Bangladesh's economy experienced mixed trends in the second quarter (October-December) of FY26, with growth remaining modest amid weak exports, subdued private investment, and tight monetary policy, according to the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI).
In its Review of Economic Situation in Bangladesh: October-December 2025 (Q2 of FY26), the chamber said elevated inflation continued to weigh on economic activities, prompting sustained credit tightening that constrained business expansion.
Although some macroeconomic indicators showed signs of stabilisation, the overall recovery remained fragile during the quarter.
Exports declined slightly during July-December of FY26, falling by 0.54 per cent to $24.40 billion from $24.53 billion in the corresponding period of the previous fiscal year.
The drop was mainly due to weaker performance in knitwear and woven garments, though the apparel sector continued to dominate export earnings with an 80.62 per cent share.
Export earnings in December 2025 fell 7.46 per cent year-on-year.
Imports, however, increased.
The total import payments (C&F) rose by 5.16 per cent to $29.13 billion in July-November of FY26 compared to $27.70 billion a year earlier.
November import payments alone increased 7.83 per cent year-on-year, contributing to a widening trade deficit.
Remittance inflows provided a positive cushion for the external sector.
Workers' remittances stood at $3.22 billion in December 2025, up 22.19 per cent from the same month a year ago.
During July-December of FY26, remittances grew by 18.05 per cent to $16.26 billion.
The rise was attributed to government incentives and efforts to channel funds through formal banking systems, helping strengthen foreign exchange reserves and maintain balance of payments stability.
According to balance of payments data from the Bangladesh Bank (BB), net foreign direct investment inflows increased by 59.95 per cent year-on-year to $651 million during July-November of FY26.
However, the chamber noted that overall foreign direct investment (FDI) levels remained modest compared to the peer economies.
Inflationary pressures persisted.
Point-to-point general inflation rose to 8.49 per cent in December 2025 from 8.29 per cent in November, according to the Bangladesh Bureau of Statistics (BBS).
Food inflation increased to 7.71 per cent, while non-food inflation climbed to 9.13 per cent.
Although inflation was lower than the 10.89 per cent recorded in December 2024, it remained well above the government's 6.5 per cent target for FY26.
Sectoral data shows mixed outcomes.
Agriculture employed around 44 per cent of the country's labour force and accounted for 9.84 per cent of gross domestic product (GDP) in Q1 of FY26, down from 12.82 per cent in Q4 of FY25.
Despite favourable weather and policy support, the sector grew by 2.30 per cent in Q1, lower than the 3.02 per cent recorded in the previous quarter.
While the Q2 data for industry is yet to be released, the sector registered 6.97 per cent growth in Q1 of FY26, up from 2.38 per cent in Q4 of FY25.
Its share in GDP rose to 38.34 per cent.
Manufacturing expanded by 6.17 per cent during the same period.
Liquidity conditions in the banking sector improved, with total liquid assets of scheduled banks rising 6.78 per cent to Tk 6260.46 billion at the end of October 2025.
The interest rate spread narrowed slightly to 5.69 per cent in December.
However, the private sector credit growth remained subdued, reflecting cautious investment sentiment.
The country's two bourses -- the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) -- declined on February 5, 2026, amid broad-based selling pressure after several sessions of gains.
Looking ahead to the third quarter (January-March) of FY26, the chamber projected a mixed but gradually improving trend.
Exports are expected to increase steadily to around $4.52 billion by March, while imports may also rise moderately.
Remittance inflows may dip slightly in January before rebounding in the following months, and foreign exchange reserves are likely to continue increasing gradually.
Inflation is projected to edge up in January and February before easing somewhat in March.
The chamber has observed that amid domestic political uncertainty and a challenging global environment, economic indicators are likely to remain mixed in Q3, with cautious improvement in the external sector offering some support to overall stability.
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