[🇧🇩] Monitoring Bangladesh's Economy

[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.​

 

[Saif]

Ambitious reforms urgent for Bangladesh to attract FDI

Bangladesh urgently needs ambitious reforms to attract more foreign direct investment (FDI) and stimulate domestic private investment by ensuring better coordination among government agencies - especially on policy matters. In an interview with The Financial Express, Hoe Youn Jeong, the Asia

thefinancialexpress.com.bd

Ambitious reforms urgent for Bangladesh to attract FDI
Says ADB Country Director

Doulot Akter Mala
Published :
May 22, 2025 00:33
Updated :
May 22, 2025 00:33

Bangladesh urgently needs ambitious reforms to attract more foreign direct investment (FDI) and stimulate domestic private investment by ensuring better coordination among government agencies - especially on policy matters.

In an interview with The Financial Express, Hoe Youn Jeong, the Asian Development Bank (ADB) Country Director for Bangladesh, put forward the suggestion to avert further erosion of the already-waning investor confidence as reflected in the declining inflow of FDI.

"The government must streamline and simplify licencing and permit procedures, business regulations, and processes," he said.

The areas that deserve simplification are starting and closing businesses, technology adoption, infrastructure, logistics, cross-border trade, dispute resolution, labour laws, taxation, incentives, and finance.

In FY 2024, the FDI inflows amounted to only 0.4 per cent of GDP, marking a 71-percent fall from July to November last year, according to the ADB Country Director.

Over the past decade (2013-2023), Bangladesh's average FDI inflow stood at just 0.8 per cent of GDP, significantly lower than Cambodia (9.4 per cent), Vietnam (4.6 per cent), and Indonesia (1.9 per cent).

"The government must uphold international standards on labour, human rights, and environmental practices. Genuine reforms in these areas will enhance Bangladesh's competitiveness and reliability as a global investment destination," Mr Jeong noted.

The ADB has revised down Bangladesh's GDP growth forecast for FY 2025 to 3.9 per cent from previous 5.1 per cent, citing political uncertainty, flooding in key sectors, banking vulnerabilities, industrial unrest, and persistent inflation.

Revised export figures for FY2023 and FY2024 have further lowered the growth baseline.

"To stabilise the macroeconomy and sustain growth, Bangladesh needs bold action," Jeong asserted. "This includes diversifying the economy, enacting critical reforms, and increasing public investment in essential infrastructure."

He also called for efforts to promote entrepreneurship, rationalise tariffs, improve business climate, and build resilient urban systems and infrastructure.

As Bangladesh prepares to graduate from the LDC category in November 2026, it faces critical economic challenges.

Mr Jeong underscored the need for economic diversification, reduced reliance on imported energy, shrinking the informal sector, enhancing governance, and building resilience.

According to Bangladesh's national Smooth Transition Strategy, GDP growth may decline by 1.0-2.0 per cent post-graduation due to the loss of trade preferences, concessional financing, and special WTO treatments.

Political uncertainty and financial sector fragilities could compound the risks, he added.

"To manage the transition, we've discussed strategic actions with the interim government," Mr Jeong said.

These include designing an economic stabilisation plan, creating a framework for the FY 2025-26 national budget, advancing priority reforms, enacting a strong LDC transition strategy, and accelerating progress of the sustainable development goals (SDGs).

He said the ADB is also working with the government to address implementation delays in ADB-funded projects by improving project readiness, strengthening agency capacities, enhancing interagency coordination, streamlining procedures, and engaging more with private and development partners.

"By acting decisively, Bangladesh can manage the transition effectively and secure sustainable growth beyond 2026," Jeong said.

Regarding trade, Jeong warned that the new 37 per cent US tariff on Bangladeshi exports, particularly readymade garments (RMG), threatens export earnings. The US is Bangladesh's largest RMG market, accounting for 17 per cent of the country's total exports.

However, the full impact of the tariffs remains unclear as rates may vary and trade dynamics may shift. Much will depend on Bangladesh's relative price competitiveness and trade negotiations.

"If these tariffs negatively affect the US and EU economies, demand for Bangladeshi goods could drop, further limiting export growth," he added.

To mitigate this, Bangladesh must quickly diversify its export products and markets. The Smooth Transition Strategy identifies sectors with strong potential such as manmade-fibre apparel, pharmaceuticals, ICT, agro-processing, leather, light engineering, and shipbuilding.

Effective implementation of the National Tariff Policy 2023, the National Logistics Policy 2024, and new free-trade agreements will be vital. Bangladesh should also pursue constructive dialogue with the US to secure favourable trade terms.

"Rationalising import tariffs is essential for economic diversification. With limited fiscal space, Bangladesh cannot rely on subsidies or incentives to sustain exports," Jeong noted.

He called for removing structural barriers, encouraging innovation, and creating quality jobs. The ADB remains committed to supporting Bangladesh's resilience and competitiveness as it transitions from the LDC (least developed country) status.

"We are working with the government to expedite two proposed policy-based loans that will support key reform efforts," he said.

These loans aim to strengthen the banking sector and promote inclusive, climate-resilient development. A programmatic approach will help the government tackle complex reforms holistically over the medium term.

Jeong highlighted Bangladesh's key strengths: a young workforce (with over 65 per cent working age population), strong remittance inflows, global competitiveness in RMG, strategic location between South and Southeast Asia, and the resilience of its people.

"Upgrading seaports can help Bangladesh become a regional trade hub," he added.

To harness these strengths, Jeong emphasised the need for a comprehensive and strategic reform roadmap. Guided by the 2024 White Paper and reform commission findings, the interim government is building consensus on priority reform actions.

Reforms should focus on business regulation simplification, licencing and permit streamlining, improved inter-agency coordination, and responsible business practices aligned with international standards.

Strengthening public investment, particularly in infrastructure and essential services, is critical. Integrated development of logistics, economic corridors, energy, transport, water, sanitation, urban services, and digital transformation will support sustainable growth.

"These reforms will boost productivity, attract private investment, create jobs, and strengthen supply chains," he said. "As a trusted development partner, ADB stands ready to support Bangladesh in delivering these reforms."​

 

[Saif]

Foreign exchange reserves to reach $40 billion in next fiscal year, BB governor hopes

Bangladesh Bank Governor Dr Ahsan H Mansur on Wednesday projected that the country's foreign exchange reserves will rise to $30 billion by June, with a further target of reaching $40 billion in the upcoming fiscal year. The governor made the remarks at an event organised by the Policy Research Ins

thefinancialexpress.com.bd

Foreign exchange reserves to reach $40 billion in next fiscal year, BB governor hopes
UNB
Published :
May 21, 2025 20:09
Updated :
May 22, 2025 00:37

Bangladesh Bank Governor Dr Ahsan H Mansur on Wednesday projected that the country's foreign exchange reserves will rise to $30 billion by June, with a further target of reaching $40 billion in the upcoming fiscal year.

The governor made the remarks at an event organised by the Policy Research Institute (PRI), highlighting the central bank's outlook on the economy and banking sector.

“By next month, the reserve will be between $27 billion and $30 billion. There is a target to raise the reserve to $40 billion in the next fiscal year,” Dr Mansur said.

He also addressed the challenges facing the microcredit sector, noting that high interest rates are becoming increasingly unsustainable.

“Microcredit with a 26 per cent interest rate cannot survive. Customers are now accessing loans from agent bank branches at nearly half that rate. Over time, microcredit at such high interest will be phased out as it fails to compete,” he said.

As of May 19, the central bank's latest data shows Bangladesh’s gross foreign exchange reserves stand at $25.44 billion.

Under the International Monetary Fund's (IMF) Balance of Payments and International Investment Position Manual (BPM6) methodology, usable reserves are reported at just over $20 billion.​