Bangladesh's economy is expected to rebound and clock 7.1 percent growth in fiscal 2025-26 driven by exports and remittances, according to the HSBC Global Research report.

Both exports and remittances are showing positive signs despite the ongoing challenges in the global economy, the HSBC said in a statement following a webinar on economic outlook organised by the British multinational bank's Dhaka office recently.

At the event, Chief Asia Economist and Co-Head of HSBC Global Research Asia Frederic Neumann said even though Bangladesh's GDP growth rate has been set to a revised 4.5 percent for fiscal FY25, the country will rebound to 7.1 percent.

He said the garment sector, which accounts for 83 percent of the country's exports, is expected to grow by the demand from international markets.

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"At the same time, imports, which had been strained by rising global energy prices, are now stabilising reflecting a recovery in domestic demand and easing cost pressures," he said.

The official said remittances are anticipated to grow driven by improved employment conditions in key overseas markets.

"This rise in remittances will not only support household consumption but play a significant role in sustaining the broader economic recovery."

However, Neumann said challenges remain, particularly with inflation.

"This will continue to affect both household spending and business costs."

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Structural reforms in the banking sector and efforts to control inflation will be essential for unlocking Bangladesh's full economic potential and ensuring long-term, sustainable growth, according to the HSBC.

"Bangladesh is already well on its way to recovery. Macroeconomic adjustments undertaken in recent months, and robust economic fundamentals, should pave the way for growth to rebound over the coming year. A rapid implementation of reforms would help to speed up the process further," said Neumann.

Md Mahbub ur Rahman, chief executive officer, HSBC Bangladesh; and Gerard Haughey, country head of wholesale banking for HSBC Bangladesh, also attended the webinar along with almost 300 clients and stakeholders.