Rising global energy costs and escalating tensions in the Middle East (ME) are posing renewed risks to Bangladesh's key macroeconomic indicators, including inflation, trade deficit, and exchange rate stability, according to the latest publication of the General Economics Division (GED) of the Planning Commission.
The April issue of the Economic Update and Outlook says the external sector is cushioned by relatively strong foreign exchange reserves and steady remittance inflows, although exports are under pressure from weak global demand and higher energy costs.
The report, released on Thursday, recommends a cautious policy framework to restore macroeconomic stability by addressing the ongoing energy crisis.
Headline inflation eased slightly in March 2026, declining to 8.71 per cent from 9.13 per cent in February, mainly due to a moderation in food prices driven by falling rice costs, it says.
Food inflation dropped to 8.24 per cent, while non-food inflation remained persistently high at 9.09 per cent, indicating continued underlying price pressures.
Despite a little drop in rice prices, inflationary pressures persisted in key food categories, with meat inflation rising sharply and fish and vegetables continuing to contribute significantly due to seasonal supply gaps and higher transportation costs linked to the energy situation.
The report warns that despite the recent easing, inflation remains vulnerable to external shocks, particularly from rising global commodity prices, higher energy import bills, and exchange rate pressures.
Wage growth continues to lag behind inflation, although the gap narrowed marginally in March as inflation declined and wages edged up slightly.
However, real incomes remain under pressure, raising concerns about household purchasing power, according to the publication.
The report says growth remained strong in the banking sector, reflecting improved confidence, while public sector credit growth accelerated sharply, partly due to increased government borrowing to meet rising fiscal needs, including energy-related expenditures.
Private sector credit growth remained subdued.
The report has expressed concern regarding lower revenue mobilisation, saying that collection by the National Board of Revenue (NBR) continued to fall short of targets.
In March, collections reached Tk 335.21 billion against a revised target of Tk 532.90 billion, highlighting persistent weaknesses in revenue mobilisation despite modest improvement over the previous month.
On the external front, foreign exchange reserves showed a strengthening trend in early 2026, remaining at comfortable levels despite some monthly fluctuations.
The report notes that reserves continue to provide a critical buffer against global uncertainties.
Remittance inflows remained robust, recording strong year-on-year growth and playing a key role in supporting the external sector by easing pressure on the balance of payments and boosting reserve accumulation.
However, export performance weakened in recent months, reflecting subdued global demand and rising production costs linked to higher energy prices.
Both readymade garment (RMG) and non-RMG exports showed signs of pressure, indicating broader challenges in the external sector.
Imports indicated resilient domestic demand, although a slight decline in capital machinery imports suggested cautious investment sentiments amid global uncertainties and rising costs.
The exchange rate remained broadly stable in nominal terms against the US dollar, though movements in real effective terms indicated underlying pressures.
The GED recommends adopting a cautious and coordinated policy framework to address the ongoing
energy crisis and restore macroeconomic stability.
It calls for prudent fiscal and monetary management to contain inflationary pressures, alongside careful handling of energy pricing and subsidies to reduce fiscal stress.
The GED also stresses the need to strengthen external sector buffers by sustaining foreign exchange reserves and remittance inflows, while providing targeted support to exports amid weak global demand and rising production costs.
In addition, it underscores the importance of improving efficiency in public expenditure and accelerating development project implementation to support overall economic stability.
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