[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Economy on path to recovery: experts

Bangladesh’s economy is recovering after months of slowdown, with stability returning and confidence growing across various sectors, according to experts.

www.thedailystar.net

Economy on path to recovery: experts

Bangladesh's economy is recovering after months of slowdown, with stability returning and confidence growing across various sectors, according to experts.

Speaking at the launch of the inaugural edition of the Monthly Macroeconomic Insights (MMI) by the Policy Research Institute of Bangladesh (PRI) at its Banani office yesterday, experts and economists expressed cautious optimism about the country's economic trajectory.

The MMI, a new analytical initiative by PRI's Center for Macroeconomic Analysis (CMEA), has been developed with support from the Australian Department of Foreign Affairs and Trade (DFAT).

"The economy is on a recovery path," said Ashikur Rahman, principal economist at PRI, calling it a pivotal phase marked by cautious optimism.

He termed the dissolution of the National Board of Revenue (NBR) and the Bank Resolution Order Ordinance 2025 as bold and timely steps by the interim government.

He said these reforms aim to ensure institutional clarity and long-term economic stability.

Addressing the event, Anisuzzaman Chowdhury, special assistant to the chief adviser, emphasised an urgent need to rebuild Bangladesh's social capital alongside reinforcing its economic foundations.

He remarked that while the country has progressed significantly in infrastructure and financial capacity, the erosion of social cohesion and public trust now poses a deeper, long-term threat.

"We need hard reforms and honest reflection," he said. "We are not poor in financial terms alone; our social fabric is also under strain."

Drawing from his early life experiences, Chowdhury reflected on how countries like South Korea and Japan overcame hardship through strategic vision, coordinated reforms, and long-term commitment.

"They didn't just push reforms -- they fixed goals and stayed the course. That's what we need."

Regarding Bangladesh's upcoming graduation from the least developed country (LDC) club, he called it both a challenge and an opportunity. "It's not just about metrics. Without a clear vision, reforms alone won't deliver. We need policy coherence."

He also pointed out that high interest rates, low investor confidence, and disjointed policies are hampering economic diversification. "Why invest in capital markets when banks offer 12 percent with less risk?"

Md Habibur Rahman, deputy governor of Bangladesh Bank, said Bangladesh's economic indicators are showing signs of gradual stability, driven by improvements in the current account and balance of payments.

"Exchange rate liberalisation will benefit Bangladesh on multiple fronts," he said.

He added that the macroeconomic situation has become more comfortable over the past nine months.

Rahman emphasised that despite recent turbulence, the country's fundamentals remain strong and resilient.

He stressed the importance of signalling confidence to the international community and said measures are in place to protect foreign exchange reserves and manage external pressures effectively, positioning Bangladesh for continued recovery.

Upon reviewing the economic growth scenario, Zaidi Sattar, chairman of PRI, pointed out that in the current year, macroeconomic stability has been restored, and the economy is poised to return to a higher growth trajectory.

"Our export potential is hobbled by a highly protective tariff regime that creates a persistent anti-export bias in policy incentives," he added.

Clinton Pobke, deputy head of mission at the Australian High Commission in Bangladesh, emphasised Australia's commitment to strengthening economic engagement with Bangladesh through a multi-pronged approach encompassing policy reform, trade and investment, and support for public policy discourse.

Speaking at the launch of the new initiative in collaboration with the PRI, Pobke expressed his appreciation for the quality of economic analysis presented.

Outlining Australia's three-track strategy, Pobke explained, "One track focuses on support for policy reform, another on enhancing bilateral trade and investment, and the third on strengthening the policy debate space in Bangladesh."

On trade and investment, Pobke highlighted a recent milestone. "In February, we appointed our first Australian Trade and Investment Commissioner based in Dhaka -- a major step forward."

He also announced the upcoming "Bangladesh-Australia Business Expo 2025" in Sydney, where he hopes to see strong bilateral participation.

Shams Mahmud, president of the Bangladesh-Thai Chamber of Commerce and Industry, said that businesses are currently operating primarily for the benefit of banks and the NBR, while entrepreneurs themselves are struggling to make profits.

Despite positive export figures, he said the business environment remains unfavourable due to persistent inflation and elevated bank interest rates.​

 

[Saif]

BD's move to join trade blocs

Rising protectionism and tariff wars among the world's leading economies in recent years have put the case for multilateralism at a disadvantage. Encouraging local manufacturing by reducing reliance on imported goods or the so-called policy of import substitution might now gain a stronger ground. U

thefinancialexpress.com.bd

BD's move to join trade blocs
Published :
May 17, 2025 00:54
Updated :
May 17, 2025 00:54

Rising protectionism and tariff wars among the world's leading economies in recent years have put the case for multilateralism at a disadvantage. Encouraging local manufacturing by reducing reliance on imported goods or the so-called policy of import substitution might now gain a stronger ground. Unfortunately, the opposite is true. No doubt, high tariffs on imported items raise relative profitability of industries serving the domestic market in the short run. But in the long run, it hampers production for overseas markets, that is, exports. Obviously, for an economy highly dependent on export, the existing policy of high tariffs on imports has created an uneven playing field for Bangladeshi exporters when competing in global markets.

The issue again came to the fore when the ADB chief economist Albert Park was talking to this paper on the sidelines of the multilateral donor agency's recently held annual meeting at an overseas location. In fact, the ADB economist made no bones about the fact that other countries are unwilling to reach both bilateral and multilateral trade arguments with Bangladesh. But the fact that high internal tariff is a number one stumbling block to Bangladesh's expanded trade relations with many international and regional trade blocs is not a realization brought home for the first time. The issue came up on multiple occasions at discussions forums where local experts pointed out that Bangladesh's average nominal tariffs are higher than those in other low-income, middle income and high income countries. The nominal tariff, for instance, is 27.6 per cent in Bangladesh which is higher than many of its neighbouring economies such as India where it is 18.1 per cent and in Sri Lanka 22.4 per cent. But it cannot also be said that those South Asian neighbours have liberal tariff regimes. To tell the truth, their differences, when it comes to liberal tariff policies, are just a matter of degree compared to Bangladesh. So, it is not hard to understand why the South Asian Association for Regional Cooperation (SAARC) could not succeed even four decades after its inception. However, intense political rivalries between two nuclear members, India and Pakistan, are no less to blame for SAARC's stunted growth.

By comparison, the South East Asian economies like Thailand, Vietnam, Malaysia and Indonesia with their 9.7 per cent, 9.6 per cent, 5.6 per cent and 8.0 per cent nominal tariffs are indeed better placed than Bangladesh in reaching mutually beneficial deals with their regional competitors. Small wonder that the 10-member ASEAN with a total GDP of US$4.249 trillion and a population of 683.29 million is a mammoth economic bloc sharing some 8.0 per cent of the global export. Bangladesh could have immensely benefited by being a member of such forward looking trade blocs known for less protectionist trade policies.

The good news is Bangladesh has shown interest, thanks to Chief Adviser, Dr Muhammad Yunus's overture to Malaysia's diplomatic mission in Bangladesh soon after his assumption of office in late August last year, to join ASEAN. Also, Bangladesh's effort to join the Regional Comprehensive Economic Partnership (RCEP) to retain preferential trade access to major markets like China, Japan, South Korea and the ASEAN countries after its LDC graduation in 2026 is also commendable. However, while making these moves to join less protectionist trade blocs, Bangladesh should also redouble its efforts to widen and diversify its export basket. Out of its some 1,377 non-RMG export items, 174 are highly competitive. What is urgent is to proactively develop and explore the overseas markets for these products.​

 

[Saif]

Forex reserves stand at $25.44b: Bangladesh Bank

Bangladesh's foreign exchange reserves have stood at $25.44 billion. But, as per the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), Bangladesh's foreign exchange reserves stood at $20.07 billion, BSS reports citi

thefinancialexpress.com.bd

Forex reserves stand at $25.44b: Bangladesh Bank

Published :
May 19, 2025 20:04
Updated :
May 19, 2025 20:06

Bangladesh's foreign exchange reserves have stood at $25.44 billion.

But, as per the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), Bangladesh's foreign exchange reserves stood at $20.07 billion, BSS reports citing a Bangladesh Bank press release.​

 

[Saif]

Division of NBR was not done properly: Debapriya Bhattacharya

Debapriya Bhattacharya, a distinguished fellow at the private research organisation Centre for Policy Dialogue (CPD), criticised the process of dividing the National Board of Revenue (NBR) into two divisions. “It was right to divide the National Board of Revenue into two parts. This was also...

en.prothomalo.com

Division of NBR was not done properly: Debapriya Bhattacharya
Staff Correspondent Dhaka
Published: 19 May 2025, 22: 13

CPD’s distinguished fellow Debapriya Bhattacharya addresses a dialogue titled “Policy reforms and the upcoming national budget” organised by Citizen’s Platform at a Gulshan hotel in Dhaka on 20 May 2025 Prothom Alo

Debapriya Bhattacharya, a distinguished fellow at the private research organisation Centre for Policy Dialogue (CPD), criticised the process of dividing the National Board of Revenue (NBR) into two divisions.

“It was right to divide the National Board of Revenue into two parts. This was also recommended in our white paper. But the way it has been done is not right,” he said at an event on Monday.

According to him, the method of division was flawed as it reduced the space for professionals without proper discussion and maintained excessive control over other autonomous areas.

Ensuring a proper division has become a critical issue now, he remarked.

Debapriya Bhattacharya made these remarks today at a dialogue titled “Policy reforms and the upcoming national budget” organised by Citizen’s Platform at a Gulshan hotel in Dhaka.

During the dialogue, the CPD distinguished fellow pointed out that during the previous government, those involved in kleptocracy or systemic looting included politicians who have now fled, while business groups are not so active now. However, bureaucrats have been revitalised.

Mentioning the government’s lack of attention to economic reform, he said, “Our general concern is that while the government focuses significantly on other reforms, we do not see the same level of attention given to economic reforms. This is a major issue, and they fail to realise that if there is no stability in the economy, no other reform can be sustainable.”

Despite so many shortcomings and inconsistencies, Debapriya Bhattacharya thinks that the implementation of the budget will largely depend on four factors: the outcome of the ongoing dialogue on national unity, a clear roadmap regarding the election, whether the promised justice will be delivered before or after the elections, and the overall situation of law, order, and security.

He further stated, “The current components necessary for investment are not very encouraging. As a result, employment is not increasing. The rate of wage growth for workers is below the rate of inflation, which means their real income is declining. Therefore, we cannot firmly say that the economy is on a way to recovery.”

The chief guest at the event was Anisuzzaman Chowdhury, special assistant to the Chief Adviser, and the special guest was Amir Khasru Mahmud Chowdhury, a standing committee member of the Bangladesh Nationalist Party.​

 

[Saif]

How is the economy doing?

The silver lining is that the economy isn’t falling apart

www.thedailystar.net

How is the economy doing?
The silver lining is that the economy isn’t falling apart

Globally celebrated American musician's lyrics, "the answer, my friend, is blowing in the wind," might provide a poetic response—though not entirely. A portion of the answer about Bangladesh's economic trajectory can indeed be gleaned from tangible and verifiable realities.

The "blowing" element captures the uncertainty surrounding where the economy is heading. This uncertainty stems less from Bangladesh's economic fundamentals—like resource endowments, technology, geography, or culture—and more from profound unpredictability both locally and globally.

Not surprisingly, from the perspective of history, given the sudden political shift in August 2024, Bangladesh is yet to cohesively unite social forces in a way that drives sustained development. The silver lining is that the economy isn't falling apart. It has, in fact, managed to recover remarkably, coming from behind on several fronts amidst deep fragilities and hard bumps.

The point of departure

The post-August 5 political regime inherited an economy grappling with severe distress across multiple fronts. Concrete evidence of this distress was visible in data reflecting quarterly GDP growth, monthly inflation trends, escalating prices of staples like food and medicine, forex reserves held by Bangladesh Bank and domestic banks, rising non-performing loans, deteriorated assets in the banking system, accumulated arrears in the energy sector, mounting interest expenditures within the government budget, and the composition and scale of the government's domestic and public debt.

The White Paper dismantled the overly optimistic development narrative left by the previous regime. It presented a data-driven analysis of an economy stuck in a low middle-income trap, plagued by stagnating investment rates (quality concerns notwithstanding), a narrow manufacturing base reliant on an even narrower export sector, a persistently high share of informal production and exchange, a growing pool of youth excluded from employment, education, and training opportunities, a declining tax intensity falling below peer benchmarks, entrenched rent-seeking in markets, and systemic corruption in public service delivery.

Yes, Bangladesh did face significant spillovers from successive global crises. High inflation, tight financial conditions, a stronger US dollar, and weak activity in large economies amid heightened geopolitical tensions have characterized the post-pandemic global landscape. But the real question is why Bangladesh, unlike many of its peers in South and East Asia, fared so poorly in responding to these challenges. This is attributable largely to domestic policy failures.

Recovery and stabilisation

Over the past nine months, Bangladesh's economic path has been marked by a mix of progress and enduring hurdles. Gradual improvements in key indicators have emerged despite Dhaka—the centre of Bangladesh's economic gravity—being mired in regular demonstrations, often bringing disruptions to daily life and traffic, almost as if woven into the city's routine.

One of the most noteworthy shifts is the recovery in GDP growth. By the fourth quarter of 2024, GDP expanded to over 4%, a significant improvement from the dismal 2% recorded in the first quarter. Despite being below the historic corrected average of 4.2%, it marks a positive turn driven primarily by industry.

This recovery is mirrored in other indicators of economic activity, such as merchandise exports, which averaged $4 billion per month from July to April in the current fiscal year, compared to $3.4 billion per month last year. Similarly, remittances climbed from $1.75 billion per month to over $2.7 billion per month during the same period, probably reflecting, at least in part, slumping illicit financial outflows. Imports rose from $5.2 billion per month to $5.5 billion per month from July to March. The government was successful in providing uninterrupted electricity, notwithstanding the changed political economy in the sector and frequent gas shortages.

Inflation has decreased by 172 basis points since December, reflecting some easing of price pressures that had been fuelled by high food and energy costs, as well as rising import prices due to the depreciation of the taka and expansionary policies. Signs of relief became evident in the third quarter of FY25. Bangladesh Bank has maintained a firm monetary stance. The real policy rate turned positive in January 2025, marking the first occurrence of such a shift since February 2020.

Forex reserves, which experienced post-Asian Clearing Union lows, have seen a modest rise, with net international reserves consistently hovering in the $15–16 billion range. The narrowing of the current account deficit and persistence of the financial account surplus helped the overall balance of payments deficit to decline. Banking system net forex balances maintained positive daily positions between $200–700 million. Correspondent banking relationships, which faced setbacks in the aftermath of July 36, are gradually normalising. Government arrears have declined steadily. The differential between risky and risk-free interest rates is returning to relative normalcy.

Fragilities and bumps

These improvements coexist with significant underlying issues. Labour market weaknesses persisted through the second quarter of FY25. Both employment and real wages are down, indicating demand weaknesses affecting vulnerable populations disproportionately and widening social and economic disparities. The World Bank's April Bangladesh Development Update projects an additional 3 million people pushed into extreme poverty in 2025.

Weaknesses in labour demand are corroborated by subdued domestic and foreign investments. A historic low of $812 million per month in capital goods imports between July and February FY25 indicates bearish sentiment among investors. Capital goods import degrowth is also persistent in LC opening data. Private credit growth has hit recent lows. The frictional undercapacity in key industries such as textiles, garments, steel, and ceramics—exacerbated by energy shortages—constrains production and employment potential.

Financial distress remains pronounced, afflicting numerous state-owned banks and several private domestic banks. Both revenue collection and expenditure growth have regressed, reflecting systemic speed breakers. Bureaucratic inertia and unpredictably variable regulatory practices continue to hamper effective governance and economic management. The ability to identify problems, make informed decisions, and implement solutions in time is somehow unable to grow to scale in public administration. Corruption is thriving in a culture of impunity the nation is begging to be dented.

Global trade and geopolitical shocks are anticipated to influence FY26 significantly. The extent of these disruptions remains uncertain due to deep and wide policy ambiguity on the international stage. According to the World Bank, the combination of a global economic slowdown and rising inflation could lead to reductions in Bangladesh's exports and real GDP growth by 1.7 and 0.5 percentage points, respectively, compared to earlier forecasts. Despite these headwinds, GDP growth is projected to rise from an estimated 3.3% (World Bank) to 3.9% (IMF) in FY25, to 4.9% (World Bank) and 6.5% (IMF) in FY26.

Rising to the occasion

Bangladesh stands at a juncture where existing rules are being contested, while new ones are yet to emerge. Political change is inevitable, but its form and impact remain uncertain. The economy can never be decoupled from the larger political ecosystem. The shockwaves in this nest make effective macroeconomic management and structural reforms more critical as well as challenging, to unlock sustainable growth, equity, and resilience.

Good economics does not naturally lead to good politics. Policymakers should recognise how economic reforms affect political equations and anticipate resistance from entrenched interests. Long-term economic success depends on building institutions that constrain political actors from making decisions harmful to economic progress. Failure to rise to the post–August 5 occasion to build such institutions will make 2025 a year of missing yet another path-changing opportunity.

Dr Zahid Hussain is a former lead economist of the World Bank's Dhaka office​

 

[Krishna with Flute]

GDP growth target may be revised down to 5.25%

The GDP growth target may be brought down to 5.25 percent in the revised budget for the current fiscal year due to the damage caused by multiple floods and the interim government’s contractionary monetary policy to contain high inflation.

www.thedailystar.net

GDP growth target may be revised down to 5.25%

The GDP growth target may be brought down to 5.25 percent in the revised budget for the current fiscal year due to the damage caused by multiple floods and the interim government's contractionary monetary policy to contain high inflation.

The previous government had set the growth target at 6.75 percent in the original budget.

A discussion on the revised budget for the current fiscal year was held among top officials from the finance, commerce, and planning ministries, as well as Bangladesh Bank, at the Chief Adviser's Office on Tuesday, with Chief Adviser Professor Muhammad Yunus in the chair.

Finance ministry officials said they presented the current macroeconomic indicators and the revised budget during the meeting.

"The growth of the agriculture sector will decrease due to repeated floods at the beginning of the current fiscal year," said a finance ministry official.

Additionally, Bangladesh Bank introduced a tight monetary policy and raised the policy rate, reducing overall GDP growth, he added.

This comes as the World Bank, International Monetary Fund (IMF), and Asian Development Bank (ADB) have also lowered their GDP growth projections for Bangladesh for the current fiscal year.

The ADB has revised its growth forecast for Bangladesh to 5.1 percent from 6.6 percent, citing supply chain disruptions caused by political unrest in July and August.

The World Bank has slashed its growth forecast for the Bangladesh economy by 1.7 percentage points to 4 percent for the fiscal year 2024-25 due to "significant uncertainties following recent political turmoil" and "data unavailability."

The IMF has also revised the growth forecast for Bangladesh for this year, saying political uncertainty, industrial unrest, and floods continue to weigh heavily on economic activities.

In its flagship World Economic Outlook, the IMF lowered Bangladesh's growth projection by 2.1 percentage points to 4.5 percent, the lowest since fiscal 2019-20, when the global coronavirus pandemic struck.

In a visit last December, an IMF delegation revised the growth to 3.8 percent.

The inflation target may rise to 8 percent, up from 6.5 percent in the original budget.

Although the latest data showed that inflation in Bangladesh eased for the second consecutive month in January to 9.94 percent, it remains high.

On Tuesday, Finance Adviser Salehuddin Ahmed said the government was working on reducing inflation to 7 percent by June.​

5.25% is not bad at all provide inflation remains in control.

 

[Krishna with Flute]

One advice to BD. Put solar on large scale. In India, we get the tariff around Rs, 2.25. So BD can get it around 3.5 Taka per unit which is quite good. Install 25000 MW Solar and your industry will boom. Price of electricity is very sensitive in subcontinent. If you are able to provide cheap electricity, half fight is won. Gujarat is planning to install 25000 MW power. Tarriff is likely to be Under Rs. 2. Many private guys with land have install hundreds of KW of power plants. It can give you a return of 40% on investment considering saving of electricity which is around rs. 8 per Unit. However, for selling it to government @Rs 2.75 per unit, you can generate 14.5% ROI. If you can provide cheap electricity to Industries, half of the war is won.

 

[Saif]

One advice to BD. Put solar on large scale. In India, we get the tariff around Rs, 2.25. So BD can get it around 3.5 Taka per unit which is quite good. Install 25000 MW Solar and your industry will boom. Price of electricity is very sensitive in subcontinent. If you are able to provide cheap electricity, half fight is won. Gujarat is planning to install 25000 MW power. Tarriff is likely to be Under Rs. 2. Many private guys with land have install hundreds of KW of power plants. It can give you a return of 40% on investment considering saving of electricity which is around rs. 8 per Unit. However, for selling it to government @Rs 2.75 per unit, you can generate 14.5% ROI. If you can provide cheap electricity to Industries, half of the war is won.

Thank you for the advice. Solar is the way to go.

 

[Saif]

Crisis-resolution consultation flops as govt upholds action

A crisis-resolution consultation between government advisers and the striking revenue officials Tuesday missed a consensus as the interim administration upheld the NBR-bifurcation ordinance under the ongoing reforms in Bangladesh. Leading the government side at the discussion, sources said,

thefinancialexpress.com.bd

Taxmen's pen-down over NBR disbanding

Crisis-resolution consultation flops as govt upholds action

Finance adviser, however, assures safeguard rules in executing bifurcation ordinance

FE REPORT
Published :
May 21, 2025 00:52
Updated :
May 21, 2025 00:52

A crisis-resolution consultation between government advisers and the striking revenue officials Tuesday missed a consensus as the interim administration upheld the NBR-bifurcation ordinance under the ongoing reforms in Bangladesh.

Leading the government side at the discussion, sources said, Finance Adviser Dr Salehuddin Ahmed didn't budge from his position on the newly proclaimed ordinance that stipulates the bifurcation of the National Board of Revenue (NBR) into two separate divisions.

The custodian of exchequer in the post-uprising government, however, assured of addressing, "in greater national interest", the concerns of the revenue-board officials during the framing of rules or other regulations in implementing the ordinance

The ordinance is likely to take effect after the national budget, scheduled for rollout on June 2, 2025.

His comment came after the meeting at the Secretariat with the NBR officials who have been on a pen-down protest on demand that the ordinance, issued on May 12, be rescinded "immediately".

The finance adviser was accompanied by Energy Adviser Md Fouzul Kabir Khan and Environment Adviser Rizwana Hassan at the meeting with some 20 officials of the NBR, including commissioners, first secretaries and second secretaries.

Also present were former NBR members and members of the NBR-reform advisory committee assigned to the task of working out a recast of the revenue board -- one of the recommendations by the IMF.

A number of NBR officials aired their dissatisfaction after the closed-door meeting, claiming that they didn't get any space to explain the reason of their protest.

"We are in the same position as no developments or assurances came from the meeting," said one of the dissenting officials.

Talking to newsmen, the finance adviser reaffirmed his stance on the legal side and said there would be no further formal discussion with the protesting officers.

The advisory committee on NBR reform would talk to them and settle the issue.

"We have requested (them) to stop the protest," he said.

Replying to a query, the finance adviser categorically said, "It doesn't matter what NBR officials are saying or not.

"At implementation stage, we will try to address their concerns."

Meanwhile, hundreds of revenue officials from field-level offices massed on the NBR premises in Dhaka's Agargaon after the meeting with the advisers failed yield any remedies they want.

As such, the protesting officials said they would continue the protest until their demands are met. The protestors had suspended the move only for Tuesday expecting a solution in the meeting with advisers.

Their three major demands are immediate repeal of the ordinance on NBR bifurcation, making NBR- reform advisory committee's report public and initiating NBR reform through stakeholder discussions.

The pen-down strike in revenue offices countrywide affects national trade, import in particular, threatens cargo congestions at ports and also slows down revenue mobilisation close by the time of budget announcement.​

 

[Saif]

Remittance inflow stays strong as expats send $1.61b in 17 days of May

Bangladesh has received US$1.61 billion in inward remittances during the first 17 days of May, marking a robust flow of foreign currency from expatriate workers, according to a revised update from Bangladesh Bank. The data shows that remittances during this period averaged $94.70 million p

thefinancialexpress.com.bd

Remittance inflow stays strong as expats send $1.61b in 17 days of May

Published :
May 20, 2025 18:23
Updated :
May 20, 2025 18:23

Bangladesh has received US$1.61 billion in inward remittances during the first 17 days of May, marking a robust flow of foreign currency from expatriate workers, according to a revised update from Bangladesh Bank.

The data shows that remittances during this period averaged $94.70 million per day, significantly higher than the $75.1 million daily average recorded in May 2024, according to UNB.

A breakdown of the remittance sources reveals that $493.3 million came through state-owned banks, while two specialised state-owned (agricultural) banks channelled $159.9 million.

Private commercial banks facilitated $962.7 million of the total, and foreign banks brought in $313.0 million. Islami Bank registered the highest remittance inflow, receiving $277.8 million.

From July 2024 to May 17 2025, of the current fiscal year, FY25, Bangladesh has received a record $26.14 billion in remittances. This figure surpasses the total of $23.91 billion received during FY24.

Expatriates have already sent $24.54 billion between July and April of FY25, which exceeds the previous fiscal year's full-year figure. Monthly inflows over these ten months reflect consistent growth:

April: $2.75 billion
March: $3.29 billion
February: $2.53 billion
January: $2.19 billion
December: $2.64 billion
November: $2.2 billion
October: $2.39 billion
September: $2.4 billion
August: $2.22 billion
July: $1.91 billion

The steady rise in remittance inflow continues to bolster Bangladesh's foreign exchange reserves and contributes significantly to the national economy, experts said.​

 

[Saif]

Importance of economic governance

While speaking at a discussion meeting titled "Bangladesh Economy 2025-26: Policy Reform and National Budget", a number of leading economists of the country have recognised slight improvement in inflation and stability in the foreign exchange market but felt disappointed at the interim government's

thefinancialexpress.com.bd

Importance of economic governance
FE
Published :
May 22, 2025 00:23
Updated :
May 22, 2025 00:23

While speaking at a discussion meeting titled "Bangladesh Economy 2025-26: Policy Reform and National Budget", a number of leading economists of the country have recognised slight improvement in inflation and stability in the foreign exchange market but felt disappointed at the interim government's failure to effect any structural construct and improved governance in the economic sector. The economic reforms and strategies recommended in the white paper and the task force report respectively have been ignored, they complain. Essentially, the economists including Dr Debapriya Bhattacharya, head of the 12-member committee responsible for preparing the white paper on Bangladesh's economy, and other members of the committee have raised the issue of leadership in the financial sector at a time when Bangladesh finds itself at a crossroads. A highly challenging time demanded a bold and innovative recipe for initiating the process of economic transformation if not an outright turnaround by this time.

Such an active, innovative, dynamic and strategic shift is missing. The spirit of the July-August uprising backed such a paradigm shift in economic transformation but this has not happened. Why the interim government could not do justice to the hope reposed in them is their overreliance on the bungling bureaucracy. Dr Debapriya has cited a specific example on this. According to him, of the nexus of looters of national wealth, corrupt 'politicians have fled, business groups have become subdued and the bureaucrats have now reinvigorated'. It is quite natural that the bureaucrats have become accustomed to seeing not much merit in any radical shift in economic policy formulation and implementation. The kind of structural transformation needed to reduce or eliminate anti-equity bias is unlikely to be favoured by the bureaucracy known for maintaining status quo because their interests, sometimes unholy, are best served in the process. They consider a pro-people stance a threat to their lofty and secure position.

It is exactly at this point, a more dynamic leadership was in demand for lifting economy from the morass largely a creation of the previous government of Sheikh Hasina. The economists feel aggrieved because to them economic reform should have received the highest priority but, they allege, it has not. If economy wobbles providing no comfort for the nation, other reforms which allegedly are getting higher priority will not be sustainable, they warn. Economic reform directed towards narrowing the yawning gap in wealth distribution and income can certainly address social inequality and disparities.

However, it is a daunting task for any government, let alone an interim one. This world has witnessed the crumbling of socialist economy in former Soviet Union, other East European countries and China to the cheer of market economy that encourages private entrepreneurship and business conglomeration. Perhaps a middle way allowing both big private manufacturing units and businesses to flourish and small and medium enterprises (SMEs) at the grassroots level to take roots with government backing may be an appropriate answer to the economic dilemma. The unemployed figure of 3.02 million recorded in the last quarter of 2024 may reinforce the compulsion for a happy combination of productive sectors in order to create employment. But this has to be complemented by streamlining education, particularly technological and technical types, along with improvement of law and order situation in the country.​

 

[Saif]

Forex reserves expected to reach $30b by June

Bangladesh's foreign-exchange reserves may rise to US$30 billion in a gross account by June, up from the current stock of around $27 billion, in a steady economic rebound, predicts the Bangladesh Bank Governor. While expressing such optimism Wednesday, Dr Ahsan H Mansur noted that getting to

thefinancialexpress.com.bd

Forex reserves expected to reach $30b by June
BB Governor pins his hope on rise in remittance, export earnings, foreign financing

FE REPORT
Published :
May 22, 2025 00:29
Updated :
May 22, 2025 00:29

Bangladesh's foreign-exchange reserves may rise to US$30 billion in a gross account by June, up from the current stock of around $27 billion, in a steady economic rebound, predicts the Bangladesh Bank Governor.

While expressing such optimism Wednesday, Dr Ahsan H Mansur noted that getting to this goal would require improvements in the balance of payments, rise in net foreign assets, and reactivation of the economy through stronger remittance inflows, export earnings, and foreign financing.

The governor made the remarks while speaking as the chief guest at a dissemination event on 'Spatial and Historical Financial Development in Bangladesh', organised at a Dhaka hotel by the Policy Research Institute (PRI) in collaboration with the central bank.

"Some progress has already been made - reserves have started growing - and we expect them to rise further in the coming days," said the BB governor, Ahsan H Mansur, adding that the long-term goal is to raise reserves to $40 billion, although reaching that target will take time.

He stresses greater automation and reduced operating costs in financial institutions, warning that the microcredit system may not be sustainable in the long run due to the sector's high lending rates.

Dr Md Habibur Rahman, Deputy Governor of Bangladesh Bank, attended the event as the special guest, while Dr Nasiruddin Ahmed, former Chairman of the National Board of Revenue (NBR), and Anis Ur Rahman, Executive Director of Bangladesh Bank, also spoke at the event chaired by PRI Chairman Dr Zaidi Sattar.

Dr Ashikur Rahman, Principal Economist at the Policy Research Institute, delivered the keynote presentation at the event, shedding light on a stark inequality in financial access across Bangladesh.

He points out that just 1.0 per cent of loan-account-holders receive 75 per cent of all loans nationwide, while 78 per cent of total lending is concentrated in Dhaka and Chattogram.

Despite decades of bank expansion, he mentions, private banks remain heavily concentrated in the more affluent eastern belt, indicating a lack of outreach to poorer regions.

"In effect, there is circumstantial evidence suggesting that private banks are not banking to the poor," he remarks.

"This research offers the first spatially disaggregated, longitudinal view of banking development in Bangladesh, revealing the invisible gaps that national averages often hide, said Dr Zaidi Sattar.

He emphasizes that financial development must be inclusive, and to achieve that, it is essential to identify and understand where the truly underserved populations are.

Dr Nasiruddin Ahmed said Bangladesh's financial system is under strain due to a high ratio of non-performing loans relative to the total loan volume.

He notes that both the banking and revenue systems are grappling with similar challenges rooted in governance issues, which "must be addressed before undertaking any effective policy mapping".

Citing the example of Amtali Upazila in Barguna, Anis Ur Rahman noted that while the number of deposit accounts in the area doubled, the number of loan accounts declined.

He points out that deposits from regions like Amtali are being channelled as loans to Dhaka and Chattogram, which hinders local development.

"Where is the money coming from, and who is using it?" He questions about an evident financial disparity.

Dr Ahsan H Mansur said over Tk 2.80 trillion had been laundered out from the banking system in the way of depleting foreign-exchange reserves worth $28 billion from $48 billion to $20 billion.

"Where did this money go? It has left the system. This is why our deposit growth is sluggish," the governor told his audience.

Marking the situation as the biggest obstacle for the economy he said printing money to cover this deficit will raise inflation further.

He notes that slow deposit growth and high interest rates indicate a significant outflow of money from the banking system, leading to a liquidity crisis.

Ahsan Mansur blames widespread corruption, irregularities, and unplanned activities under the previous government for the situation and says there is no quick fix for these problems.

He hopes to raise foreign-exchange reserves as quickly as possible, which would require improvements in the balance of payments, an increase in net foreign assets, and a revival of the economy through higher remittances, exports, and foreign financing.

He notes that some progress has already been made, with reserves beginning to recover, and expressed optimism that they would continue to grow.

The microcredit system in the country will not sustain for a longer period competing with banking system as banking system being expanded through low- cost sub-branch system and agent banking system.

He says they would not need to make the comparison themselves - the market would speak for itself.

If agent banking offers loans at an interest rate of 13-14 per cent, he questions why people would choose to borrow at 26-percent interest from microcredit agencies.​