[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Hard-term World Bank lending window beckoning Bangladesh

Bangladesh is asked to borrow from the International Bank of Reconstruction and Development (IBRD), a hard-term lending arm of the World Bank, which extends costlier market-based loan that the country can ill afford at this stage of its graduation process, officials said. The World Bank has su

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Hard-term World Bank lending window beckoning Bangladesh
Market-based loan thru IBRD much costlier than funds borrowed thru Bank's soft-arm IDA

FHM Humayan Kabir
Published :
Jul 03, 2025 00:26
Updated :
Jul 03, 2025 00:26

Bangladesh is asked to borrow from the International Bank of Reconstruction and Development (IBRD), a hard-term lending arm of the World Bank, which extends costlier market-based loan that the country can ill afford at this stage of its graduation process, officials said.

The World Bank has suggested the country to take certain quantum of funds under the newly devised IDA-21 aid package through a window of the IBRD in addition to its ongoing IDA facilities, they said.

This segmentation of funding has designated Bangladesh's status as 'Blend Country' that signifies its transitional state in-between an LDC and an MIC.

However, government authorities are noncommittal on borrowing the costly funds at this moment apart from the ongoing IDA and some other concessional facilities from the global lenders, a Ministry of Finance (MoF) official says.

"The WB has suggested that Bangladesh borrow loan from the IBRD in the upcoming three-year IDA-21 aid package as the country needs more investments from foreign sources. But Bangladesh is unwilling to enter into the IBRD lending window," says a senior Economic Relations Division (ERD) official.

Currently, Bangladesh has been placed as a 'Blend Country' in the WB borrower category under which the country can borrow concessional credits from the International Development Association or IDA and a small portion of that from market- based option like Scale up Facility Window (SFW).

The Washington-based global lender, WB, charges 1.0-percent interest, 0.75-percent service charges and 0.25-percent commitment fee under the IDA facilities. The maturity of the loan is 30 years, including 7-10 year of grace period.

On the other hand, the IBRD loan bears market-based rates wherein SOFR-plus a spread of 2.5 per cent to 2.6 per cent will be added up.

On top of that are a front-end-fee of 0.25 per cent and a commitment fee of 0.25 per cent applicable to each of the loans.

Also, the maturity of an IBRD credit is determined by short maturity loan (SML) where the final maturity period is maximum 7 years, with a chasing 4- year grace period, according to the WB website.

For the IBRD Special Development Policy Loans, the ending rate would be reference rate + applicable adjustment spread + minimum of 2.00 per cent. Besides, the front-end fee is 1.0 per cent of the principal loan amount, the website reads.

The final maturity of the loan will be up to 10 years and 5-year grace period.

Since Bangladesh's economic status has been upgraded to a Lower-Middle Income Country with effect since 2015 and it is going to graduate from the least-developed country (LDC) status to developing nation, the WB now begins beckoning Bangladesh into its harder lending arm -- IBRD, a senior MoF official told the FE writer.

From the next IDA-21 aid- package period, the WB has offered Bangladesh the IBRD loan, he added.

ERD Secretary Shahriar Kader Siddiki told the FE that they would prefer concessional loans in the coming years, too, as the country's economy has been on the cusp of transition before graduating into a developing nation in 2026.

"Bangladesh may not be in a position to enter into the IBRD loan facility of the WB at this moment," he opines.

The World Bank Group has already formed a three-year aid package under its IDA-21 replenishment where it announces a $100 billion worth of basket for the borrowing countries across the globe.

The World Bank's International Development Association or IDA has secured a record $100- billion aid package for its 21st replenishment (IDA21) spanning from July 2025 to June 2028.

The ERD official says Bangladesh is availing the facility of IDA loan where at least 10 per cent of the total borrowing would now have to be market-based.

In that case, he adds, Dhaka is willing to get the loan (10 per cent) from the SUW rather than getting into the IBRD window in next three years.

"Upon getting pressure from the WB, we would request the global lender for considering us for the IDA loan with 10-percent market-based share as Bangladesh is passing a transitional period before becoming a developing nation," the MoF official says.

Bangladesh is the largest borrower from the WB's IDA coffers as it has made a commitment of more than $10.0 billion in aid in last three years under the IDA-20 package between FY2023 and FY2025.​

 

[Saif]

Exports fetch $48.28b in FY25

Merchandise exports earned Bangladesh US$ 48.28 billion in the just- concluded fiscal year 2024-25 in a steady growth, bar the last month, banking heavily on the performance of readymade garments as usual. Official statistics published Wednesday showed 8.58-percent year-on-year growth in the exp

thefinancialexpress.com.bd

Exports fetch $48.28b in FY25

FE REPORT
Published :
Jul 03, 2025 00:23
Updated :
Jul 03, 2025 00:23

Merchandise exports earned Bangladesh US$ 48.28 billion in the just- concluded fiscal year 2024-25 in a steady growth, bar the last month, banking heavily on the performance of readymade garments as usual.

Official statistics published Wednesday showed 8.58-percent year-on-year growth in the exports, excepting in the troubled month of June. The single-month export earnings witnessed a 7.55-percent decline to US$3.33 billion against US$3.61 billion in June 2024.

The country's total merchandise exports fetched US$44.46 billion in the fiscal year 2023-24, according to Export Promotion Bureau (EPB) data.

Despite the growth in annual performance in many sectors, the overall decline in June 2025 export earnings underscores the challenges, including ongoing global economic uncertainty, falling consumer demand in major markets, logistic issues and tough competition from other manufacturing hubs, facing Bangladesh in the short term.

Exporters attribute the export decline in the last month to the long Eid-ul-Adha holiday and a two-day complete shutdown of ports amid turmoil in the National Board of Revenue (NBR).

The single-largest export sector, RMG, maintained its dominance as Bangladesh's export earner contributing 81.49 per cent of the total earnings.

Out of the total US$48.28 billion, RMG fetched US$39.34 billion, marking 8.84-percent growth, according to EPB data.

Within the RMG segment, knitwear exports rose by 9.73 per cent to US$21.15 billion, while woven garments grew by 7.82 per cent to US$18.18 billion.

Home textiles marked a 2.42-percent growth to $871.57 million during July-June period of the last fiscal year.

Talking to The Financial Express, Fazlee Shamim Ehsan, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), appeared upbeat about the continuous growth performance throughout the fiscal year.

"It is because buyers have confidence in us for many reasons, including quality and others," he said.

Besides, work orders from China are shifting and Bangladesh remains on top preference of brands and buyers to place the shifting orders.

Regarding June performance, he said US buyers are going slow and holding a certain portion of work orders due to the US's new tariff regimes waiting to see what is going to happen in the end.

Asked, Mahmud Hasan Khan, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the growth rate would sustain in the coming months if the existing US tariff rates remain unchanged.

"But if it goes up for Bangladesh, as proposed earlier, it would be a big blow for the country," he warns.

Exporters, however, allege that they are in the dark over what negotiations with the US are going on.

Meantime, earnings from jute and jute goods exports continued to struggle, recording 4.10-percent decline to fetch US$ 820.16 million during July-June period.

However, monthly figures showed a slight improvement, with June export rising 7.14 per cent year on year.

Earnings from leather and leather products registered 10.19-per cent year-on-year growth, earning US$1.14 billion in FY'25.

Leather-footwear-export earnings increased 23.54 per cent to US$672.07 million.

Agricultural products earned US$988.62 million, showing 2.52-percent growth during the FY25, but in June alone, exports fell by 6.41 per cent compared to June 2024.

Talking to the FE, agricultural product exporters, however, cited a number of factors, including cut in cash incentives by the government, high import costs for most of the agricultural inputs and other ingredients mostly used for processing foods, paucity of required air spaces coupled with higher freight charges, for the declining trend in the sector's performance.

Frozen and live fish exports recorded 17.23-percent growth to earn US$441.58 million during July-June period of FY'25, led by shrimp shipment that increased by 19.32 per cent to US$296.29 million.

Engineering products recorded 10.03-percent growth and earned US$535.56 million.

Plastics exports came to US$284.05 million in the just-concluded fiscal year with a 16.21-percent growth.​

 

[Saif]

Energising the capital market

The country's stock market is not showing any sign of vibrancy. Occasional attempts to breathe life into it aimed at bringing new firms to get listed have fallen flat. Also, there is no encouragement for small investors to gain from the market. This has been glaringly reflected in a recent finding

thefinancialexpress.com.bd

Energising the capital market

Published :
Jul 03, 2025 23:32
Updated :
Jul 03, 2025 23:32

The country's stock market is not showing any sign of vibrancy. Occasional attempts to breathe life into it aimed at bringing new firms to get listed have fallen flat. Also, there is no encouragement for small investors to gain from the market. This has been glaringly reflected in a recent finding that Bangladesh's stock market was the second worst performer among its Asian counterparts in the first half of 2025, with the benchmark index sliding and no new listing recorded. In contrast, Sri Lanka emerged topper with an impressive 13.9 per cent gain in its equity index, while Thailand fared the worst with a loss exceeding 22 per cent.

Bangladesh's poor performance stems from a combination of high interest rates, weakening corporate profitability, ongoing political and economic uncertainties and a legacy of negative equity-all of which have severely eroded investor confidence. By June 30, the Dhaka Stock Exchange's DSEX index had shed 378 points, or 7.25 per cent, to settle at 4,838. During this period, market capitalisation fell by 8.1 per cent. The blue-chip DS30 index, tracking 30 prominent companies, plunged by 124 points to 1,816. Even more concerning is the fact that the average daily turnover at the prime bourse dropped to Tk 3.84 billion, a steep 39 per cent decline year-on-year. In this depressing market scene, investors have found no opportunities for gains through initial public offerings (IPOs), as there were no IPOs launched over the past year-a situation not seen in decades.

According to many market observers, the failure to adopt transparent and proactive policies for years has left both the Dhaka and Chattogram stock exchanges largely dormant. Continued political interference and manipulation by those close to power have only made matters worse, compounding investor distrust and discouraging genuine market-based activity. The new Commission formed by the interim government has reportedly begun efforts in this regard, setting up a committee and holding discussions with major domestic and multinational firms to encourage listings. But the fact remains that unless these companies see the market as credible, transparent and profitable, they will remain reluctant to participate.

Restoring investor confidence is indeed at the heart of any serious capital market reform. Achieving this requires strong regulatory enforcement, a robust legal framework and a commitment to shielding the market from manipulation and political pressure. Without these fundamental reforms, stagnation in the capital market is unlikely to be reversed, leaving investors wary and companies unwilling to seek listing. Policymakers must also focus on investor education and technological upgrade to enhance trading transparency and efficiency. Modern, automated trading systems, fair disclosure practices, and a vibrant bond market can help diversify investment options and reduce risks for retail investors. Rebuilding trust through sound governance, accountability and developing a long-term strategic vision are thus indispensable, if Bangladesh is to energise its capital market and unlock its full potential for supporting sustainable economic growth.​

 

[Saif]

Import rises on economic rebound

In an early indication of economic rebound following months of sluggishness, Bangladesh's overall imports increased around 7.0 per cent in the just-passed fiscal year. According to the latest data from Bangladesh Bank (BB), the opening of fresh LCs or letter of credits, generally known as import o

thefinancialexpress.com.bd

Import rises on economic rebound
About 7.0pc growth recorded in FY'25

FE REPORT

Published :
Jul 03, 2025 08:50
Updated :
Jul 03, 2025 08:50

In an early indication of economic rebound following months of sluggishness, Bangladesh's overall imports increased around 7.0 per cent in the just-passed fiscal year.

According to the latest data from Bangladesh Bank (BB), the opening of fresh LCs or letter of credits, generally known as import orders, increased to US$70.72 billion in the FY'25 from $68.77 billion recorded in the previous fiscal year (FY24).

In FY'23, the volume of import orders was worth $67.63 billion.

The last fiscal year's import orders were $1.95-billion higher from that of the FY'24.

The volume of settlements against the import orders climbed up to $71.14 billion in FY'25 from $66.07 billion recorded in FY'24.

Seeking anonymity, a BB official says the inflow of foreign currencies continues rising in recent months because of significant growth in both remittance and export earnings-and this upturn bolsters the country's foreign-exchange reserves.

Because of the fact, the central banker says, the banking regulator keeps allowing imports of all goods by the commercial banks. "It clearly indicates that the economic activities rebound slowly."

According to BB, the gross forex reserves stood at $31.68 billion and $26.66 billion in BB and IMF's BPM6 calculations respectively until June 2025.

The reserves of foreign currencies have increased by around $6.0 billion from previous month's statistics when the figure was $25.80 billion and $20.54 billion in BB and IMF arithmetic respectively.​

 

[Saif]

No one will keep money in banks if savings certificate profit rises, says Advisor Salehuddin

Increasing the profit rate on savings certificates will “discourage” people from keeping money in banks, Finance Advisor Salehuddin Ahmed has said. Speaking after a meeting at Nabinagar Upazila Parishad in Brahmanbaria on Saturday afternoon, he said such a move could threaten liquidity

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No one will keep money in banks if savings certificate profit rises, says Advisor Salehuddin

bdnews24.com
Published :
Jul 05, 2025 20:02
Updated :
Jul 05, 2025 20:02

Increasing the profit rate on savings certificates will “discourage” people from keeping money in banks, Finance Advisor Salehuddin Ahmed has said.

Speaking after a meeting at Nabinagar Upazila Parishad in Brahmanbaria on Saturday afternoon, he said such a move could threaten liquidity in the banking system, which must be managed carefully.

He argued that an imbalanced shift towards savings schemes could deprive banks of necessary deposits, making it “difficult” for them to operate.

Discussing reforms, the advisor said Bangladesh Bank is trying to stabilise weaker institutions.

Islami Bank, he added, is showing signs of recovery after earlier setbacks.

He noted that a Bank Resolution Act has been passed to guarantee depositor protection, and the interim government is “committed” to returning funds in all cases.

Salehuddin also said delays were possible in recovery efforts, as significant sums had already been misappropriated—something he claimed had not happened elsewhere in the world.

He added that discussions were ongoing with the National Board of Revenue (NBR) to resolve current instability, and a five-strong taskforce had been formed to implement the steps.​

 

[Saif]

Economy in a new fiscal year

Another fiscal year, 2025-26, to be precise, began on Tuesday with a mix of legacy burdens and achievements in the country's economy. Moving forward and achieving the desired economic growth and inflation targets by the end of the year will not be easy since there are a number of challenges.

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Economy in a new fiscal year

Asjadul Kibria
Published :
Jul 05, 2025 22:17
Updated :
Jul 05, 2025 22:17

Another fiscal year, 2025-26, to be precise, began on Tuesday with a mix of legacy burdens and achievements in the country's economy. Moving forward and achieving the desired economic growth and inflation targets by the end of the year will not be easy since there are a number of challenges. In the national budget for the new fiscal year (FY26), the finance adviser of the interim government set a modest target of 5.50 per cent growth of gross domestic product (GDP). The government wants to keep the rate of inflation at 6.50 per cent in FY26. How realistic are the targets? One needs to analyse the relevant issues, external as well as domestic, to find the answer. However, there are reasons to be hopeful of a significant growth in the upcoming fiscal year.

In the just-concluded fiscal year (FY25), the GDP growth rate stood at 3.97 per cent, as per the provisional estimate of the Bangladesh Bureau of Statistics (BBS). The interim government expects the rate to be 5.25 per cent in the final count. It is not unlikely that the final growth rate in the last fiscal year will exceed the five per cent mark, as the country entered a relatively stable period compared to the previous fiscal year (FY24) when the growth rate was recorded at 4.22 per cent.

In FY25, the economy experienced two sluggish phases, which reduced the growth rate. First, it was an election year, and the 12th national parliament election took place in the middle of the fiscal year. On the eve of the election, economic activities slowed down due to uncertainties about the post-election situation. It was widely known that the last national polls was yet another farcical election under the authoritarian regime of Sheikh Hasina. The regime engineered the election to stay in power for another five years.

Historical trends have shown that GDP growth typically declines during election years compared to the previous fiscal year. Since the revival of democracy in 1991, following the fall of Ershad's autocratic regime, the trend was visible until 2008. For instance, GDP growth was 5.10 per cent in FY01, which decreased to 3.80 per cent in FY02, the election year of the eighth national parliament. The trend, however, was reversed during the tenth and eleventh parliament polls held in 2014 and 2018, respectively. The GDP growth rate increased to 7.0 per cent in FY14 from 6.60 per cent in FY13 and to 7.88 per cent in FY19 from 7.32 per cent in FY18. As both polls were held in the middle of the respective fiscal years, the economy overcame the pre-poll sluggishness during the post-poll period, contributing to a rise in growth.

It is, however, essential to note that both the tenth and eleventh national elections were marred by controversy for various reasons. The Hasina government scrapped the constitutional provision for holding elections under a caretaker government in 2011 with the 15th constitutional amendment. The main reason was to make the path of being re-elected again and again without any hindrance. In the absence of a caretaker government, the Hasina-led Awami League took complete control of the administration and marginalised the main opposition, the Bangladesh Nationalist Party (BNP), by forcing it not to take part in the election. Mass rigging was recorded in these two elections. In a similar vein, the national election took place in the middle of FY24, and Hasina was re-elected as the Prime Minister for the fourth time at a stretch.

But things did not go as planned after the election as student-led protests spread gradually across the country. Initially, the protest movement was launched to abolish the quota system in government jobs. Soon, it turned into a mass movement against corruption and intimidation by the Hasian regime. Therefore, the second half of FY24, or the post-poll period, was unstable, and the economy did not recover from the pre-poll sluggishness. Although the mass movement turned into a mass uprising in July, the first month of FY25, the previous months, especially the last quarter of FY24, were volatile, with the GDP growth rate dropping to 2.14 per cent from 4.62 per cent in the third quarter of the fiscal year. The ultimate result is a sharp decline in overall GDP growth in FY24 to 4.22 per cent from 5.78 per cent in FY23.

Now, the economy has weathered the most turbulent period in the first quarter of FY25, following the mass uprising that compelled Hasina to step down and flee the country to seek shelter in India on August 5 last year. The country also sank into chaos and uncertainty for the time being, although people in general were jubilant and hopeful for a better future. The GDP growth rate decreased to 1.96 per cent in the first quarter of FY25 but then significantly rebounded to 4.48 per cent in the second quarter. The Yunus-led interim government has taken several steps to restore the economy over the past few months. Economic activities also started to pickup and the final outcome will depend on socio-political stability in the country.

The core challenges to achieving the modest target of GDP growth in the current fiscal year include higher inflation and uncertainties in global trade. The annual average rate of inflation is still above 9.0 per cent, while the monthly inflation rate has also been above 9.0 per cent (as of May 2025). The annual average inflation rate jumped in FY23 to 9.02 per cent from 6.15 per cent in FY22, reflecting monetary mismanagement and a distorted supply chain due to rent-seeking activities in the market during the Hasina regime. Inflation increased further in FY24 to 9.73 per cent. These challenges are significant and need to be addressed for the economy to thrive.

Bangladesh Bank, under the new leadership after the interim government took charge, has intensified its battle against inflation by implementing persistent rate hikes. The tight monetary stance necessitated a temporary sacrifice of growth to contain inflationary pressures. The step had paid off slowly, as the monthly inflation rate started to decline since November last when it was 11.38 per cent. The rate has dropped below 10 per cent since January this year.

As the central bank prepares to formulate and announce the Monetary Policy Statement (MPS) for the first half of FY26 (July-December), it is already seeking suggestions and opinions from individuals and institutions. The new MPS will likely set the target to keep the inflation ceiling at 6.50 per cent in sync with the FY26 budget target. It means the economy is unlikely to stay in the 'low-growth high-inflation' cycle for the third consecutive year.​

 

[Saif]

Breakthroughs beckon as 60 cases settled, corporates queueing up

Breakthroughs beckon in a current crash course in cleansing piles of non-performing loans as the government-formed loan -recovery committee has settled at least 60 cases worth more than Tk3.0-billion borrowings while corporates queueing up, insiders said. After its 13 meetings in last

thefinancialexpress.com.bd

Crash course on cleansing Augean stables of NPLs
Breakthroughs beckon as 60 cases settled, corporates queueing up

FHM Humayan Kabir
Published :
Jul 05, 2025 23:40
Updated :
Jul 05, 2025 23:40

Breakthroughs beckon in a current crash course in cleansing piles of non-performing loans as the government-formed loan -recovery committee has settled at least 60 cases worth more than Tk3.0-billion borrowings while corporates queueing up, insiders said.

After its 13 meetings in last five months, the committee is also on track to settle some other big cases within next couple of meetings, said committee members.

Members of the Bangladesh Bank-formed committee said Saturday they had already recommended at least 60 cases for settlement in different case-specific ways, like allowing defaulters loan-rescheduling opportunity for the last time with a guarantee of repayment, extending the loan-repayment period, and interest waiver for those under business-exit plan.

Meanwhile, more than 1,200 applications of default-loan -settlement cases have been filed with the committee, the sources said.

"Alongside hundreds of small companies, some big-shot corporates and businesses have also queued up with petitions for longer-term loan- repayment facilities from the recovery-support committee formed by the post-uprising government as they want to pay back the overdue and classified loans," says one source.

Among them, at least 60 big corporates have already applied for the settlement of their classified loans with their billions of taka of default loans in different commercial banks and financial institutions, the sources said.

Beximco Group, Gazi Group, Abdul Monem Group, Aman Feed, EnergyPack, Desh Bandhu Group, Zahintex Industries Ltd, Amazing Fashion, and HKG Steel are among the business biggies.

Besides, Universal Yarn, Ershad Brothers, Tampaco Foils Ltd, ZahinTex, Rownak Spinning, Universal Yarn, and Spider Digital Security, among others, are in the queue seeking long-term loan-repayment facilities.

The arbitration panel has already scrutinised more than 150 applications of tycoons holding unpaid credits ranging from Tk500 million to Tk 80 billion in the process of recovery of the credits that have accumulated over the years of lending leniency.

The central bank formed the 'selection committee for policy support to restructure businesses and financial management' on January 30 that sat at least 13 times within its last 5-month period.

The committee reviews whether the applicants with big NPLs or classified loans are willful or non-willful defaulters.

"Some borrowers have already had their loans rescheduled thrice, some are stuck-up for long even after three-time rescheduling, some businesses had already faced losses and some businessmen already closed their businesses after facing losses," a committee member told the FE.

"So, we have recommended different solutions on a case-to-case basis to the default loans aiming to recover those," he said, requesting anonymity.

Among the solutions, they have recommended allowing defaulters loan-rescheduling opportunity for the last time with the guarantee of repayment within the fresh maturity period or extending the loan- repayment period with the concrete assurance, or interest waivers for the business-exit plan, the member added.

"Besides, some big applicants have pledged repaying their non-performing loans (NPLs) and bad loans within an extended repayment period. But we have asked the lending agencies and the borrowers to submit detailed audit reports of their annual revenue earnings and loan -repayment capabilities in the future days," he said.

The panel feels that is impossible to settle those classified loans without justifying their annual revenue earnings and loan-repayment capabilities by engaging reputed international auditors.

Another member of the committee said the corporates and businesses at repayment fault have also been asked to incorporate their lenders-commercial banks and nonbank financial institutions (NBFIs)-into the verification system before getting the loan-repayment-relaxation facilities.

The member of the committee said they won't allow those applications until the annual revenue-earning and loan-repayment plans of those borrowers are validated by internationally reputed audit firms.

"The companies have already applied to us with their revenue-earning and loan-repayment plans seeking long time, but we will not endorse without the justification of their commitment," said the BB-formed committee member.

In most of the cases, the big borrowers have sought some 5-to 10-year loan-repayment timelines with at least one-year grace period.

Many of them have sought waiver of interest for paying the principal of the loans with instalment facilities for long, he added.

And some of the corporates seek loan-rescheduling facilities again after already having their loans rescheduled 2-3 times.

The recovery committee has reviewed the problematic and non-performing loans taken from the country's different commercial banks and financial institutions at its last 13 meetings, insiders said.

At all the meetings, the borrowers as well as banks and NBFIs were present to submit their views.

Bangladesh's non-performing loans (NPLs) hit Tk 4.2 trillion at the end of March 2025, accounting for 24.13 per cent of the total loans worth Tk17.42 trillion disbursed by 61 commercial banks, Bangladesh Bank data showed.

This means that almost one-fourth of the total loans distributed by the banking sector has already become default loans or will be classified as troubled loans.​

 

[Saif]

Large industries defy downturn with modest growth, RMG dips

Bangladesh's large industrial sector largely defied a downtrend elsewhere by posting an annualized 4.15-percent growth in April, although the largest-export-earning apparel industry was little downbeat, according to official statistics. Latest Bangladesh Bureau of Statistics (BBS) data showed the

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Large industries defy downturn with modest growth, RMG dips

Jasim Uddin Haroon
Published :
Jul 05, 2025 23:44
Updated :
Jul 05, 2025 23:44

Bangladesh's large industrial sector largely defied a downtrend elsewhere by posting an annualized 4.15-percent growth in April, although the largest-export-earning apparel industry was little downbeat, according to official statistics.

Latest Bangladesh Bureau of Statistics (BBS) data showed the Quantum Index of Large-Scale Manufacturing (LSM) rose to 182.12 in April 2025, up from 174.87 in April 2024, giving economists to feel good about potential advances in economic performances.

The growth was broad-based, with 19 out of 23 major industrial sectors contributing positively.

However, four key sectors -- readymade garments (RMG), food products, plastic and rubber goods, and chemicals -- registered a decline, partially weighing on the overall momentum in the economy.

The apparel sector, which holds the largest weight of 61 per cent in the index, contracted by 0.25 per cent during the month. Though the decline was less than 1.0 per cent, its sheer size makes it a pivotal driver of overall manufacturing performance.

"Any fluctuation in RMG significantly impacts the overall index," says Dr M. Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh. "That said, the positive performance of other sectors helped offset the RMG contraction in April."

Among the sectors that registered negative growth year on year, food products declined by 2.4 per cent, chemical products fell 1.59 per cent, plastic and rubber products dropped 0.65 per cent and machinery and equipment shrank nearly 9.0 per cent.

On the upside, textiles, which carry the second-highest weight in the index, expanded by 5.34 per cent. Other high-performing sectors included computer, electronic and optical products: up 5.68 per cent, paper and paper products: up 14 per cent, printing: up 12 per cent, pharmaceuticals: up 12 per cent, electrical equipment: up 16.46 per cent, basic metals: up 10.23 per cent, furniture: up 6.1 per cent, tobacco products: up 7.27 per cent.

Large-scale manufacturing contributes over 11 per cent to Bangladesh's gross domestic product (GDP) and is a key indicator of the country's industrial health.

Industry leaders and economists offered mixed reactions over the April ups and downs.

Anwar-ul Alam Chowdhury (Parvez), President of Bangladesh Chamber of Industries (BCI), identified elevated interest rates and weaker purchasing orders as key barriers to stronger growth.

Syed Nazrul Islam, a former leader of Bangladesh Garment Manufacturers and Exporters

Association (BGMEA) and Managing Director of Well Dress, says a seasonal slowdown in RMG orders partly explains the sector's decline.

Despite sectoral challenges, economists believe economic activity is gradually recovering, supported by a stabilised foreign-exchange market and rising domestic demand.

Dr. Zahid Hussain, former lead economist at the World Bank's Dhaka office, acknowledges that the mid-July student-led uprising in 2024 caused temporary disruptions, but expresses optimism about the recovery path.

"Inflation remains a challenge for industrial expansion," he says. "But it is gradually easing."​