Credit rating agency Moody’s has sounded a note of caution on Bangladesh, warning that the country faces economic headwinds amid the ongoing political
unrest.

“Prolonged social unrest could continue to weigh on domestic consumption, which accounted for about 66 per cent of GDP in the past five years,” said a Moody’s report.

The agency expects Bangladesh’s GDP growth to moderate to 5.5-6 per cent in the fiscal year ending June 2025, citing persistent inflation and falling real wages.

“Inflationary pressure since mid-2022 persists, which has led to a curb in domestic consumption and a decline in real wages,” the report stated.

Moody’s also highlighted potential risks to the banking sector. “A reduction in remittances will in turn reduce banks’ foreign currency liquidity, which accounts for a significant portion of banks’ liquid assets,” the report warned.

“Bangladesh’s external position remains vulnerable,” according to Moody’s.