Economic recovery still fragile: MCCI

Bangladesh’s economy remains under pressure, with stability improving gradually, but the recovery is still fragile, the Metropolitan Chamber of Commerce and Industry (MCCI) said today.

In its review of the economic situation during October-December of fiscal year 2025-26, the leading chamber said strong remittance inflows supported foreign exchange reserves and helped maintain overall balance of payments stability, despite a widening trade deficit.

During the quarter, the economy showed mixed performance.

“Growth remained modest, weighed down by weak exports, subdued private investment, and tight monetary policy. Inflation stayed elevated, prompting continued credit tightening, which further constrained business activity,” the MCCI said.

The report said the agriculture sector, which employs about 44 percent of the country’s total labour force, recorded growth of 2.3 percent in the first quarter of FY26, down from 3.02 percent in the previous quarter, despite favourable natural conditions and strong government support through the timely supply of inputs and finance.

The industrial sector, the second-largest contributor to gross domestic product after services, registered growth of 6.97 percent in the first quarter of FY26, up from 2.38 percent in the previous quarter.

The services sector grew 3.67 percent in the first quarter of FY26, compared to 2.51 percent in the previous quarter, or the fourth quarter of FY25.

Exports declined 0.54 percent to $24.4 billion in July-December of FY26 from $24.53 billion in the same period of FY25, the MCCI said.

“This downward trend was mainly fuelled by the depressing performance of both knitwear and woven garments,” it said.

However, the apparel sector, comprising knitwear and woven garments, continued to dominate exports, accounting for 80.62 percent of the total.

In July-November of FY26, imports rose 5.16 percent to $29.13 billion from $27.70 billion in the same period of FY25.

Import payments in November 2025, the last month of the review period, increased 7.83 percent year-on-year.

Remittance inflows soared 18.05 percent year on year in July-December of FY26, supported by government measures such as higher cash incentives, streamlined regulations and efforts to boost formal transfer channels.

The MCCI said the economy is trying to overcome difficulties stemming from the present political uncertainty and the conflicting global scenario.

“Therefore, the performances of the selected economic indicators are mixed.”

Going forward, it said exports, imports and foreign exchange reserves may increase in the next three months.