[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

For Bangladesh, this means the following:

Fighting Corruption. A credible anti-corruption drive is indispensable. But beyond symbolic gestures, anti-corruption efforts must focus on recovering lost revenues from systemic evasion by powerful business interests. Holding unscrupulous businesspeople accountable for unpaid taxes and illicit wealth transfers could yield a substantial fiscal dividend, potentially more significant than what could be gained by broadening the tax base among low-income earners. Targeted audits, forensic investigations, and enforcement of tax laws on high-net-worth individuals and politically connected firms should be top priorities.

Broadening the Formal Economy. Encouraging formalisation through digital payments, simplified registration, and incentives for SMEs can expand the tax base. Policymakers might consider Vietnam’s experience, which has made notable progress in formalizing its SME sector over the past two decades, beginning with the 2005 Enterprise Law. This progress was achieved through a combination of legal reforms, administrative simplification, financial incentives, and the use of digital tools.

Reforming Tax Expenditures. Rationalising exemptions and incentives that benefit the wealthy disproportionately. Consider replacing blanket corporate incentives with performance-linked tax credits tied to job creation or export diversification. Review and gradually phase out ineffective tax holidays for special economic zones.

Improving Public Spending. Tax compliance will only improve when citizens see visible benefits from their contributions, such as clean water, reliable roads, and quality schools. Consider implementing pilot participatory budgeting in municipalities, enabling citizens to help prioritize local spending on schools, roads, and clinics, as pioneered in Brazil. Additionally, the government might consider launching infrastructure tracking dashboards that show the real-time progress of public projects funded by tax revenue, similar to India’s Gati Shakti portal. Scaling back or canceling mega projects and redirecting funds to health and education could also be beneficial.

Enhancing Transparency. Publish regular tax data, enforcement outcomes, and the use of revenue in public dashboards. Establish an open-access public finance portal that displays tax collections by sector and budget allocations by the ministry, modeled on the US government’s “USAspending.gov.” Establish a public grievance redressal mechanism that allows citizens to report harassment or corruption anonymously, with mandatory follow-up and accountability measures in place.

Conclusion: Bangladesh’s low tax-to-GDP ratio is not the disease—it is a symptom of a deeper malaise. Fixating on this metric without addressing the underlying rot of corruption, elite capture, inequality, and institutional mistrust will lead nowhere. Taxation is not simply a technical policy instrument—it is a moral contract between citizen and state. And right now, that contract is broken.

What Bangladesh needs is not another donor-mandated revenue target, but a comprehensive political and institutional overhaul that restores public confidence, expands the formal economy, and ensures that taxation serves the many, not just the privileged few. Until that happens, the tax-GDP debate will continue to be a distraction from the country’s real problem: a state that taxes without trust and spends without accountability.

Dr MG Quibria is a development economist and former Senior Advisor at the Asian Development Bank Institute (ADBI). He holds a Ph.D. in economics from Princeton University and has held academic appointments across Asia, North America, and Europe.​

 

[Saif]

undefined | The Financial Express

thefinancialexpress.com.bd

Even cut-down Tk 2.26t ADP FY25 miserably misses target
Dev spending hits rock-bottom low at Tk 1.53t

FHM Humayan Kabir
Published :
Jul 24, 2025 00:40
Updated :
Jul 24, 2025 00:40

Development spending in Bangladesh hit rock bottom in the past fiscal year as agencies under the post-uprising government trailed far behind even the pared-down Tk 2.26-trillion Annual Development Programme.

Latest official statistics show the ADP-implementation rate in the fiscal year (FY) 2024-25 recorded a 20-year low, raising concerns about the country's economic development and job generation.

The government ministries and agencies spent only Tk 1.53 trillion or 67.85 per cent of the Tk 2.26-trillion revised ADP outlay, Implementation Monitoring and Evaluation Division (IMED) data showed.

The execution rate was 13-percentage-point lower than the 80.63 per cent in the previous FY2024, according to the official data.

Based on the available data, it was found that the rate of implementation rate of ADP in the last fiscal was the lowest in two decades since FY2005-06. The government had no open-source data before the FY2006.

Analysts attribute this unprecedented slowdown to a confluence of factors, including bureaucratic hurdles, a cautious approach to new project approvals amid global economic uncertainties, and a perceived lack of urgency in project execution by various ministries and implementing agencies.

Officials at the IMED told The Financial Express Wednesday that "the biggest failure" of the health ministry was the key reason for the lowest ADP-implementation rate, as this ministry could spend only 21.74 per cent of its total Tk 56.73 billion worth of outlay in the jus-past financial year.

Some other public agencies, including civil aviation and tourism ministry and the primary and mass education ministry, were on the lowest trajectory implementing lower than even the average 67.85-percent rate in the FY2025, officials said.

The analysts see the interim government's tightfisted fiscal policy as one of the key reasons for the lowest-ever ADP implementation in the last FY.

It was felt that the ADP implementation could even be much lower if the autonomous and semi-autonomous state-run companies had not performed well. The autonomous bodies used an impressive 93.21 per cent of their Tk 101.65-billion ADP outlay.

On the other hand, the government ministries and agencies were sluggish in implementing the project-aid portion in the ADP as they spent 65.53 per cent.

The ministries and agencies, however, spent higher funds from government's internal resources than the foreign-aided funds as it recorded 67.33 per cent in the last FY2025, the IMED data showed.

Among the top 15 ministries, the Health, Civil Aviation and Tourism, and Primary & Mass Education performed worse as their ADP-execution rate was lower than the average 67.85 per cent.

On the other hand, the power division and energy and mineral resources division showed best performance with their 98.10-percent and 90-percent implementation rate.

Economists and analysts point out several key issues contributing to this historic low. Delays in land acquisition, cumbersome procurement processes, and a shortage of skilled manpower for large-scale infrastructure projects have consistently held back progress.

"Furthermore, the government's focus on fiscal consolidation and managing inflation may have inadvertently led to a tighter grip on expenditure, impacting the pace of development activities," says one of them.

The implications of such a low implementation rate are far-reaching. Critical infrastructure projects, essential for boosting economic activity and improving public services, will face further delays.

This directly impacts job creation, private-sector investment, and the overall trajectory of national-development goals. The inability to fully utilise allocated funds also signifies a missed opportunity to stimulate the economy, especially at a time when global headwinds necessitate robust domestic demand.

Economists and development experts urge the government to undertake a comprehensive review of the ADP-implementation framework for future advances.

Senior economist Dr Zahid Hussain told the FE that this interim government faced several movements on the streets almost every week over the last one year which is one of the key reasons for the lower ADP implementation.

"Besides, the cautious public-spending approach and strict reviews of the ongoing projects by this government have also affected higher project-execution rate," he added.

Nevertheless, the failure of some big-budget-holding ministries, including health, education and others, should be analysed in-depth for streamlining their development-budget-spending capacity, the economist suggests.​

 

[Saif]

BEPZA’s contribution to exports rises to 17pc

The factories at eight export processing zones under Bangladesh Export Processing Zones Authority contributed 17.03 per cent to the national export of a total $48.28 billion in the recently concluded financial year 2024-25...

www.newagebd.net

BEPZA’s contribution to exports rises to 17pc
Staff Correspondent 23 July, 2025, 22:42

The factories at eight export processing zones under Bangladesh Export Processing Zones Authority contributed 17.03 per cent to the national export of a total $48.28 billion in the recently concluded financial year 2024-25.

During FY25, operational enterprises of various EPZs under BEPZA exported goods worth $8.22 billion, which was 16.22 per cent higher than the $7.07 billion exported in FY24, according to a press release.

In FY24, the factory units under BEPZA contributed 15.9 per cent to the total national export of $44.46 billion.

In FY25, the BEPZA factories also created more than 33,000 new employment opportunities.

Moreover, the state agency also signed 33 agreements with new enterprises, which cemented the way for increased investment in the coming days.

Since its inception, BEPZA-administered factories exported goods worth $119 billion to date.

The manufacturing units at eight EPZs exported their goods to more than 120 countries worldwide.

As of June 2025, a total of 533,527 Bangladeshi nationals have been employed in eight EPZs and the BEPZA Economic Zone, which was 500,110 in June 2024, the press release added.

In FY25, enterprises operating within BEPZA’s EPZs and Economic Zone invested $292.77 million in capital machinery, construction materials, and other fixed assets (excluding working capital). However, the figure was lower than the $350.93 million invested in FY24.

In FY25, the BEPZA signed 33 new investment agreements with investors from China, South Korea, the United Kingdom, Ireland, the British Virgin Islands, Singapore, India, the United Arab Emirates, and Bangladeshi companies.

The total proposed investment under these agreements was $497.48 million, with an estimated employment potential of 59,408 Bangladeshi nationals.

These enterprises would produce a wide range of goods, including readymade garments, electronics, agro-based products, footwear, leather goods, packaging materials, tents, wigs, light engineering products, toys, and composite items.

At present, there are 563 industrial units under BEPZA, of which 450 are operational and 113 are under implementation.

Among the operational enterprises, 33 per cent produce readymade garments, 18 per cent garment accessories, and 9 per cent textile products.

The remaining 40 per cent export a wide variety of goods ranging from electronics and medical equipment to furniture and fashion accessories.

Along with the eight operational EPZs across the country and the BEPZA Economic Zone in Mirsarai in Chattogram, the development of two new EPZs in Jashore and Patuakhali is progressing rapidly to attract more investment.​

 

[Bilal9]

Mirsarai in Chattogram is already online partially but will slowly get to 50% or so by the next 3 years Insha-Allah, so will the two new EPZs in Jashore and Patuakhali in 2027.

However Mirsarai remains the largest EPZ in Asia (35000 acres) and the scope for further FDI placements is very, very wide. Lot's of FDI expected from China especially.

I have very high hopes for Mirsarai. For a small country like ours, this is quite an achievement.

 

[Saif]

I have very high hopes for Mirsarai. For a small country like ours, this is quite an achievement.

Your economy depends on population not the size of the country. Geographically Bangladesh is small but population wise it's the eighth largest country in the world.

 

[Saif]

Bangladesh at the crossroads of sustainable progress

In July 2025, the United Nations released its 'Sustainable Development Goals Report 2025', offering a sobering and urgent assessment of the global effort to meet the 2030 Agenda for Sustainable Development. The report reveals that only 35 per cent of the 169 SDG targets are on track or making moder

thefinancialexpress.com.bd

Bangladesh at the crossroads of sustainable progress

Matiur Rahman
Published :
Jul 25, 2025 22:26
Updated :
Jul 25, 2025 22:26

In July 2025, the United Nations released its 'Sustainable Development Goals Report 2025', offering a sobering and urgent assessment of the global effort to meet the 2030 Agenda for Sustainable Development. The report reveals that only 35 per cent of the 169 SDG targets are on track or making moderate progress, while nearly half are either stagnating or progressing too slowly, and an alarming 18 per cent are regressing.

Described by UN Secretary-General António Guterres as a "global development emergency," the report calls for unprecedented political will, multilateral action, and investment to avert the unraveling of the SDG framework. For Bangladesh-a country often highlighted as a model of development in the Global South-the report serves not only as a global reckoning but also as a mirror reflecting its complex and uneven journey toward sustainable development.

Bangladesh's progress since adopting the SDGs in 2015 has been both visible and significant. Child mortality rates have declined, girls' access to education has improved, rural electrification has expanded, and innovative social programs-many led by NGOs and supported by development partners-have deepened inclusion.

However, the 2025 SDG report makes clear that global turbulence from climate change and pandemics to economic shocks and geopolitical crises is putting even the most resilient development models under strain. Bangladesh is no exception. The country stands at a critical inflexion point: either accelerate progress through systemic reform and investment, or risk undoing decades of social and economic gains.

The report identifies six "critical transitions" where the SDG agenda must now be concentrated: food systems, energy access, digital connectivity, education, employment and social protection, and climate-biodiversity action. These are not abstract global goals, but rather deeply relevant to the Bangladeshi context. Each sector reveals both the strides already made and the vulnerabilities yet to be addressed.

In the realm of food systems, Bangladesh presents a story of contrasts. On one hand, the country has achieved near self-sufficiency in rice production, bolstered by widespread agricultural mechanisation and rural microfinance. On the other hand, malnutrition remains stubbornly high. According to the report, nearly one in eleven people globally experienced hunger in 2023, while over two billion faced moderate to severe food insecurity.

Bangladesh mirrors this pattern. Despite national food availability, undernutrition persists due to poor dietary diversity, food price volatility, and the fragile status of small-scale producers. These producers-who dominate the agricultural sector-often earn less than $500 annually, lack formal land rights, and have limited access to credit, insurance, and modern farming technologies.

The country's agricultural orientation index remains low relative to its GDP contribution, echoing the global finding that despite record-high public agricultural investment, resources are not translating into equitable or sustainable outcomes. Structural reform in rural agrifood systems, support for women farmers, and investments in value chains and cold storage infrastructure are now urgent.

On energy access, the picture is again mixed. Electrification in Bangladesh has expanded significantly, reaching over 96 per cent of the population. The country has successfully scaled solar home systems in off-grid areas, a notable achievement in South Asia. However, the clean cooking agenda lags far behind. The continued use of biomass and inefficient stoves in rural areas contributes to indoor air pollution, health risks, and deforestation.

The UN report highlights that while access to electricity has improved globally, the transition to affordable, renewable, and clean energy is progressing too slowly. In Bangladesh, the share of renewables in the energy mix is under 5 per cent, and fossil-fuel-based energy-particularly coal and imported LNG-remains dominant.

Energy subsidies are not aligned with long-term sustainability, and green financing mechanisms are still in their early stages of development. To meet SDG 7, Bangladesh must commit to a deeper energy transition through expanded investment in decentralised solar grids, incentives for green entrepreneurship, and policies that prioritise energy justice for low-income and climate-vulnerable communities.

In digital inclusion, Bangladesh has made commendable progress. With the rise of "Digital Bangladesh" as a national vision, internet penetration has surpassed 70 per cent. E-governance, mobile banking, and online education platforms have experienced rapid expansion, particularly since the COVID-19 pandemic. However, the digital divide remains stark. Rural areas continue to suffer from poor connectivity and limited access to devices.

Women, especially in conservative and low-income households, face barriers to digital access, usage, and literacy. The UN report notes that while global internet usage increased from 40 per cent in 2015 to 68 per cent in 2024, inequalities in digital access persist. In Bangladesh, digital progress risks reproducing pre-existing inequalities unless proactively addressed through targeted policy. Without addressing digital illiteracy, affordability, cyber-security risks, and gender bias, the country will not harness the transformative power of technology for inclusive development.

Education has long been a development stronghold in Bangladesh. The country has achieved near gender parity in school enrollment and has invested significantly in stipend programs and the distribution of textbooks. Yet, the SDG report highlights a growing global concern: education quality is stagnating.

In Bangladesh, the problem is acute. Learning outcomes in reading and numeracy remain low, and dropout rates increase sharply at the secondary level, especially among girls. COVID-19 disrupted learning trajectories, particularly for children from rural and urban low-income backgrounds who lacked access to online learning.

The teacher-student ratio remains sub-optimal, and public investment in secondary and vocational education is insufficient to meet future labour market demands. The education system must now shift its focus from access to quality, investing in teacher training, curriculum modernisation, and school safety, while also prioritising digital literacy and climate education.

Employment and social protection are perhaps the most pressing challenges. The UN report warns that over 800 million people globally remain trapped in extreme poverty, and 3.8 billion are without any form of social protection. In Bangladesh, despite progress in employment generation in the garment and construction sectors, the labour market remains dominated by informality, precarity, and gendered segmentation. Youth unemployment, underemployment, and skill mismatches are growing problems.

Only a small fraction of the workforce is covered by pensions, health insurance, or unemployment benefits. Social protection programmes exist-such as old age allowances, widow pensions, and disability stipends-but they are fragmented, poorly coordinated, and vulnerable to political manipulation. The gender gap in access is significant.

According to the report, globally, only 9.7 per cent of people in low-income countries are covered by social protection. For Bangladesh, expanding the coverage, adequacy, and digital delivery of social protection is essential. This will require integrating national ID systems, mobile payments, and robust grievance redress mechanisms to build trust and reduce leakage.

Climate change and biodiversity loss represent the most critical existential threats to Bangladesh. The country's geographic location makes it one of the most climate-vulnerable nations globally. Cyclones, floods, river erosion, sea-level rise, and salinity intrusion are already displacing thousands of people annually and undermining livelihoods.

The 'SDG Report 2025' Global climate finance remains fragmented and insufficient. Despite pledges, disbursements to countries like Bangladesh are slow, bureaucratic, and conditional. Loss and damage negotiations have yielded some commitments at the international level; however, translating these commitments into tangible support for affected communities in Bangladesh remains pending. SDGs 13 and 15 will remain unattainable without climate justice and scaled-up adaptation finance.

One of the most profound takeaways from the UN report is the data crisis. Monitoring SDG progress depends on reliable, timely, and disaggregated data. Yet, as the report notes, statistical systems in many countries remain underfunded and fragmented. The abrupt termination of the USAID-supported Demographic and Health Survey (DHS) in early 2025 exposes the fragility of global data systems.

For Bangladesh, this means losing key data on family planning, child nutrition, gender-based violence, and slum populations-data that inform national budgeting, policy design, and international benchmarking. Without a national investment in data sovereignty-through stronger statistical institutions, interoperable data platforms, and partnerships with academia and civil society-Bangladesh will be flying blind into the final years of the SDGs.

Institutionally, the governance landscape is increasingly recognised as a key determinant of SDG delivery. SDG 16-on peace, justice, and strong institutions-remains one of the least funded and least prioritised goals, globally and in Bangladesh. Yet its relevance is paramount. Transparent public financial management, inclusive planning, judicial independence, press freedom, and civic space are all necessary to ensure that development is democratic and accountable.

The SDG report calls for "urgent multilateralism"-a new social contract that places equity and participation at the heart of development. For Bangladesh, this means investing in local government capacity, opening political space for youth and civil society, and strengthening public service delivery mechanisms.

As the world moves toward 2030, the message from the United Nations is clear: the SDG framework remains within reach, but only if action is taken decisively and immediately. The final five years to 2030 are not merely a countdown-they are a choice. Bangladesh can choose to accelerate toward justice, resilience, and sustainability. Or, it can remain trapped in a cycle of incrementalism and vulnerability. The future is still unwritten-but time is running out.

Dr Matiur Rahman is a researcher and development professional.​

 

[Saif]

S&P affirmed ‘B+/B’ ratings for Bangladesh

The global rating agency ---S&P Global Ratings ---affirmed Bangladesh’s credit rating at B+/B, citing mainly recent improvement in its official foreign exchange reserve. It also said Bangladesh’s outlook is stable. “We affirmed our long-term sovereign credit ratings on Ban

thefinancialexpress.com.bd

S&P affirmed ‘B+/B’ ratings for Bangladesh

FE ONLINE REPORT
Published :
Jul 25, 2025 15:43
Updated :
Jul 25, 2025 15:44

The global rating agency ---S&P Global Ratings ---affirmed Bangladesh’s credit rating at B+/B, citing mainly recent improvement in its official foreign exchange reserve.

It also said Bangladesh’s outlook is stable.

“We affirmed our long-term sovereign credit ratings on Bangladesh at B+ and our short ratings at B. The outlook is stable,” said S&P on Friday.

It said macroeconomic polices enacted over the past 18 months – such as transitioning opt a more flexible exchange rate regime, allowing local currency Taka to depreciate and tightening the monetary policy – are helping to build foreign exchange liquidity.

But it said that the country faces heightened trade risk from relatively high US tariffs.

It also said that mooted elections in the first half of 2026 are likely to be a critical pivot point for more lasting political stability following the abrupt collapse of the Sheikh Hasina government in July 2024.​

 

[Saif]

No significant shift in non-RMG export earnings

Export of non-RMG products remained almost static over the past several years, indicating the country’s overreliance on RMG.

www.newagebd.net

No significant shift in non-RMG export earnings
Saddam Hossain 25 July, 2025, 22:49

Export of non-RMG products remained almost static over the past several years, indicating the country’s overreliance on RMG.

According to the Export Promotion Bureau, non-RMG sectors have accounted for only 17 per cent to 18 per cent of Bangladesh’s total export earnings for the past several years.

Exporters stated that insufficient and non-uniform policy support, economic challenges in buyer countries, and a lack of proper diversification continued dependence on RMG export.

In the financial year 2024-25, Bangladesh shipped export items worth $48.28 billion to its global destinations, where the earnings from RMG were $39.35 billion or about 81.49 per cent, meaning the share of non-RMG items only 18.51 per cent.

The major non-RMG items, including leather and leather goods, jute and jute goods, agricultural products, home textiles, and engineering products, generated $1.14 billion, $820.16 million, $988.62 million, $871.57 million, and $535.56 million respectively.

Apart from RMG items, only leather was able to reach the milestone of $1 billion, according to the EPB data.

‘Due to a lack of governmental policy support, the leather sector had been unable to break out of the $1 billion cycle for decades,’ said Md Nasir Khan, vice-president of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh.

Speaking to New Age, he also stated that Bangladesh lacks a unified policy and incentive facilities for all export-oriented sectors.New Age specials

‘Despite having domestic supply of raw materials and high-quality products, leather sector is lagging behind years after years,’ he added.

He also stated that the leather sector has the capacity to earn $10 billion, as it can add value of up to 90 per cent, thanks to its raw materials. However, the government destroyed this opportunity by transferring the industry to Savar without proper establishment and the required CETP.

According to the EPB data, the leather and leather goods sector earned $797.7 million in FY20, $1.17 billion in FY23, and $1.14 billion in FY25, indicating that the industry was unable to break the $1 billion cycle.

The jute and jute goods sector, once the country’s largest export earner, has experienced negative growth for a prolonged period.

In FY20, the sector earned $882.35 million, $911.51 million in FY23, and $820.16 million in FY25.

Speaking to New Age, KS Alam Babul, chairman of the Bangladesh Jute Goods Exporters Association, stated that the anti-dumping duty imposed by India on Bangladeshi jute goods has caused a setback.New Age specials

‘Some major buyers like Sudan, Syria and Iran are addressing either war situation or economic turmoil and sanctions, which impacted their imports,’ he added.

Moreover, they couldn’t accept large orders as all the government jute mills were closed, he added, saying that the private jute mills don’t have the capacity for bulk production.

‘We urged the government several times about reopening the jute mills under BJMC. However, we think an elected government could take the initiatives,’ he added.

Meanwhile, Farhad Ahmed Akand, chairman of the Bangladesh Jute Association, said that due to high time and cost consumption, farmers have lost interest in jute farming.

‘Along with commerce ministry, we are running a project through farmers so that they can produce jute in less time by using less water and space,’ he added.

They also stated that, due to the low price of fibre at the growers› level and the emergence of plastic products as an alternative, jute exports were impacted, along with the slashing of incentives on jute goods.

The agricultural products earned $862.06 million in FY20, $827.10 million in FY23, and $988.62 million in FY25.

An official of Alin Foods Exports Ltd. said that the government›s incentive cut, higher import costs of agri-inputs and other ingredients, impacted the export.

For instance, the rate of cash incentive for the sector has been reduced to 10 per cent from 20 per cent, he added.

Engineering products, another promising sector, has earned $529 million in FY20, $495 million in FY23, and $535.56 million in FY25.

Abdur Razzaque, president of the angladesh Engineering Industry Owners’ Association, told earlier that they need a dedicated industrial park or zones to establish compliant and global standard factory units to compete with international competitors so that they could tap $7 trillion global market of light engineering.

He also demanded that the policy be supported by removing tax and VAT-related issues.

Talking to New Age, M Masrur Reaz, chairman of the Policy Exchange Bangladesh, said that the country didn’t utilise its capacity and potential on non-RMG products.New Age specials

‘For leather sector, the authority didn’t strengthen the seamless connections among different value chains like rawhide collecting, processing, finishing and backward linkage,’ he added.

He also stated that a significant number of companies in the sector lacked standard certificates, such as LWG, which deterred foreign buyers from importing.

‘Most of our sectors beside RMG couldn’t achieve the proper efficiency of the global competitiveness. We also don’t have integrated planning, especially on infrastructure, finance, and skill,’ he added.

Bangladesh hasn’t witnessed sufficient FDI in emerging sectors besides the RMG, and these emerging sectors also have limitations in areas like global competitiveness, skills, and efficiencies. He urged the government to work for product diversification.

The exporters said that sometimes it seemed that policymakers didn’t want other sectors to export more, as it didn’t receive sufficient policy support.

To diversify products, the government must remove the discrimination between the RMG sector and all other export-oriented sectors, they added.​

 

[Saif]

Handling the economy under stress

Since taking over the rein of the country the interim government has been facing numerous challenges, from slow growth, high inflation and unemployment to delays in implementing crucial reforms across the judiciary, political system and economy. The law-and-order situation also remains unsati

thefinancialexpress.com.bd

Handling the economy under stress

Muhammad Mahmood
Published :
Jul 26, 2025 22:19
Updated :
Jul 26, 2025 22:27

Since taking over the rein of the country the interim government has been facing numerous challenges, from slow growth, high inflation and unemployment to delays in implementing crucial reforms across the judiciary, political system and economy. The law-and-order situation also remains unsatisfactory partly due to the lingering effects of the July uprising. Furthermore, there is a growing concern that the criminal syndicates run by ousted Hasina are regrouping and becoming active as reflected in the incidents that happened in Gopalganj recently.

Thus after almost close to a year in power, there remains a sense of unease about the future and optimism that the Yunus government can get the economy back on track while spearheading political reforms needed to rebuild a durable open democratic system and prevent another dictator from emerging. It is a monumental challenge.

The military has historically been involved in the country's politics as a major actor and its influence over the government in a democratic process is concerning and this has contributed to significant political instability. There are concerns now that in this unstable political situation, the army may decide to take a more direct hand in political governance.

While it is clearly understood what steps need to be taken to forestall the re-emergence of a Hasina type regime returning to power over the last 11 months, no clear policy outline has yet been made public by the interim government. And the reason for this delay remains a mystery given that some peripheral issues such as the humanitarian corridor and port management issues appear to have captured the media attention and public debate.

However, many are expressing concern that the interim government is being hemmed in by various political interests at home and abroad. The wide-ranging reform programmes that have been undertaken appear to be going nowhere including the constitutional reform which is possibly the most crucial reform issue to forestall emergence of another Shekh Hasina or a similar type of tyrant.

The new policy direction is important because political stability based on a well-functioning democratic process is the most essential prerequisite for the government to not only to attain political stability but to gain the ability to reform and revive the economy. In fact, the July uprising has provided "once in a life time opportunity" to bring about systemic change in the country's political system and culture.

The Bangladesh economy historically has shown resilience to global challenges and internal issues that usually contribute to causing major economic stress. Despite positive signs in exports and remittances, a combination of slow growth, high inflation and rising unemployment and income inequality suggest a potential stagflationary trend.

For a LDC like Bangladesh stagflation can have particularly severe consequences. It can lead to reduced growth, increased poverty, and greater vulnerability to debt crises. Stagflation can, in essence, act as a major impediment to economic growth and potentially destabilise the political and social system. Over and above, the country's reliance on exports makes it highly susceptible to fluctuations in the world economy. Now Trump Tariffs have added a new challenge.

On the other hand, the rise in global commodity prices (e.g., energy, food) directly impacts Bangladesh because the country is heavily reliant on import of those products. This increases production costs and can make goods less competitive in the global market. Uncertainty and high inflation can discourage both domestic and foreign investment, further hindering economic growth.

High inflation erodes the purchasing power of consumers, particularly low-income individuals who spend a larger portion of their income on essential goods and increases misery and hopelessness. Growing social misery and hopelessness are also reflected in an unprecedented rise in crimes. The government is addressing the issues of poverty and lawlessness with rhetoric instead of firm action.

Bangladesh has achieved, as claimed, an annual average growth rate of about 6.5 per cent over the last decade and a half. But the growth rate has slowed down considerably since the onset of the pandemic and the Russia-Ukraine conflict. The current macroeconomic crisis is manifested in slowing GDP growth, high inflation and unemployment, looming debt burden and a banking system in deep trouble.

The Bangladesh Bureau of Statistics (BBS) recently published the provisional GDP estimate for 2024-25 and it stands at 3.9 per cent. Early this year, multilateral and regional organisations such as the WB, IMF and ADB have downgraded Bangladesh GDP growth rate for 2025 to 3.3 per cent, 3.8 per cent and 3.9 per cent respectively. But they all provided a better growth forecast for 2026.

The economic slowdown is due to declining exports, reduced domestic and foreign investment, and falling agricultural output. Additionally, the fiscal year started in 2024 amid a turbulent and unstable political environment.

In 2024, Bangladesh's public debt was $181,008 million. This amount represented 40.13 per cent of the GDP. Bangladesh's private debt and household debt stand at 36.92 per cent and 6.69 per cent respectively of GDP in 2025.

Now the debt/GDP ratio is also set to rise further at the end of fiscal 2025-26 due to further deficit financing as evident in the current fiscal year's budget. Interest payment will account for 22 per cent of total revenue budget or 15.5 per cent of total spending. Between 1979-80 and 2024-25, Bangladesh always ran budget deficits except for four years. It indicates the budget has a structural deficit problem rather than cyclical.

According to the World Bank during the interim government's tenure, more than 2.7 million people have become new-poor. Of these, 1.8 million are women. Sluggish investment contributes to unemployment, leading to increased poverty. The interim government failed to prop up investment climate or investor confidence. Also, not much has been done to deal with underinvestment in infrastructure, a self-serving financial sector, educational decline, and a dysfunctional healthcare system.

The budget presented for fiscal year 2025-26 continued with the past fiscal practices except trimming the size by decreasing annual development expenditure by 13.2 per cent from the original allocation in the previous budget. The budget included unrealistic inflation and growth forecasts, which will not enhance investor confidence due to issues like infrastructure deficiency, bureaucratic corruption and delays and extortion rackets which cause distribution costs to outstrip production costs.

The proposed fiscal deficit of TK 1.25 trillion will further balloon the already accumulated public debt despite the austerity measures. In 2024, Bangladesh's public debt was $181,008 million. This amount represented 40.13 per cent of the country's GDP. Bangladesh's debt per capita in 2024 was $1,056. The public debt is composed of domestic debt (56 per cent of total debt) and external debt (44 per cent).

The RMG industry that grew and expanded since the early 1980s, reflects a structural inability to explore markets beyond primarily to the US and a few west European countries or to go up in value addition or product diversification. Wages have not kept up with inflation, reducing real incomes. High inflation and increasing unemployment are indicators of an economy potentially experiencing stagflation. Domestic and foreign investment are stagnant, and income inequality is increasing, thus further worsening economic turmoil. Worsening economic crisis cannot be addressed by ramping up rhetoric rather than action.

In 2024, Bangladesh exported goods worth nearly $8.4 billion to the US, of which US$7.34 billion were ready-made garments (RMG). More than four million people work in the RMG industry. If Bangladesh wishes to continue to rely on RMG exports, the industry needs to keep pace with technological progress and innovate to remain a relevant player in global apparel trade.

Bangladesh faces multifrontal economic challenges. The country's economic fortune is too closely linked to low-tech and low-skill based manufacturing and remittances coming from expatriate workers. And this has been the case for a long a time and that indicates deep inbuilt structural rigidities. Policymakers in Bangladesh appear to be unable or unwilling to address domestic structural deficiencies. The government must ensure a stable and predictable policy environment with a firm commitment to economic openness and to growth and that will help ease the structural limitations.

The interim government must implement reforms to attract investment, including FDI. That implies a strong focus should be placed on policies to reinvigorate investment, innovation and productivity. Far more importantly, a more radical reimagining of the economy is crucial that could create new opportunities and spark a long-overdue economic transformation. The effect of Bangladesh's multifrontal challenges depends on how quickly and effectively the government addresses them.​

 

[Saif]

Remittances: Bangladesh receives $1.93b in 26 days of July

Bangladeshi expatriates sent US$1.93 billion in remittances during the first 26 days of July, the opening month of the 2025–26 fiscal year,

en.prothomalo.com

Remittances: Bangladesh receives $1.93b in 26 days of July

UNB Dhaka
Published: 27 Jul 2025, 22: 06

Remittance Prothom Alo illustration

Bangladeshi expatriates sent US$1.93 billion in remittances during the first 26 days of July, the opening month of the 2025–26 fiscal year, said Arif Hossain Khan, executive director and Spokesperson of Bangladesh Bank.

Data from the central bank shows that remittance inflow during the same period of the previous fiscal year (FY2024–25) stood at $1.55 billion, marking a 23.97 per cent year-on-year growth.

Expatriates sent $106 million in remittances on 24 and 25 July alone.

In FY2024–25, Bangladeshi expatriates remitted a total of $30.32 billion—an all-time high.​

 

[Saif]

Remittance inflow rises by 33.6pc in first 27 days of July

Inflow of remittances witnessed a remarkable year-on-year growth of 33.6 per cent, reaching US$2,099 million in the first 27 days of July, according to the latest data of Bangladesh Bank (BB) issued today (Monday). During the same period last year, the country's remittance inflow was $15

thefinancialexpress.com.bd

Remittance inflow rises by 33.6pc in first 27 days of July

Published :
Jul 28, 2025 20:12
Updated :
Jul 28, 2025 20:51

Inflow of remittances witnessed a remarkable year-on-year growth of 33.6 per cent, reaching US$2,099 million in the first 27 days of July, according to the latest data of Bangladesh Bank (BB) issued today (Monday).

During the same period last year, the country's remittance inflow was $1572 million, BSS reports.

Expatriate Bangladeshis sent a record $30.33 billion in remittances in the fiscal year 2024-25 (FY25), marking the highest amount ever received in a single fiscal year in the country's history.

This figure reflects a 26.80 per cent increase compared to the $23.91 billion received in the previous fiscal year (FY24).​

 

[Saif]

Foreign debt: Bangladesh pays record $4.09b in one year

Bangladesh’s foreign debt repayment has exceeded $4 billion (400 crore dollars) for the first time. In the outgoing fiscal year (2024-25), the country paid back approximately $4.09 billion (409 crore dollars), including interest, on foreign loans. This is a record high. Never before has such...

en.prothomalo.com

Foreign debt: Bangladesh pays record $4.09b in one year
Special Correspondent Dhaka
Published: 28 Jul 2025, 14: 48

Bangladesh’s foreign debt repayment has exceeded $4 billion (400 crore dollars) for the first time.

In the outgoing fiscal year (2024-25), the country paid back approximately $4.09 billion (409 crore dollars), including interest, on foreign loans.

This is a record high. Never before has such a large sum been repaid in a single year. In the previous fiscal, repayments had amounted to $3.37 billion (337 crore).

These figures were obtained from the latest data of the Economic Relations Division (ERD) on foreign loan commitments, disbursements, and debt servicing.

Officials say that Bangladesh’s foreign debt burden is steadily increasing, posing a new challenge for the economy.

According to ERD sources, in the June-July period, Bangladesh repaid $4.0869 billion (408 crore 69 lakh dollars) in foreign loan principal and interest, meaning the country had to pay more than $340 million (34 crore dollars) on average each month.

The latest ERD report says, of the total government expenditure from July to June of the last fiscal, $2.59 billion (258 crore dollars) was paid as loan principal, and $1.49 billion (149 crore) as interest.

According to ERD sources, in the 2012-13 fiscal year, Bangladesh repaid a total of $1.1 billion (110 crore dollars) in foreign loans. Almost a decade later, in 2021-22, this amount rose to $2.01 billion (201 crore dollars). In 2022-23, it climbed to nearly $3 billion (300 crore dollars). In the just-concluded 2024-25 fiscal, Bangladesh had to repay $4.09 billion (409 crore dollars) in foreign loans, nearly a fourfold increase over the past 12 years.

Meanwhile, although foreign debt repayment has increased, both loan disbursement and loan commitments have declined.

In the first 11 months of the current fiscal, foreign loan disbursement amounted to $5.6 billion (560 crore dollars), compared to $7.02 billion (702 crore dollars) during the corresponding period of the previous fiscal.

Loan commitments in the same period amounted to $5.48 billion (548 crore dollars), while the figure was $7.92 billion (792 crore dollars) in the corresponding period last year.

In the previous fiscal, the total loan disbursement stood at $8.57 billion (857 crore dollars). Commitments stood at $8.32 billion (832 crore dollars).

The Asian Development Bank (ADB) topped the list of lenders, disbursing $2.52 billion (252 crore dollars) during the July-June period of the current fiscal year. It was followed by the World Bank and Japan. However, while funds were disbursed, India, China, and Russia made no new loan commitments in the current fiscal year.

Foreign debt repayment nearly quadrupled in a decade

Over the past several years, foreign debt repayment by Bangladesh has increased significantly.

According to ERD sources, in the 2012-13 fiscal year, Bangladesh repaid a total of $1.1 billion (110 crore dollars) in foreign loans.

Almost a decade later, in 2021-22, this amount rose to $2.01 billion (201 crore dollars).

In 2022-23, it climbed to nearly $3 billion (300 crore dollars). In the just-concluded 2024-25 fiscal, Bangladesh had to repay $4.09 billion (409 crore dollars) in foreign loans, nearly a fourfold increase over the past 12 years.

The burden of debt repayments is expected to increase further in the coming years, as repayment of principal and interest on several major projects is set to begin.

For example, repayments for loans used to build the Rooppur Nuclear Power Plant and the Third Terminal of Hazrat Shahjalal International Airport will begin soon.

These repayments are due to Japan. Meanwhile, repayments have already begun for loans used in the Karnaphuli River Tunnel and Metro Rail projects.

According to ERD officials, the pressure of foreign debt repayment is mounting as the grace periods for many large mega projects have come to an end.​

 

[Saif]

Remittance inflow rises by 31.5pc in 29 days of July

Published :
Jul 30, 2025 20:02
Updated :
Jul 30, 2025 20:03

Inflow of remittances witnessed a remarkable year-on-year growth of 31.5 percent, reaching US$2,276 million in the 29 days of July, according to the latest data of Bangladesh Bank (BB) issued.

During the same period last year, the country’s remittance inflow was $1734 million, reports BSS.

Expatriate Bangladeshis sent a record $30.33 billion in remittances in the fiscal year 2024-25 (FY25), marking the highest amount ever received in a single fiscal year in the country’s history.

This figure reflects a 26.80 percent increase compared to the $23.91 billion received in the previous fiscal year (FY24).​

 

[Saif]

Remittance inflow rises by 32pc in 30 days of July

Published :
Jul 31, 2025 19:29
Updated :
Jul 31, 2025 19:29

Inflow of remittances witnessed a remarkable year-on-year growth of 32 per cent, reaching US$2,368 million in the 30 days of July, according to the latest data of Bangladesh Bank (BB) issued.

During the same period last year, the country’s remittance inflow was $1794 million, reports BSS.

Expatriate Bangladeshis sent a record $30.33 billion in remittances in the fiscal year 2024-25 (FY25), marking the highest amount ever received in a single fiscal year in the country’s history.

This figure reflects a 26.80 percent increase compared to the $23.91 billion received in the previous fiscal year (FY24).​

 

[Saif]

BB to intervene in forex market

Bangladesh Bank (BB) will intervene in the foreign exchange market to curb volatility in the exchange rate and rebuild the country's foreign exchange reserves.

www.thedailystar.net

BB to intervene in forex market

Bangladesh Bank (BB) will intervene in the foreign exchange market to curb volatility in the exchange rate and rebuild the country's foreign exchange reserves.

This was announced in the BB's latest Monetary Policy Statement for the first half of fiscal year 2025-26.

The move came as pressure continued to mount on the taka due to persistent inflation, widening trade imbalance, and external headwinds, including a proposed tariff hike by the US.

The central bank reaffirmed its commitment to a flexible exchange rate regime but said it would adopt a more proactive approach to ensure market stability.

In May 2025, the BB transitioned to a more flexible exchange rate regime aimed at enhancing stability in the foreign exchange market.

The central bank said the regime remains essential for facilitating smoother adjustments to external imbalances, easing market pressures, and preserving reserves.

While the BB remains committed to flexibility, it retains the option to intervene to smooth out excessive fluctuations, it said.

This marks a more pragmatic shift as the central bank seeks to contain inflation and anchor market expectations without reverting to a fixed exchange rate system, it added.

The BB also acknowledged that greater exchange rate flexibility was necessary to offset the impact of declining export demand amid rising global trade tariffs.

To ensure transparency, the central bank publishes a reference exchange rate twice daily, which acts as a benchmark for market price discovery.

Its continued commitment to a flexible exchange rate regime is aimed at ensuring exchange rate stability and rebuilding reserves to better withstand external shocks, the statement added.​

 

[Saif]

Monetary policy on right track

Despite a gradual moderation of the inflation in the last six months, the central bank has decided to maintain its tight monetary stance for another six months by keeping the policy rate unchanged at 10 per cent. The announcement of the latest monetary policy statement (MPS) last week also indicate

thefinancialexpress.com.bd

Monetary policy on right track

Asjadul Kibria
Published :
Aug 03, 2025 00:01
Updated :
Aug 03, 2025 00:01

Despite a gradual moderation of the inflation in the last six months, the central bank has decided to maintain its tight monetary stance for another six months by keeping the policy rate unchanged at 10 per cent. The announcement of the latest monetary policy statement (MPS) last week also indicated that the central bank prefers to sacrifice growth for the time being by making credit flow for investment costly. The statement made it clear that the primary aim of the MPS for the first half of the current fiscal year (FY26) is 'to decelerate the rate of inflation further while maintaining exchange rate stability and strengthening financial stability.' Thus, Bangladesh Bank announced the third consecutive tight monetary stance, finding it successful to a large extent in reducing the inflationary pressure. The rate of inflation came down to 10.89 per cent in December last from 11.66 per cent in July last year. It decreased further to 8.48 per cent in June this year or at the end of FY25. Now, the latest MPS is designed to bring down the rate of inflation below 7 per cent in line with the budget target by the end of the current fiscal year. The interim government, in the national budget for FY26, has set a 5.5 per cent GDP growth target with an aim to contain the rate of inflation within a 6.5 per cent ceiling.

There is always a debate on the effectiveness of the tight monetary policy to curb inflation in developing countries like Bangladesh, mainly due to the presence of a big informal economy. Nevertheless, developing nations have started to manoeuvre the monetary policy to keep inflation in check. Though the result is mixed, monetary or credit policies in these countries have become a critical instrument to deal with inflation, as the ultimate success of the tight monetary stance is linked with the supportive fiscal and trade policies.

Bangladesh Bank started to announce half-yearly MPS around two decades ago, opening the window of policy transparency. Over the years, the MPS has been modified in line with the global standard practices. In recent years, the central bank has gradually shifted to an interest rate targeting framework from the traditional monetary targeting framework. This shift, which involves setting the key policy rate based on the desired level of interest rates in the economy, is a challenging transformation which is paying off slowly.

Under the interest rate targeting monetary policy framework, Bangladesh Bank is using the key policy rate, the repo rate to be precise, along with two supportive tools ?the Standing Lending Facility (SLF) and the Standing Deposit Facility (SDF) ? to operate the monetary policy. The MPS for the first half of the current fiscal year keep the policy rate unchanged at 10 per cent along with the SLF rate at 11.5 per cent, and the SDF rate at 8.0 per cent. It means that banks and financial institutions have to pay at least 10 per cent interest to borrow from the central bank, using treasury bonds, when there is a dearth of capital. To offset the high cost of borrowing, commercial banks have to charge higher interest rates for providing credit to their clients. The high policy rate will drive the banks to mobilise deposits from people to pay loans to traders and investors. If banks do not offer a higher rate of return, depositors will go for government securities bearing a higher rate of return. In this process, the money supply will be reduced from the market, and aggregate demand will also shrink. So, the price level will also decline.

Now, higher interest rates will make private investment more expensive as borrowing from the bank will be expensive for businesspeople. The net result will be a slowdown in private credit growth. The MPS has projected that private sector credit growth would be 7.20 per cent by the end of December this year, and it would increase modestly to 8.0 per cent at the end of the current fiscal year or June next year. With actual credit growth standing at 6.40 per cent at the end of FY25, the central bank found the projected growth of private sector credit reasonable. "Private sector credit growth is projected to be 8.0 per cent, assuming the contractionary nature of monetary policy aimed at containing persistently high inflation and lower credit demand from non-bank financial corporations," said the MPS.

Business bodies have already expressed their concern on tight monetary stance fearing further squeeze in credit flow. They said that businesses have been experiencing a tough time due to uncertain business environment, deterioration of law and order and disruption of energy supply. Now, the continuation of high interest regime will make matters worse, they argued. Though the concern expressed by the private sector is valid to some extent, it needs to be contextualised. The businesses have already adjusted with the high rate of interest and the latest MPS does not hike the policy rate further indicating that there is no need to rush for increasing the interest rates by the banks or financial institutions. Moreover, the MPS has stressed addressing the alarming level of non-performing loans through various measures. It will help the banks to improve their efficiency and may reduce the cost of lending. Private sector also needs effective intervention from the government to improve law and order so they might do their business smoothly.

Though the central bank has made it clear that it will ease the monetary stance when inflation comes down below 7 per cent, it may not be easy to do so due to various external and internal factors. Donald Trump, the president of the United States (US), has already launched a tariff war, putting global trade in turmoil. After a hectic negotiation, Trump imposed a 20 per cent additional tariff on Bangladesh, which was initially proposed at 37 per cent in April this year. Due to Trump tariffs, the cost of imports will increase, and so there will be a surge in imported inflation. The MPS also indicated this, saying that the US tariff-induced nominal depreciation of the local currency, or Taka, may further spur inflation.

The national election will be held early next year. The announcement of the date and election schedule will ease the uncertainties involving the election. At the same time, there will be a rise in the money supply during the electioneering. Candidates will spend a huge some of money to woo electorates. The increase in money supply is likely to add to inflation and make it difficult for the central bank to ease the monetary stance.​

 

[Saif]

Current account returns to surplus after 8 years

Bangladesh’s current account balance returned to surplus in the fiscal year 2024–25 for the first time in eight years, driven by a surge in remittance inflows and export earnings, alongside sluggish import growth reflecting weak investment demand...

www.newagebd.net

Current account returns to surplus after 8 years
High dollar inflows, sluggish investments drive turnaround
Mostafizur Rahman 03 August, 2025, 00:37

Bangladesh’s current account balance returned to surplus in the fiscal year 2024–25 for the first time in eight years, driven by a surge in remittance inflows and export earnings, alongside sluggish import growth reflecting weak investment demand.

According to the latest data from the Bangladesh Bank, the current account posted a surplus of $981 million in FY25, a dramatic turnaround from the $6.6 billion deficit recorded in FY24.

The last time the country saw a current account surplus in FY16, when it stood at $4.26 billion. Since then, persistent deficits continued for eight consecutive fiscal years until this reversal.

This shift comes as a major relief for the country’s external sector, which has faced persistent deficits, dwindling foreign reserves, and volatility in exchange rates over recent years.

The current account is a vital part of a country’s balance of payments (BoP), reflecting the net flow of goods, services, primary income (such as interest and dividends), and secondary income (mainly remittances).

As a result of these developments, the overall balance of payments turned to a surplus of $3.6 billion in FY25 after three straight years of deficits. In FY21, the BoP was in surplus by $9.27 billion, but then shifted into deficit in subsequent three years years - $6.6 billion deficit in FY22, $8.22 billion in FY23, and $4.3 billion in FY24.

‘This improvement was driven mainly by the return of the current account balance to a surplus from a large deficit. A surge in remittance inflows and robust export earnings in tandem with sluggish imports contributed to the reversal of the current account balance to a surplus of $981 million in FY25,’ according to BB’s new monetary policy statement.

The pressure on the external sector had broadly stabilised in FY25, supported mainly by flexibility in exchange rates, a balanced policy-mix of tight monetary policy and budget retrenchment, inflow of foreign assistances, a surge in remittance inflows, and a robust export growth, it said.

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), said the improvement in the current account balance is certainly a positive development.

He noted that the surplus was primarily driven by a sharp rise in remittance inflows and export earnings, along with weak import growth. However, he cautioned that the subdued import growth is not necessarily good news, as it signals sluggish private sector investment.

He pointed out that low investment activity reflects underlying concerns in the economy, including global trade uncertainties, domestic political instability, and a deteriorating law and order situation. These factors, acting together, have discouraged businesses from investing and expanding.

Raihan said, ‘If we achieve a surplus while private investment is strong and the economy is vibrant, that would be a much more positive scenario,’ he said.

In FY25, the improvement in current account came primarily from a surge in secondary income, which includes remittances sent by Bangladeshi workers abroad.

Remittance inflows jumped by nearly 27 per cent to $30.33 billion in FY25 from $23.92 billion in the previous fiscal year.

Overall secondary income rose to $31.43 billion, up from $24.55 billion in FY24.

Export earnings also contributed positively, growing by 8.6 per cent year-on-year to reach $48.3 billion in FY25.

Although import payments increased slightly by 2.4 per cent, the trade deficit narrowed to $20.5 billion from $22.4 billion a year earlier.

Moreover, the deficit in services trade shrank to $3 billion, down from $3.81 billion in FY24, reflecting better performance in sectors like IT services and transport.

On the downside, the primary income account remained in deficit, which widened modestly to $4.97 billion in FY25 from $4.82 billion in FY24.

Despite the gains in current account and exports, the financial account of the BoP posted a smaller surplus of $3.2 billion in FY25, compared with $4.55 billion in FY24.

As of July 24, 2025, the country’s foreign exchange reserves stood at $25 billion, based on the IMF’s updated calculation methodology.​

 

[Saif]

Bangladesh economy made a turnaround: Salehuddin

Finance Adviser Dr Salehuddin Ahmed today (Monday) said that Bangladesh's economy has made a turnaround, with foreign currency reserves strengthening and traders regaining confidence. “The government is implementing several measures to give a boost to the economy,” he said while sp

thefinancialexpress.com.bd

Bangladesh economy made a turnaround: Salehuddin

Published :
Aug 04, 2025 21:02
Updated :
Aug 04, 2025 21:02

Finance Adviser Dr Salehuddin Ahmed today (Monday) said that Bangladesh's economy has made a turnaround, with foreign currency reserves strengthening and traders regaining confidence.

“The government is implementing several measures to give a boost to the economy,” he said while speaking as the chief guest at a discussion marking the ‘July Uprising Day’ at the central bank headquarters in the city, UNB reports.

Financial Institutions Division Secretary Nazma Mobarek and BB Governor Dr Ahsan H Mansur attended the discussion as the chief guest, while BB Deputy Governor Md Zakir Hossain Chowdhury presided over the programme.

Mentioning the ‘July Uprising’ as a difficult time, Salehuddin said, “We pay tribute to martyrs of the July Uprising and wish the injured a speedy recovery. Sacrifices of the students and common people will not be forgotten.”

Ahsan H Mansur said the government is working to bring down the general point to point inflation rate to 3 -5 per cent.

“Our aims are to bring inflation down to 3 to 5 per cent. I hope it is possible. We’re implementing different policy measures to this end,” he said.

He said inflation has not yet come down at the expected level, although the fiscal measures are being implemented to control domestic borrowings.

Regarding the BB’s autonomy, the governor said that they want to transform the central bank into a completely autonomous institution that will not be influenced by government machinery.

"We want to reshape focus of the BB. We'll leave the activities that are not core central banking. We'll give utmost priority to issues linked with compliance, regulations and enforcement," he added.

He said that if autonomy is implemented in the central bank, the picture of the country’s financial sector will change. “We may not stay, but we want to make some changes,” he added.​

 

[Saif]

Remittance inflow to Bangladesh soars by 29.48pc in July

Bangladesh received a record-breaking remittance of $2.48 billion in July, the first month of the 2025–26 fiscal year, marking a robust 29.48 per cent year-on-year growth. According to the latest data released by Bangladesh Bank on Saturday (3 August), the inflow translates to approxima

thefinancialexpress.com.bd

Remittance inflow to Bangladesh soars by 29.48pc in July

Published :
Aug 03, 2025 20:59
Updated :
Aug 03, 2025 20:59

Bangladesh received a record-breaking remittance of $2.48 billion in July, the first month of the 2025–26 fiscal year, marking a robust 29.48 per cent year-on-year growth.

According to the latest data released by Bangladesh Bank on Saturday (3 August), the inflow translates to approximately Tk 302.3 billion, calculated at the current exchange rate of Tk 122 per US dollar.

This notable rise stands in sharp contrast to the same period last year, when remittances totalled $1.91 billion. In July 2024, remittance inflows had dropped significantly due to calls on social media urging expatriates to halt money transfers in protest against political unrest.

Following subsequent political changes, the remittance trend has since gained strong momentum, as per a UNB report.

Bangladesh Bank officials attribute this upward trajectory to several proactive government measures, including the 2.5 per cent cash incentive on remittances, stricter regulation of informal channels such as the hundi system, and overall improvements in the formal banking infrastructure.

These efforts are not only encouraging expatriates to use legal channels but are also contributing to a healthier foreign exchange reserve.

"This follows a strong performance in June, when remittances reached $2.82 billion, marking an 11 per cent increase over the same period the previous year," said Arif Hosain Khan, Executive Director and spokesperson of Bangladesh Bank.

He noted that the previous fiscal year (FY2024–25) saw record-breaking remittance inflows, totalling $30.33 billion—a significant 27 per cent increase from the $23.74 billion received in FY2023–24—setting a new all-time high for annual remittances.

"The continuous rise in remittance inflow is bringing stability to the economy and providing much-needed relief to the country's dollar supply," Arif Hosain added.​

 

[Saif]

Sluggish investment, joblessness persist

The interim government has checked to some extent macroeconomic headwinds it inherited from the ousted Awami League regime, but failed to infuse enough dynamism into the economy to overcome sluggish private sector investment and unemployment over...

www.newagebd.net

ECONOMIC RECOVERY
Sluggish investment, joblessness persist
Shakhawat Hossain 05 August, 2025, 00:01

File photo

The interim government has checked to some extent macroeconomic headwinds it inherited from the ousted Awami League regime, but failed to infuse enough dynamism into the economy to overcome sluggish private sector investment and unemployment over the past one year.

After taking office on August 8, 2024, the interim government went for rebuilding the economy shattered by political figures and Awami League-linked businesses during the ousted regime.

The looting of banks, corruption and economic mismanagement had pushed the economy to its nadir during the authoritarian AL regime which was toppled on August 5, 2024, in a mass uprising.

Economists lauded the economic policymakers under the interim government for securing record amount of $3.6 billion budget supports from the multilateral and bilateral lenders to make up for the revenue shortfall of about 1 lakh crore and rebuilding the foreign currency reserve which had faced serious strains since the middle of 2022.

Buoyant by a record growth in remittance and a positive growth in export, the interim government has made an early turnaround in external trade position.

The current account balance improved at $432.0 million negative during the July-May period of the past financial year of FY25 from $6,116 million negative during the same period of FY24, thanks to a 26 per cent year-on-year growth in remittance and 9 per cent growth in exports until FY25.

The foreign exchange reserve reached $24.54 billion in July 10, 2025, from $21.06 billion one year back.

But the improvement in foreign exchange reserves and almost a stable currency exchange rate could not dispel shakiness by the businesses over new investment, which is evident in less credit growth in the private sector, the main driving force of the economy.

Besides, rising poverty amid elevated inflation of 9 per cent, political uncertainty, sliding law and order situation marked by frequent mob violence incidents and the new US tariff policy have caused more concerns for the interim government on way to a full-fledged macroeconomic recovery.

Finance adviser Saleuddin Ahmed on July 15 told New Age that they had been able to stop the rot that had pushed the economy to its nadir.New Age specials

‘The macroeconomic situation has been stabilised,’ he said, adding that further improvements would come in the economy later.

Referring to a 3.97 per cent growth in the gross domestic product, the weakest since 3.45 per cent recorded in the Covid pandemic-hit 2020-21 financial year, Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, an independent research organisation, said that the economy could not be freed from a low-level of performances.

He said that the overall imports recorded 4.66 per cent growth in the July-May period of FY25 from 10.61 per cent negative growth in the same period of FY24, but that could not stop the falling imports of capital machinery and intermediate goods necessary for industrial production.

A Bangladesh Bank Update released on July 10 showed that the import of capital machinery recorded 25.56 per cent negative in the July-April period of FY25 from 23.86 per cent negative in the same period of FY24 and that of intermediate goods 8 per cent negative from 12 per cent negative.

The number of unemployed people in the country increased to 27.3 lakh in the fourth quarter of 2024 compared with that of 24 lakh in the same period of 2023, according to the Bangladesh Bureau of Statistics.

The unemployment rate climbed to 4.63 per cent in the October-December period of 2024 compared with that of 3.95 per cent in the same period of 2023.

Economists have identified a less than 7 per cent credit growth to the private sector in the July-May period of FY25 against the backdrop of disruptions to business activities in the more than one-month-long mass uprising, sliding law and order and political uncertainty for the weak economic activities.

Blaming slow and tinkered reforms in the areas of banking, revenue, fiscal and trade and investment, the economists said that the interim government had wasted a rare opportunity that came along after the July uprising to make visible and quick progresses on the economic front.

‘Unlike the political front, nobody opposes the swift reform on the economic side,’ said M Masrur Reaz, chairman and chief executive officer of the Policy Exchange Bangladesh, an independent advisory firm.

Noting the failure in bringing about positive changes in trade and investment over the past one year, he said that employment and private sector investments had been adversely impacted.

One in every four persons in the country is poor and about 3.98 crore individuals are suffering multidimensional poverty, according to the Multidimensional Poverty Index released by the General Economics Division on July 31.

An additional 30 lakh people in Bangladesh are expected to fall into extreme poverty in the current calendar year, as the rate is projected to rise from 7.7 per cent to 9.3 per cent, according to the Bangladesh Development Update released by the World Bank in April.

The WB forecast that the weak situation in the labour market would continue in the current year, while general people, particularly those vulnerable to extreme poverty, might register a decline in their income.

The discouraging outlook by the WB was disseminated just after the US president Donald Trump announced ‘reciprocal’ tariffs against its trading countries, including Bangladesh.

The US president had put the rate for Bangladesh at 35 per cent, but lowered it to 20 per cent following three rounds of tariff talks between Dhaka and Washington and Bangladesh’s moves to reduce trade deficit between the two countries. The rate initially announced by the Trump administration was 37 per cent.

In 2024, Bangladesh exported goods worth about $8.4 billion to the US, its single biggest export market. Of the export earnings, $7.34 billion accounted for readymade garments. In the year, the country imported US goods worth $2.2 billion.

Former World Bank Dhaka office chief economist Zahid Hussain said that the lowered tariff rate had created an upside opportunity for Bangladesh.

Bangladesh finds itself with a notable tariff advantage over India and nearly on an equal footing with countries like Pakistan, Vietnam, Indonesia and the Philippines, said the economist.​