Global credit rating agency Fitch Ratings has revised Bangladesh’s economic outlook to “Negative” from “Stable” while affirming the country’s Long-Term Issuer Default Rating at “B+”, citing rising vulnerabilities linked to the Middle East conflict and slow progress in reforms. In its latest assessment released from Hong Kong on Wednesday, Fitch said Bangladesh faces growing external financing and macroeconomic risks due to its heavy dependence on Middle Eastern remittances and energy imports.

The agency noted that nearly half of Bangladesh’s remittance inflows come from the Middle East, while crude oil and petroleum products account for around 15 percent of total imports, making the economy highly vulnerable to prolonged regional instability. Fitch also expressed concern over limited progress in reforms related to public finances, banking sector governance and institutional independence, saying weak governance standards are gradually reducing the country’s ability to absorb economic shocks.

The rating agency warned that uncertainty surrounding the continuation of the IMF programme, widening fiscal deficits, high inflation and pressure on foreign exchange reserves could further weaken Bangladesh’s economic outlook.

Fitch projected Bangladesh’s economic growth at 3.7 percent in FY26 and 3.5 percent in FY27, while inflation is expected to remain elevated at around 9 percent. The agency also highlighted mounting stress in the banking sector, noting that non-performing loans rose to 30.6 percent by the end of 2025, particularly among state-owned banks.