform measures and a stabilising macroeconomic environment.

In its latest Economic Update and Outlook released this month, the GED highlighted gains in exports, remittances, exchange rate stability, and easing inflation as key drivers, though it warned of risks from persistent inflation and political uncertainty.

The report noted steady growth in bank deposits (8.51% year-on-year in March 2025, a nine-month high) and private sector credit (7.57% in March from 6.82% in February), alongside rising foreign exchange reserves, with gross reserves reaching $27.4 billion and BPM6 reserves at $22.0 billion by April 2025. Remittance inflows surged 35% year-on-year, narrowing the current account deficit projection to 0.9% of GDP for FY2025 from 1.4% in FY2024.

However, exports dipped to $3.01 billion in April, the fiscal year’s lowest, due to sluggish apparel shipments, Eid al-Fitr holidays, and US tariff uncertainties.

Despite revenue collection lagging, the GED expressed confidence in structural reforms, including the dissolution of the National Board of Revenue (NBR) on May 12 via an Ordinance. The NBR has been replaced by the Revenue Policy Division and Revenue Management Division under the Ministry of Finance to address inefficiencies and promote evidence-based policymaking.

A Medium- and Long-Term Revenue Strategy (MLTRS) for FY2025-26 to FY2034-35 aims to raise the tax-to-GDP ratio to 10.5% by FY2034-35, though the GED urged learning from past reform failures, noting Bangladesh’s lower revenue-to-GDP ratio compared to peers.

The report flagged concerns over public sector borrowing, which soared to Tk 985.79 billion by mid-April 2025 (a 60% year-on-year increase), risking crowding out private sector credit.

Inflation eased slightly in April due to lower food prices, particularly rice and fish, but the GED recommended maintaining strategic food reserves and expanding safety net programs like school feeding, food-for-work, and open market sales to address fiscal constraints and rising food costs.

The GED emphasized prudent fiscal measures in the upcoming budget to curb inflation and boost investor confidence, alongside sustained efforts in revenue generation and social protection to ensure macroeconomic stability and inclusive growth.