Bangladesh Economy Expands in December as PMI Rises

Bangladesh’s economy maintained its expansionary momentum in December as the overall Purchasing Managers’ Index (PMI) edged up, signalling a modest acceleration in business activity driven by growth in agriculture, manufacturing and services.

The PMI rose by 0.2 points from November to 54.2 in December, remaining well above the 50-point threshold that separates expansion from contraction.

The latest PMI report shows that economic activity continued to improve despite persistent challenges, offering timely insights into overall business conditions for investors, businesses and policymakers.

According to the report, agriculture recorded its fourth consecutive month of expansion, with growth strengthening further in December. New business, overall activity, employment and input costs all rose at a faster pace, although order backlogs contracted more sharply, pointing to ongoing capacity pressures.

Manufacturing stayed in expansion for the 16th straight month, though growth eased slightly compared to November. Most key indicators—including new orders, export orders, production, input purchases, imports, prices and employment—remained in positive territory. The finished goods index returned to expansion, while order backlogs continued to shrink, albeit more slowly.

In contrast, the construction sector slipped back into marginal contraction after three months of growth. New business declined at a faster rate, while activity and employment growth softened. Input costs rose slightly faster, and order backlogs contracted for the fifth consecutive month, though at a moderated pace.

The services sector posted its 15th consecutive month of expansion, with a slight uptick in overall growth. Employment and input costs remained in expansion, but new business, activity and order backlogs stayed in contraction, reflecting uneven demand conditions.

The report noted that overall business sentiment remained subdued due to political uncertainty, seasonal demand slowdown, rising production costs, price volatility and weak sales. However, many respondents expressed cautious optimism, expecting gradual improvement from early next year.

Looking ahead, the future business index pointed to slower but continued expansion across all major sectors, suggesting restrained confidence among businesses.

Policy Exchange Bangladesh Chairman and CEO Dr M Masrur Reaz said the latest PMI figures indicate marginal economic expansion, largely supported by strong agricultural performance.

“Manufacturing has slowed for a second consecutive month, while construction has returned to contraction. However, the future business index remains in expansion across all sectors, signalling continued optimism and growth momentum in the post-election period,” he said.