Global, Asia, and Bangladesh Economic Forecast 2025–2035

Executive Summary

The global economy is navigating a period of profound transformation marked by persistent short-term disruption and heightened uncertainty. Based on integrated analysis of forecasts from the IMF, World Bank, OECD, ADB, and World Economic Forum, this report presents a detailed outlook for the period 2025–2035.

Global growth is projected to slow to 3.2% in 2025 and 3.1% in 2026, down from 3.3% in 2024, due to increased trade barriers, policy uncertainty, and geopolitical tensions. Asia-Pacific remains a growth leader but faces headwinds from trade fragmentation, with growth expected at 4.3% in 2025 and 4.2% in 2026.

Bangladesh, however, is poised to outperform regional peers with growth around 6.5% annually, driven by export diversification, demographic dividends, and infrastructure investments. By 2035, Bangladesh could emerge as a middle-income economy with a more knowledge-driven structure, provided it addresses governance, skills, and climate challenges.

Global Economic Outlook

The global economy is experiencing a significant slowdown after the post-pandemic recovery. According to the IMF and World Bank, global GDP growth is projected to decelerate to 3.2% in 2025 and 3.1% in 2026, down from 3.3% in 2024, due to heightened trade policy uncertainty and increased tariffs.

The OECD notes that effective U.S. tariff rates have risen to nearly 19.5%, the highest since the 1930s, disrupting supply chains and dampening investment. Inflation is expected to moderate globally to 2.9% in 2025 and 2.5% in 2026, but remains elevated in some advanced economies like the U.S. due to pass-through effects of tariffs.

Structural Shifts Reshaping the Global Landscape:

• AI and Technology: Rapid adoption of artificial intelligence is boosting productivity in advanced economies but may widen digital divides.
• Energy Transition: Climate policies and green investments are accelerating, but fossil fuel dependency persists in emerging markets.
• Demographic Changes: Aging populations in advanced economies contrast with youth bulges in developing regions.
• Reshoring and Trade Fragmentation: Geopolitical tensions are prompting supply chain reorganization.

Asia-Pacific Outlook

Asia-Pacific remains the engine of global growth but faces mounting challenges. The ADB projects growth for East Asia at 4.3% in 2025 and 4.2% in 2026, while South Asia grows at 5.9% in 2025 and 6.0% in 2026, though these are revised downward from April due to trade tensions.

China's growth is forecast at 4.9% in 2025 and 4.4% in 2026, slowed by property sector woes and trade disputes. India outperforms with 6.5% growth in 2025, driven by domestic demand, but US tariffs pose risks. ASEAN economies like Vietnam and Indonesia show resilience due to supply chain diversification.

Key Regional Dynamics:

• Supply Chain Reorganization: Trade diversion benefits Vietnam, Malaysia, and Bangladesh as firms shift production from China.
• Green Finance: Asia leads in renewable energy investments, with China and India scaling up solar and wind capacity.
• Innovation Ecosystems: Tech hubs in Singapore, Bangalore, and Shenzhen drive digital transformation.

Bangladesh Economic Forecast (2025–2035)

Bangladesh has emerged as a growth standout in South Asia, with GDP growth averaging 6.5% annually over the past decade. Based on ADB and World Bank data, growth is projected at 6.5% in 2025 and 6.5% in 2026, supported by robust exports, remittances, and domestic consumption.

By 2035, under a baseline scenario, growth could stabilize at 7% annually, propelled by demographic dividends, infrastructure upgrades, and export diversification. An optimistic scenario assumes 8% growth with deeper reforms and FDI inflows, while a pessimistic scenario sees growth at 5% if governance and climate challenges intensify.

Key Macroeconomic Indicators:

• Inflation: Expected to ease to 5.5% in 2025 from 6.0% in 2024, per ADB projections.
• Current Account: Deficit narrows due to rising remittances and garment exports.
• Fiscal Balance: Deficit remains around 5% of GDP, financed by domestic borrowing and aid.
• Remittances: Grow by 8% annually, reaching $30 billion by 2030.

Future Growth Sectors

Bangladesh's economy is transitioning from agriculture to industry and services. Future growth will be driven by several key sectors:

Key Growth Sectors:

• RMG 2.0: The ready-made garment sector evolves into high-value fashion and technical textiles, leveraging sustainability trends. Exports could double to $60 billion by 2030.
• ICT and Digital Finance: Tech startups and fintech adoption accelerate, with the digital economy contributing 10% to GDP by 2035.
• Green Energy: Solar and wind investments expand, supported by policy incentives; renewable capacity may reach 5 GW by 2030.
• Pharmaceuticals: Domestic production meets 80% of demand, with exports growing to regional markets.
• Agro-processing: Value addition in fisheries, fruits, and organic foods taps into global health trends.
• Logistics: Port and transport infrastructure improvements reduce costs and boost trade.

Labor Market & Future Jobs

Bangladesh's labor market faces dual challenges of creating jobs for a youth bulge and adapting to automation. The workforce grows by 2 million annually, but unemployment remains at 4.5% with underemployment high.

Based on WEF Future of Jobs report, skills demand is shifting from routine manufacturing jobs to tech roles in data analytics, AI, and cybersecurity. Green skills for renewable energy and sustainability experts are also in growing demand.

Top In-Demand Skills by 2030:

• Data Analytics (Demand Score: 90/100)
• AI Literacy (85/100)
• Sustainability Management (80/100)
• Digital Marketing (75/100)
• Soft Skills (70/100)

Skills mismatch is evident: 30% of graduates are unemployed due to lack of industry-relevant skills. Vocational training and education reform are critical to address this gap.

Foreign Direct Investment & Business Climate

Bangladesh's FDI inflows have grown steadily, reaching $3.5 billion in 2024, but lag regional peers like Vietnam ($15 billion). The World Bank's Doing Business Report ranks Bangladesh 128th, highlighting bottlenecks in infrastructure, governance, and regulatory complexity.

However, policy incentives such as export processing zones (EPZs), special economic zones (SEZs), and public-private partnerships (PPPs) are improving attractiveness. Key sectors for FDI include energy, ICT, and manufacturing.

Comparative FDI Inflows in 2024 ($ billion):

• India: $60.0
• Indonesia: $25.0
• Vietnam: $15.0
• Bangladesh: $3.5

To enhance FDI, Bangladesh needs to address infrastructure gaps, simplify regulations, and improve governance transparency. The government's "Digital Bangladesh" initiative and infrastructure projects like the Padma Bridge are steps in the right direction.

Strategic Recommendations

For Foreign Investors:

• Prioritize sectors with high growth: ICT, green energy, and pharmaceuticals.
• Partner with local firms through joint ventures to navigate regulatory hurdles.
• Mitigate risks via political risk insurance and diversification.

For Policymakers:

• Improve ease of doing business by simplifying regulations and digitizing services.
• Invest in education and vocational training to address skills mismatch.
• Enhance climate resilience through coastal infrastructure and renewable incentives.

For Job Seekers:

• Acquire tech skills (e.g., coding, AI) through online courses and certifications.
• Pursue roles in emerging sectors like e-commerce and renewable energy.
• Develop soft skills through internships and networking.

Conclusion

Bangladesh stands at a pivotal moment: with strategic reforms, it can harness its demographic dividend and geographic location to become a middle-income economy by 2035. Global headwinds from trade fragmentation and climate change require agile policy responses.

By fostering innovation, improving governance, and attracting investment, Bangladesh can not only achieve sustained growth but also serve as a model for other developing economies. The next decade will define its trajectory—toward inclusive prosperity or missed opportunities. The time for action is now.