The government has approved signing an Economic Partnership Agreement (EPA) with Japan, securing duty‑free access for 97 per cent of Bangladesh’s exports including key garment items, marking the country’s first full‑fledged trade deal with a major partner (Mirdha, 2026).
In January 2026, the World Bank cut Bangladesh’s FY2026 GDP growth forecast to 4.60 per cent, while also mentioning that reduced political uncertainty following the general election, along with the anticipated implementation of structural reforms by the new government, would help strengthen industrial activity in FY2027 (World Bank, 2026).
Export performance deteriorated during July–January FY2026, registering a negative year-on-year growth of 1.93 per cent, mainly due to a slowdown in RMG exports. Monthly exports also declined by 0.50 per cent year-on-year to USD 4.41 billion for the month of January 2026 (EPB, n.d.).
Headline inflation continued to decline to 8.66 per cent in January 2026, driven by a slowdown in food prices, as food inflation fell to 7.97 per cent. However, the slow pace of decline in non-food in-flation, combined with declining wage growth of 8.12 per cent, continues to weaken household pur-chasing power and reduce real incomes.
Authors: Muntaseer Kamal and Md. Imran Nazir
Series Editor: Dr Fahmida Khatun
Publication Period: January 2026
