Over-reliance on Middle East fuel poses risk to economic growth: Finance minister

Bangladesh's heavy dependence on Middle East-based energy supplies has created a major risk for the country's economic growth, Finance Minister Amir Khosru Mahmud Chowdhury said today (6 April).

"Uncertainties in the essential commodity supply chain, including energy security caused by recent global war situations, could make achieving growth forecasts challenging," he said while presenting the budget implementation progress report for the first quarter of the current 2025-26 fiscal year in parliament.

During his address, the minister emphasised that addressing the severe economic challenges left behind by eighteen years of financial mismanagement and looting is now a primary goal, alongside improving living standards and increasing employment opportunities. 

Noting that while the global economy showed signs of recovery from the instability of the last five years, the minister warned that recent global volatility, including the Iran-Israel conflict, could make the economic path ahead even more difficult.

Citing forecasts from the International Monetary Fund, the minister mentioned that growth in advanced economies is expected to stabilise at 1.7% in 2025, while emerging and developing Asian countries may see growth near 5%. 

Global inflation, which was 8.7% in 2022, is projected to drop to 4.2% in 2025 and 3.8% in 2026. 

He noted that inflation in China and India – Bangladesh's primary import sources – is expected to remain near 2% and 4% respectively, which should assist in controlling domestic inflation.

Regarding domestic performance, the minister explained that while contractionary policies aimed at controlling high inflation slowed GDP growth in the 2024-25 fiscal year, recent government initiatives are expected to revitalise the economy. 

He highlighted that food grain stocks remain satisfactory and duty concessions on imports are helping manage prices. 

Data from the first quarter of the current fiscal year shows an increase in production across large, medium, and small industries. 

Additionally, during the July-September period, remittance and export earnings grew by 15.94% and 5.26% respectively compared to the previous year.

By the end of September 2025, general inflation stood at 9.45%, with food inflation at 9.58% and non-food inflation at 9.33%. 

To bring these numbers down, the government has implemented various measures including contractionary monetary policy and the cancellation of less important projects. 

The government has set a target to reduce average inflation to 7% in the current 2025-26 fiscal year, with further targets of 6%, 5.5%, and 5% for the subsequent three fiscal years, alongside an expected acceleration in GDP growth.