[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

The following video talks about Bangladesh's economic transformation from a bottomless basket to a fast growing economy in Asia. Enjoy!!!

 

[Saif]

undefined | The Financial Express

thefinancialexpress.com.bd

ECONOMY LIFTED FROM EDGE OF ABYSS: FINANCE ADVISER
Restoring business confidence biggest of challenges ahead

FE REPORT
Published :
Aug 07, 2025 00:45
Updated :
Aug 07, 2025 00:45

Listing challenges facing the economy ahead, like high inflation, unemployment, energy shortage and higher US tariffs, Finance Adviser Dr Salehuddin Ahmed says restoring business confidence tops it all.

On the achievements of the post-uprising interim government on the economic front so far, he told reporters Wednesday that the country's economy had been lifted from the edge of an abyss.

"One needs to have vision and acumen to see it instead of watching it from the surface," he says about the economic recovery process.

"There were very precarious challenges before the interim government when it took office and now the country could come to a place of comfort," he adds.

The finance adviser was talking to the newsmen after two meetings of the Advisers' Council Committee on Economic Affairs and Advisers' Council Committee on Government Purchase at Bangladesh Secretariat in the capital.

"But, of course, challenges are there. We have inflation, unemployment, energy, and tariff issues. And the biggest challenge is to restore the confidence of businesspeople and to get trade and commerce moving a little faster, which now has slowed," said Mr Ahmed.

Replying to a query whether inflation has come down to a comfortable level, the Finance Adviser said it would take some more time.

"Inflation is not like that, we pulled the horse by the reins. If you want to ride the horse, you have to pull your head up. Inflation is not like that, we reduced everything in one day. It is decreasing, but non-food inflation is a bit challenging for us."

Regarding budget deficit -- a perennial problem many attribute to lapses and loopholes in revenue-and tax-collection systems -- Mr Ahmed said according to provisional estimation the deficit will be 3.6 per cent which the government wanted to keep within 4.5 per cent.

To a query on reforms, he said some reforms had already been done while mid-term and long-term reforms like implementation of bank resolution, reforms linked to capital market, and amendment of the ordinance on the National Board of Revenue, would take time, preferably to be completed by December next.

The economic pointsman under the interim government of Bangladesh thinks it could have been further better had the United States lowered the reciprocal tariff further. Regarding the 20-percent tariff he said: "This is not bad -- if you compare with other countries, then Bangladesh is not in a bad position."

Asked whether Bangladesh will seek further tariff cut, the adviser indicated that the government would continue negotiation with the US aiming to further lower the tariff rate.​

 

[Saif]

Remittance inflow rises by 81.6pc in 5-day of August

Inflow of remittances witnessed a remarkable year-on-year growth of 81.6 percent, reaching US$328 million in the first five days of August, according to the latest data of Bangladesh Bank (BB) issued. During the same period last year, the country’s remittance inflow was $181 million, reports

thefinancialexpress.com.bd

Remittance inflow rises by 81.6pc in 5-day of August

Published :
Aug 06, 2025 18:05
Updated :
Aug 06, 2025 18:05

Inflow of remittances witnessed a remarkable year-on-year growth of 81.6 percent, reaching US$328 million in the first five days of August, according to the latest data of Bangladesh Bank (BB) issued.

During the same period last year, the country’s remittance inflow was $181 million, reports BSS.

During the July 2025-05 August 2025 of the current fiscal year, expatriates have sent remittances of $2,806 million, which was only $2094 million during the same period of the previous fiscal year.

Accordingly, remittances have increased by 33.9 percent.

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]

Forex reserve crosses $30b again

The country’s gross foreign exchange reserve has once again crossed $30 billion amid increased remittance and export earnings...

www.newagebd.net

Forex reserve crosses $30b again
Staff Correspondent 05 August, 2025, 23:08

The country’s gross foreign exchange reserve has once again crossed $30 billion amid increased remittance and export earnings.

According to Bangladesh Bank, the foreign exchange reserve of the country reached $30 billion on July 4, up from $29.8 billion on July 31.

In June 30, Bangladesh’s foreign exchange reserve hit $31.72 billion after more than two years.

The reserve dropped to $29.53 billion on July 8 after the payment of import bills worth $2.19 billion was made to the Asian Clearing Union for May and June.

Foreign exchange reserves, calculated under IMF guidelines, stood at $24.97 billion on July 4.

The country received around $4 billion from International Monetary Fund, World Bank, the Asian Development Bank and Japan International Cooperation Agency at the end of June which contributed most to the jump in reserve balance.

Besides, remittance inflow and export earnings soared in current months.

According to Bangladesh Bank data, remittance inflow surged by 29.5 per cent to $2.47 billion in July from 1.91 billion in the same month in 2024.

Remittance inflow crossed the $30 billion mark for the first time in a single fiscal year, reaching $30.32 billion in FY2024–25. It marked a 26.8-per cent increase from $23.91 billion of FY24.

The export earnings in July, the first month of the 2025-26 financial year, witnessed a 24.9 per cent robust growth to $4.77 billion.

The BB follows the IMF’s Balance of Payments and International Investment Position Manual, 6th edition (BPM6), for calculating gross and net international reserves.

Bangladesh’s trade deficit, although still large, also showed slight improvement in FY25.

The gap narrowed to $20.5 billion, compared with $22.4 billion a year earlier.

The Bangladeshi taka has continued to weaken against the US dollar, reaching Tk 123 per dollar due to a dollar shortage and pressure on banks to settle import payments.

The interbank exchange rate was Tk 108.63 a dollar on May 25 amid pressure on banks to settle import payment obligations.

The exchange rate was Tk 86 a dollar in January 2022 and Tk 94.7 in July 2022.​

 

[Saif]

Short-term economic reforms by Dec: Salehuddin

Short-term reforms will be brought about in the economic sector by December this year, said Finance Adviser Salehuddin Ahmed yesterday.

www.thedailystar.net

Short-term economic reforms by Dec: Salehuddin

Short-term reforms will be brought about in the economic sector by December this year, said Finance Adviser Salehuddin Ahmed yesterday.

Speaking to journalists after a meeting of the Cabinet Committee on Government Purchase, he said, "My target is to complete bringing about some reforms by December. We've already met a few immediate needs."

"There are some other reforms that are mid-term and long-term, like bank resolution, which will take a bit more time," he said.

"I went to Bangladesh Bank the day before yesterday—they've created a roadmap. Its implementation will come next," said Ahmed.

He said that the government will complete the separation of tax policy from tax implementation soon.

"We'll amend the ordinance slightly and get that done. The manpower issue will be settled—that won't be too difficult," he said.

In response to a question about the country's economic situation under the interim government, he said, "We've come a long way up from the edge of the cliff."

"To truly understand this, you need both vision and insight. It isn't right to just look at the surface and make superficial comments," said the finance adviser.

"Over the past year, the economy has regained a fair amount of stability. But definitely, there are still many challenges—like inflation, employment, and the issue of US tariffs," he said.

"The biggest challenge now is to restore business confidence and inject some momentum into trade and commerce, which has slowed down," he added.

Regarding the tariff issue, he said, "It has come down from 35 percent to 20 percent. Compared to other countries, that's not bad."

"Now we need to sign an agreement with the US—that hasn't happened yet. Once it happens, the details will be finalised," said Ahmed.​

 

[Saif]

NBR revenue targets and ground realities

The government must proceed with prudence and fiscal discipline, ensuring that even with reduced allocations, development priorities are met, and austerity is maintained across governance Despite repeated calls from businesses and think tanks to enhance the NBR's revenue mobilisation effor

thefinancialexpress.com.bd

NBR revenue targets and ground realities

FE
Published :
Aug 07, 2025 23:41
Updated :
Aug 07, 2025 23:41

The government must proceed with prudence and fiscal discipline, ensuring that even with reduced allocations, development priorities are met, and austerity is maintained across governance

Despite repeated calls from businesses and think tanks to enhance the NBR's revenue mobilisation efforts in a systemic manner, shortfalls in collection have become a recurring issue. A report by The Financial Express, citing official sources, reveals that the NBR must collect nearly 35 per cent more revenue in FY26 than in FY25 to meet its ambitious target. The income tax wing alone is tasked with a 43 per cent increase, reflecting the pressure across all three revenue wings. The targets set for FY26 are: income tax-- 42.63 per cent higher than FY25; value added tax (VAT)-- 30.49 per cent higher, and customs duty-29 per cent higher. To meet the total revenue goal of Tk 4.99 trillion, the NBR needs to increase collections by approximately 35 per cent, compared to Tk 3.70 trillion collected in FY25. Many observers argue that the persistent revenue shortfall is partly due to unrealistically high targets, which are often set without adequately assessing the prevailing economic conditions. Businesses continue to struggle with rising production costs, reduced profitability, and uncertainty, all of which constrain their ability to pay higher taxes. Economists have voiced concerns that such inflated targets may lead to aggressive tax collection measures, placing undue burden on taxpayers. They also point out that the current economic environment does not support such high expectations for tax and duty revenues.

In FY25, overall revenue growth was a mere 2.23 per cent-one of the lowest in NBR's history-amid months of political instability. In the final month (June), collections fell 37.6 per cent short of the monthly target, and registered a 19 per cent year-on-year decline. According to NBR officials, this shortfall stemmed from internal disruptions, poor execution of the Annual Development Programme (ADP), weak private investment, and a sluggish business environment, following the July uprising last year. Furthermore, VAT collection saw an abrupt decline, causing revenue growth to fall below 9 per cent year-on-year in May, the lowest in 12 months. Despite these setbacks, the overall growth in revenue collection stood at about 15 per cent, which is still far below what is required to meet the FY26 target. On the customs side, imports rose by 1.4 per cent over the past 11 months compared to the same period last year, while customs duty realisation grew by 13 per cent.

A critical question arises: will the revenue shortfall severely impact development spending? In response, Finance Adviser Dr. Salehuddin Ahmed noted that the FY26 budget has been framed conservatively, with reduced expenditure plans to account for potential shortfalls. According to Ministry of Finance data, public spending may decline to 12.7 per cent of GDP, and the development budget has been set at the lowest level in four years.

Given the circumstances, the government must proceed with prudence and fiscal discipline, ensuring that even with reduced allocations, development priorities are met, and austerity is maintained across governance.​

 

[Saif]

Inflation up again after brief relief on farm bounty

Inflation takes an upturn again, after a brief relief on bounteous agricultural harvests, with July rate climbing to 8.55 per cent by official count released Thursday. Bangladesh Bureau of Statistics (BBS) data show the point-to-point inflation rate in July 0.07- percentage-point higher over the p

thefinancialexpress.com.bd

Inflation up again after brief relief on farm bounty
July rate up at 8.55pc, despite govt bid to tame market

FE REPORT
Published :
Aug 08, 2025 00:46
Updated :
Aug 08, 2025 00:46

Inflation takes an upturn again, after a brief relief on bounteous agricultural harvests, with July rate climbing to 8.55 per cent by official count released Thursday.

Bangladesh Bureau of Statistics (BBS) data show the point-to-point inflation rate in July 0.07- percentage-point higher over the previous month of June.

And this upturn breaks a breather lasting previous three consecutive months, as, reports show, kitchen market takes in some heat from price rises of numerous farm produce.

In June, the inflation rate was recorded at 8.48 per cent, as per the BBS data.

In the corresponding period in July 2024, the BBS calculated the inflation at 11.89 per cent -- the highest in recent times.

The current interim government targets to tame the average inflation within 6.5 per cent during this fiscal year (2025-26).

According to the national statistical bureau, food inflation increased to 7.56 per cent last month from 7.39 per cent in June.

Preceding the latest uptrend, the month-on-month inflation had steadily decreased from 9.35 per cent in March to 9.17 per cent in April, to 9.05 per cent in May, and to 8.48 per cent in June, the official statistics show.

Townsmen happen to bear the brunt of higher inflationary pressure compared to villagers as the point-to-point inflation in urban areas was recorded 8.95 per cent, 0.40-percentage-point higher than the average rate in July.

On the other hand, the inflation in the rural areas was recorded at 8.55 per cent, same as the previous month.

According to BBS findings, the food-inflation rate in urban areas last month was 8.04 per cent while it was 7.99 per cent in the previous month.

Non-food inflation in towns was recorded at 9.55 per cent in July in a nominal rise from 9.53 per cent in the previous month of June.

For the rural Bangladesh, the food inflation was 7.36 per cent and the non-food inflation 9.73 per cent last month. In the previous month, the two rates were recorded at 7.14 per cent and 9.72 per cent respectively.

The 12-month average inflation in Bangladesh was still high at 9.77 per cent between August 2024 and July 2025, according to BBS data.

In the corresponding period between August 2023 and July 2024, the inflation rate was 9.90 per cent.

Meanwhile, BBS also unveiled the Wage Rate Index (WRI) for the month of July, showing a slight rise.

According to the statistics, the WRI last month was 8.19 per cent, 0.01-percentage-point higher than in the previous month of June.​

 

[Saif]

Digital platform for transparent fiscal management of SoEs

There is no gainsaying the importance of keeping a government running effectively within its budget. So, the entire process of procuring its funds, allocating those, monitoring their use and, finally producing financial report are the key areas of fiscal management. Since human bias and error

thefinancialexpress.com.bd

Digital platform for transparent fiscal management of SoEs

FE
Published :
Aug 08, 2025 22:44
Updated :
Aug 08, 2025 22:44

There is no gainsaying the importance of keeping a government running effectively within its budget. So, the entire process of procuring its funds, allocating those, monitoring their use and, finally producing financial report are the key areas of fiscal management. Since human bias and errors can prejudice the outcome of this exercise, the need for digitalizing the procedure cannot be overstated. And that is more so when it comes to ensuring the transparency and accountability of the process. According to the global lender, the International Monetary Fund (IMF), comprehensive, transparent, reliable and timely public reporting on the state of public finances is critical for effective fiscal management and accountability. Because, it helps ensure that the government has an accurate picture of its finances when making economic decisions including costs and benefits of any policy changes and potential risks to public finances. More importantly, it provides the legislature, markets and citizens with the information they need to hold the government accountable.

In this connection, the body under the Finance Ministry, Finance Division, in short, FD, which is responsible for controlling government expenditure and national budget has recently showcased at a workshop in the city an online digital platform with the acronym, SABRE+ system, developed by it (FD) to, what it said, enhance transparency and accountability in the management of the State-Owned Enterprises (SoEs) and autonomous bodies. Standing for 'State-owned Enterprises and Autonomous Bodies Budget, Reporting, and Evaluation System', SABRE+ system, is designed to streamline the process of budget preparation, financial reporting and performance evaluation for the SoEs and autonomous bodies. To distinguish the special features of 'SABRE+' vis-à-vis other types of online digital platforms, the Finance Adviser of the interim government, Dr Salehuddin Ahmed, who spoke at the said workshop reportedly pointed out that the system in question was more than just a digital tool as it represents a pivotal shift towards data-driven, transparent and accountable governance across the SoEs and autonomous bodies.

True, reliable data and internal control are the sine qua non of good governance. Hopefully, the SABRE+ system will be able to meet the objective by enabling the government to carry out timely evaluation of its fiscal-related activities. It is believed, once implemented efficiently, the new online platform will help avoid discrepancies in budget planning so its financial aspect could be managed well. Definitely, it is a step forward towards transitioning to a framework that is based on performance and compliance. While appreciating the good work that has gone into developing the online system, it is also important to keep in mind that any machine, however smart, requires humans to run it. In that case, unquestionable integrity of the man behind the machine will always remain the first condition to meet before it can deliver without bias and prejudice.

So, one would like to believe that the development of the new, online digital tool for budget reporting and evaluation would be able to prove its worth through its application in the government sectors for which it is designed. For, according to reports, at the moment, total liabilities with the 101 SoEs and autonomous bodies stand at over Tk.6.39 trillion with 26 per cent of the amount tied to subsidiary loan agreements. There is no question of keeping track of as well as correctly assessing this huge government liability with the help of the digital tool designed for the purpose. As expected, the next step of the government would be to take appropriate measures to rid the public exchequer of this enormous drain on the government exchequer.​

 

[Saif]

Further cut in export cash incentive before LDC graduation unlikely

Squeezing cash incentives anymore is unlikely before Bangladesh's graduation from the world poor-country club as the government prioritises propping up trade and industry to navigate global trade uncertainties, officials say. To support trade against adverse affect of tariff wars and "hostile atti

thefinancialexpress.com.bd

RETHINK ON SQUEEZE IN TRADE-INDUSTRY PROMOTING PERKS
Further cut in export cash incentive before LDC graduation unlikely
Global trade dilemmas, tariff wars, neighbours' hostility induce govt stance

SYFUL ISLAM and JASIM UDDIN
Published :
Aug 09, 2025 00:28
Updated :
Aug 09, 2025 01:11

Squeezing cash incentives anymore is unlikely before Bangladesh's graduation from the world poor-country club as the government prioritises propping up trade and industry to navigate global trade uncertainties, officials say.

To support trade against adverse affect of tariff wars and "hostile attitude" of the neighbouring partners, they add, the current interim government for the first six months of the current fiscal year kept cash incentives same as the amount revised in January 2024.

Finance Secretary Dr Md Khairuzzaman Mozumder at a recent meeting said the government had taken steps to phase out cash incentives in four stages so that businesses do not have to bear the brunt at once when graduation is completed in November 2026.

However, he said, considering the current global trade uncertainties, the government is reviewing whether to defer the reduction in cash incentives until graduation from the least-developed countries (LDCs) group.

Rather, according to Mr Mozumder, the government is also exploring alternative production-linked incentives for promising sectors like agriculture, pharmaceuticals, leather, and jute and jute goods, in place of cash incentives.

Contacted over the rethink, a senior official who attended the meeting told the FE there was no possibility that the cash incentives would be lessened anymore before the county's status change onto a higher rung through graduation.

"We are about to graduate from the LDC group. But the present global scenario is not in favour of trade. So, the government is unlikely to lessen cash incentives only few months remaining in hand," he said.

After crossing the crossroads in November, the cash incentives will go automatically in line with the provision of the World Trade Organisation for developing countries, for which providing cash incentives or export subsidy is prohibited.

In January 2024 the government began restructuring export subsidies through lowering their rates. The rates of cash incentives following the trimming for 43 categories of products have gone down to stand between 1.0 per cent and 15 per cent.

In the second phase of lowering cash incentives the rate further went down to fall between minimum 0.3 per cent and maximum 10 per cent, over which the businesses reacted sharply, and demanded retention of the rates as before January 2024.

President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Mahmud Hasan Khan on June 25 met finance secretary Mr Mozumder and urged him to reinstate full cash incentives to help the sector remain competitive amid growing uncertainty.

Talking to the Financial Express on Friday, Mr Khan welcomed the government move not to lessen cash incentives anymore in view of the industry's condition and the global economic situation.

"We urge the government to reinstate the special incentive at 1.0 per cent for apparel industry which earlier was reduced to 0.5 per cent and now stands at 0.3 per cent," he said.

Abdullah Hil Nakib, Deputy Managing Director, Team Group, says the government should focus on facilitating exporters, including those in the apparel sector, instead of reducing cash incentives, as Bangladeshi exporters lag far behind competing industries in other countries in terms of supports.

"The government can, at this stage, prioritise reducing bank interest rates to encourage investment and create new employment opportunities," he told the FE.

He also calls for government-to-government agreements with certain countries to secure zero-tariff access for exports.

Nakib further urges the government to find ways of continuing incentives after the country's graduation from LDC status.​

 

[Saif]

Inflation comes back to bite

Just when it seemed the worst of the inflationary storm might be passing, official data confirm that price pressures are rising again. After three consecutive months of moderate decline aided by strong agricultural output, inflation in Bangladesh has reversed course. The Bangladesh Bureau of Statis

thefinancialexpress.com.bd

Inflation comes back to bite

FE
Published :
Aug 09, 2025 23:01
Updated :
Aug 09, 2025 23:01

Just when it seemed the worst of the inflationary storm might be passing, official data confirm that price pressures are rising again. After three consecutive months of moderate decline aided by strong agricultural output, inflation in Bangladesh has reversed course. The Bangladesh Bureau of Statistics reports that the point-to-point inflation rate in July increased to 8.55 per cent, slightly higher than June's 8.48 per cent. This renewed increase is occurring despite the continuation of a contractionary monetary policy aimed at curbing inflation. In an economy where a large informal sector limits the reach of formal policy tools, the impact of such monetary measures may fall short and the recent uptick in inflation is a telling sign of that limitation. The government had set a target of bringing average inflation down to 6.5 percent within this financial year, but with prices rebounding earlier than expected, meeting that goal now looks increasingly doubtful.

Particularly troubling is the rise in food inflation, which increased to 7.56 per cent in July from 7.39 per cent in June, putting added pressure on household budgets and kitchen markets across the country. Urban residents are struggling more than their rural counterparts, with overall inflation in cities reaching 8.95 per cent compared to 8.55 per cent rural areas. Non-food inflation remained also stubbornly high, standing at 9.55 percent in urban areas and slightly higher at 9.73 percent in rural regions. The previous three-month decline in inflation was largely attributed to abundant agricultural harvests. The fact that food prices are rising despite these harvests suggests that the issue lies more with supply distribution than with supply availability. The persistently high non-food inflation also points to the supply-side constraints and production inefficiencies as significant factors for the current situation.

For average Bangladeshis, particularly low-and-middle-income families, higher prices are bad news because they reduce real income and make people poorer. Although the Wage Rate Index (WRI) increased slightly to 8.19 per cent, wages still fail to keep pace with inflation. Without effective intervention, this trend could exacerbate inequality and fuel social discontent. Conventional inflation-control measures like tightening money supply and raising interest rates are proving less effective because when the root causes are supply-side barriers, monetary policy alone is insufficient. These barriers such as disruptions in food distribution, soaring import costs and market inefficiencies require broader interventions. The upcoming national elections present additional inflationary risks, as anticipated increases in campaign spending are likely to expand money supply, potentially pushing inflation even higher.

To rein in inflation, the government must prioritise stabilising food prices given their outsized role in this crisis. This requires strengthening agricultural supply chains through targeted investments in storage facilities, transportation infrastructure and improved market linkages to ensure consistent flow of goods across regions. However, even when supplies are sufficient, market intermediaries can exploit consumers by charging excessive margins in the absence of proper oversight. This is why stricter enforcement against market manipulation and hoarding, along with digital price tracking, is crucial to curb unfair practices. There is also a pressing need for a strategic reserve system for essential imports such as food and fuel that can be used as buffer against sudden price shocks. The recent rise in inflation is a clear warning that complacency is not an option. Policymakers must respond with a clear and coordinated plan. Failure to do so will not only allow prices to rise further and undermine inflation control efforts, but also intensify economic hardship for millions.​

 

[Saif]

Revenue reform, tax digitisation, trade-clearance systems start paying

Three major steps on digitisation of the tax administration in last one year of the interim government has already started paying off through faster trade documentation and leak-plugged tax mobilisation, officials claim. The breakthroughs are taking place by way of restoring taxpayer confidence in

thefinancialexpress.com.bd

Revenue reform, tax digitisation, trade-clearance systems start paying

Doulot Akter Mala
Published :
Aug 09, 2025 23:49
Updated :
Aug 09, 2025 23:49

Three major steps on digitisation of the tax administration in last one year of the interim government has already started paying off through faster trade documentation and leak-plugged tax mobilisation, officials claim.

The breakthroughs are taking place by way of restoring taxpayer confidence in virtual operations instead of the loopholes-ridden manual processing moving from table to table in offices.

The digitising of revenue system has been minimizing the hassles in tax payment and expediting the release of goods from customs points.

The initiatives, if sustained, would plug the scope of underhand dealings between taxmen and taxpayers and cut time of cargo release at customs points.

The digitising includes mandatory online tax-return submission by individual taxpayers, suspending manual selection of taxpayers' files for audit, introducing mandatory receipt of import certificate, licences and permissions under Bangladesh Single Window (BSW) gateway.

Already, online tax-return submission marked nearly three times increase last year, ending June 30, 2025, as going online was mandatory for some professionals, NBR data showed.

From August 4, all individual taxpayers are required to submit tax returns online.

After the formal launch of the BSW, traders have received some 431,169 certificates, licences and permission from the online portal to get their products released from ports.

Suspension of manual selection of tax files for audit is another breakthrough as now only selection of tax files is conducted digitally. "Taxpayers have long faced harassment on audit-selection process as it was a tool of money making by some tax officials, staffers and tax practitioners," says many a sufferer.

The National Board of Revenue (NBR) data show 15,494 tax files have been selected for audit following the concept of "tax justice" where only 0.5 per cent of tax returns of each circle have been selected for audit. To improve the audit selection, Risk-based Audit Selection Criteria would be automated soon.

Time and cost of tax payment would gradually come down, encouraging tax payment if the move continued under the next political regime, set to come through the election the current interim government moves to hold next February.

However, officials at field offices felt the need of restoring confidence among the tax officials who are still panicked, shocked and quite in low morale over the government's punitive action against reform protesters.

An unrest in revenue administration sparked in May and June 2025 against an ordinance issued to bifurcate the NBR into revenue administration and implementation.

"Man behind the machine cannot be ignored as system has to be operated and implemented by the officials," says an expert in this field.

Though NBR's revenue mobiisation has marked one of the lowest growth, 2.56 per cent, excepting the year of Covid-19, in the last one decade, both taxmen and businesses believe the situation would improve significantly in the current financial year if the interim government can bring back working spirit of the taxmen.

"The year 2024 cannot be compared to other normal financial years as it has gone through several challenges with its last quarter hit directly in the tax collection," says former chief economist at the World Bank Bangladesh office Dr Zahid Hussain.

"There is no alternative to raising the tax to-GDP-ratio but reform in tax department has not marked any significant progress yet," he told The Financial Express.

On digitisation, he said the efforts had not shown any result earlier as the government made partial digitisation where taxpayers have to visit tax offices at some stage of the process of tax payment and return submission.

The BSRM Group of Companies Chairman and Chief Executive Officer, Alihussain Akberali, feels the process of online tax return should be upgraded as it takes quite a long time to fill out the forms with required inputs.

"Income-tax-return system of Singapore could be an example of digitisation where access of all records of an assessee, including bank-account information, property, CDBL, is available for the taxmen. A software should be there to verify what each assessee has furnished in the tax files and highlight gross anomalies, if any, for their investigation," he told the FE.

Talking to the FE on Saturday, NBR chairman Abdur Rahman Khan said the digitisation would pay off gradually as the NBR is now working to ensure integration and interoperability.

On allegations of partial automation, the NBR chief said,"The government's other departments would also require to digitise at the same pace so that taxmen can get all required information provided in the tax returns."

A bunch of further digitisation steps, including bonded-warehouse facility, and simplification of tax clearance for foreign nationals are underway to ease tax payment and compliance process, he informed.​

 

[Saif]

Structural ills, slow investment and inflation stymie economic recovery

Bangladesh's economy has avoided a catastrophic collapse over the past year following the interim government's decisive actions, but entrenched structural weaknesses, slow private investment, and persistent inflation impede long-term recovery. As economists, experts and a top politician made such

thefinancialexpress.com.bd

ECONOMY SAVED FROM COLLAPSE BUT CHALLENGES PERSIST: CPD MEET
Structural ills, slow investment and inflation stymie economic recovery

FE REPORT
Published :
Aug 11, 2025 01:08
Updated :
Aug 11, 2025 01:08

Bangladesh's economy has avoided a catastrophic collapse over the past year following the interim government's decisive actions, but entrenched structural weaknesses, slow private investment, and persistent inflation impede long-term recovery.

As economists, experts and a top politician made such observations at a high-profile policy dialogue Sunday in Dhaka, the central bank's governor listed improvements in some of the country's macroeconomic parameters and rolled out a slew of reforms coming in the banking sector for an overhaul.

The Centre for Policy Dialogue (CPD) organised the discussion, titled '365 Days of the Interim Government', at Lakeshore Hotel. Labour and Shipping Adviser Brig-General (retd) M Sakhawat Hossain attended the meet as chief guest, while CPD Distinguished Fellow Professor Mustafizur Rahman presided.

Bangladesh Bank Governor Dr Ahsan H Mansur painted a stark picture of the economy that the interim administration inherited. "The banking sector was right at the edge of the cliff when we took office," he said, adding that stabilising the macroeconomic condition and initiating financial-sector reforms became immediate priorities.

While acknowledging that "reforms can't be done in a year", Dr Mansur said progress had been made across multiple areas. The central bank quickly engaged with international financial institutions to preserve lines of credit, pledging to meet all foreign-payment obligations.

"Our situation didn't turn like Sri Lanka or Pakistan's. Remittances and exports provided tremendous support in debt repayment," he told the cutting-edge stocktaking session.

The governor notes that since 14 August 2024, the central bank has not sold a single dollar from reserves -- instead, purchasing at Tk122 despite exchange-rate pressures.

Inflation has fallen below 10 per cent, with expectations that the rate could drop below 5.0 per cent in the future, and the balance of payments (BoP) has returned to surplus, he told the meet about improving macroeconomic parameters.

On the legal front involving banking and finance, Dr Mansur announced amendments to be made to the Bank Companies Act, Money Laundering Act, Deposit Insurance Act, and Money Loan Court Act. The Bangladesh Bank Order is also being updated to strengthen autonomy and accountability.

The central bank is preparing to amend the Bangladesh Bank Resolution Ordinance allowing for acquisition of banks reeling from liquidity crises due to irregularities, with "no more leniency" for misconduct.

Other overhaul initiatives include forming three taskforces for (a) reform in the banking sector and central bank operations, and laundered money recovery (b) establishing a single body for "360-degree monitoring" of all banks (c) promoting QR code payments and credit-card usage (d) expanding nano-loans and student accounts (e) restructuring the revenue department (f) lowering smartphone prices to boost digital-banking coverage.

Reflecting on a turbulent year, Adviser M Sakhawat Hossain admitted the interim government was "bound to disappoint". Speaking as chief guest, he said: "We never said roses would bloom in every home."

Sakhawat, who has served in four ministries in a year under the post-uprising government, recalls the July Uprising as "unprecedented" -- a leaderless revolt where schoolchildren and youths died on the streets. In early August, as chaos gripped the country, he was handed the Home Ministry. "The police were demoralised and refused to work. I had to issue an ultimatum," he said, stressing that political interference must end for reforms to last.

Later, at the Labour Ministry, he faced the Beximco crisis, with 38,000 workers losing jobs. "I could do little, only form a committee," he admitted.

On banking scandals, he revealed one firm took Tk 480 billion from 16 banks and 7 financial institutions, with Tk 240 billion from Janata Bank alone -- without collateral.

"Maybe, we've failed in many areas, but not everywhere," he concludes. "We can leave a framework. Whether it's implemented -- that, I cannot guarantee."

CPD's traffic-light scorecard on government performances gives mixed readings. Presenting CPD's independent review of the government's first year, Executive Director Dr Fahmida Khatun said a "major economic disaster" was averted, with foreign-exchange reserves stabilised, remittances and exports increasing, and the trade balance improving.

However, she warns that these gains did not translate into qualitative improvements in ordinary people's lives. "Inflation may have eased, but many persistent challenges remain."

She highlights low revenue collection, weak institutional capacity, and constrained private-credit flow as serious problems.

The CPD's traffic-light scorecard has assessed 38 economic and social indicators. Nine were rated "green" (positive progress), 18 "yellow" (warning signs), and 11 "red" (areas of grave concern). While inflation control entered the green zone, health, education, revenue mobilisation, and governance were marked red.

Dr Khatun points out that health and education suffer from chronic underinvestment, poor infrastructure, staffing shortages, and rural-urban disparities, warning that "without decisive reform, the next generation will bear the cost".

She also flagged the fragility of the banking sector, citing rising non-performing loans (NPLs) and political influence. While the dissolution and reconstitution of 14 bank boards, adoption of international loan- classification standards, and creation of Tk230 billion in special credit lines were positive, the true scale of bad loans remains unclear.

The think-tank welcomes SME lending requirements, the youth fund, and enhanced migrant-worker financing but deplores a lack of progress in export diversification, post-LDC-graduation tariff reforms, labour-policy updates, and energy security.

It notes that while arrears to Adani have been cleared and capacity payments abolished, uninterrupted and affordable power supply remains a challenge.

Distinguished Fellow of the CDP Professor Mustafizur Rahman said macroeconomic stability had been largely restored from a situation of high inflation, rising unemployment, currency devaluation, declining remittances, and low investment a year ago. However, he strikes a note of caution: "The major test will be to translate this stability into investment and job creation."

He notes that some government targets have been met, others fallen short, and several initiatives were only beginning. "The future political government will have to carry these forward."

Standing Committee member of BNP Amir Khosru Mahmud Chowdhury told the review meet that sustainable reform requires changing the country's political culture. "We must move away from confrontational politics. Democracy means tolerance and respect for others' views."

He praised the National Consensus Commission initiative and calls for deregulation, greater private- sector involvement in economic management, and reduced direct contact between service providers and recipients to curb corruption.

He described Bangladesh's low ranking in foreign direct investment as a barrier to growth, urging a shift toward economic democratisation and faster restoration of democratic governance.

Dr M Tamim, Vice-chancellor of Independent University Bangladesh (IUB), Mahmud Hasan Khan (Babu), President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Syed Sultan Uddin Ahmed, Chair, Labour Reform Commission, Mohammed Nurul Amin, Chairman, Global Islami Bank PLC, and Showkat Aziz Russell, President, Bangladesh Textile Mills Association (BTMA), among others, spoke at the event.

 

[Saif]

Reforms to secure economic future

SINCE independence in 1971, Bangladesh has gone through several political transitions, many of which involved interim or caretaker governments. During these times, significant institutional reforms have often been introduced that tend to last beyond their immediate terms. The current government...

www.newagebd.net

Reforms to secure economic future
Raihan Riaz 10 August, 2025, 00:00

SINCE independence in 1971, Bangladesh has gone through several political transitions, many of which involved interim or caretaker governments. During these times, significant institutional reforms have often been introduced that tend to last beyond their immediate terms. The current government, now responsible for leading the country through a critical period, has a unique chance to implement foundational reforms that could transform Bangladesh’s economic and governance systems.

Bangladesh has made significant progress by reducing poverty, expanding education and becoming a manufacturing powerhouse. However, recent shocks such as the Covid outbreak, the war in Ukraine and domestic financial mismanagement have exposed serious vulnerabilities in the economy. Growth has slowed sharply, with revised data showing the economy having under-performed previous estimates. Capital flight, currency depreciation and depleted foreign exchange reserves have strained macroeconomic fundamentals. Inflation, meanwhile, remains persistently high, hitting lower- and middle-income households the hardest.

To its credit, the Bangladesh Bank has taken early steps to stabilise the economy. The steps include implementing a crawling peg exchange rate, tightening monetary policy, aligning banking regulations with international standards, launching an asset quality review and appointing independent boards in troubled banks. The reforms demonstrate intent, but they are only the beginning. For Bangladesh to emerge strong, the country must address core issue of its current crisis: governance.

A governance crisis, more than any external shock, has undermined institutions and diminished public trust. The government has pledged transparency and extensive public consultation and this promise must now translate into concrete action. The core of the governance reform agenda includes three key areas: public finance, the banking system and digital infrastructure.

Tackling public finance

EVERY year, Bangladesh loses about 7 per cent of its gross domestic product, about Tk 3.5 lakh crore, to tax exemption. While targeted tax incentives can help to achieve development goals, many exemptions are given arbitrarily, without proper process or transparency. As a result, the country has one of the highest tax exemption rates in the world, weakening public trust and government revenue.

One important reform is to transfer tax policy authority from the National Board of Revenue. In almost all democratic countries, tax decisions are a legislative task rather than an administrative one. This change would improve accountability in fiscal policy and ensure that exemptions are debated, justified and accessible for public scrutiny.

Equally important is separating tax policy from tax administration. This would clarify the mandate and reduce conflicts of interest within the revenue board. Reform is also urgently needed in the governance of public procurement. Disclosing beneficiaries and ownership of public contracts would help to prevent patronage and waste. Furthermore, operational independence for the Office of the Comptroller and Auditor General would enhance budget oversight.

In the area of social spending, Bangladesh is making progress by developing a unified, dynamic social registry. This will improve how social assistance is targeted, ensuring that support reaches the most vulnerable and is not diverted through political or bureaucratic interference.

Fixing financial system

ONE clear example of governance failure is in the banking industry. Years of lax regulation and political interference have allowed well-connected groups to secure large loans, many of which remain unpaid. This has led to a buildup of non-performing loans that now threatens the stability of the entire financial system.

To address this, the Bangladesh Bank needs to establish a robust bank resolution framework. This will enable the central bank to step in when banks fail, enforce capital adequacy rules and safeguard depositors. Regulatory authorities should also require banks to reveal the ultimate ownership of shareholders and borrowers, along with any links between them. Such transparency is vital for managing systemic risks and preventing insider lending practices.

Encouragingly, Bangladesh is now working with international partners to recover assets illegally transferred abroad. If the efforts continue, they could help to rebuild trust in the banking system. A transparent and well-regulated financial sector would also attract vital investments, reduce credit risk and increase private sector lending, especially to small and medium enterprises, which are essential for job creation.

Harnessing digital dividend

THE third frontier of governance reform lies in the digital realm. Bangladesh, home to one of the world’s largest populations of digital gig workers, is uniquely positioned to lead among developing countries in digital transformation. However, technology alone is not enough. For digital systems to be effective, they must be supported by strong governance, legal protections and user trust.

Reforms are already in progress to enhance the quality and independence of the statistical system, a vital step to ensure that policy decisions rely on accurate and timely data. This should be paired with the development of a digital public infrastructure: an interoperable system that integrates digital identity, mobile payment, data protection and consent-based data sharing. Such a framework would cut down on inefficiencies, prevent fraud in social programmes and make government services more user-friendly. Countries from Estonia to India have demonstrated that transparent digital systems can significantly improve service delivery and empower citizens. Bangladesh must keep pace.

Institutional integrity

BEYOND specific reforms, the success of this agenda relies on the credibility of institutions. Regulatory agencies such as the Anti-Corruption Commission and the judiciary must be empowered to function independently. Rules should apply equally to everyone, regardless of political or economic influence. Public consultation should go beyond rhetoric to become genuine, with meaningful channels for citizens to participate in shaping policies that impact their lives.

At the same time, whistleblowers, journalists and civil society actors must be protected. They are essential for holding institutions accountable and promoting transparency in the public sphere. The rule of law, impartial enforcement and institutional autonomy are not luxuries. They are the foundation of a just society.

A legacy moment

THE interim government is operating within a limited time frame, but within that constraint, there is an opportunity to initiate governance reform that elected governments can build on. Stabilising the economy is urgent. However, restoring trust in institutions is even more critical for long-term resilience. If Bangladesh can strengthen public financial management, reform its banking sector and develop a digital government rooted in trust and transparency, it will not only recover but also lead.

In this rare moment, reform is necessary. The choices made today will shape the future.

Raihan Riaz is a senior research associate (climate change and disaster risk reduction) at Network for Information, Response and Preparedness Activities on Disaster.​

 

[Saif]

Bangladesh sets $63.5b export target for FY26

The government has set a new export target of $63.5 billion for the current financial year (FY26), aiming for 16.5 per cent growth over the income achieved in the previous fiscal year (FY25). Commerce Adviser Sk Bashir Uddin made the announcement at a press conference at his secretariat office on

thefinancialexpress.com.bd

Bangladesh sets $63.5b export target for FY26

FE ONLINE REPORT
Published :
Aug 12, 2025 13:23
Updated :
Aug 12, 2025 13:23

The government has set a new export target of $63.5 billion for the current financial year (FY26), aiming for 16.5 per cent growth over the income achieved in the previous fiscal year (FY25).

Commerce Adviser Sk Bashir Uddin made the announcement at a press conference at his secretariat office on Tuesday, expressing optimism that the target can be achieved by the end of the fiscal year.

Bashir said all existing factors had been taken into account in setting the new export target while unveiling the external trade plan, which has drawn mixed reactions from economists.

The export target for the 2024-25 fiscal year was $57.5 billion, while actual earnings stood at $55 billion.

The commerce adviser reiterated his belief that the new target is attainable.

Commerce Secretary, senior officials, and representatives from trade bodies were also present at the press conference.​

 

[Saif]

Remittance: What has sparked off this sudden surge?

At a juncture when the country is sunk in a multi-dimensional crisis, a ray of hope suddenly has pierced through the dark clouds of the economy. The flow of remittances sent home by expatriates has taken on an unexpectedly encouraging trend. In June 2025 alone, expatriates sent a record 2.21...

en.prothomalo.com

Remittance: What has sparked off this sudden surge?

Shoaib Sammo Siddique
Published: 12 Aug 2025, 17: 02

At a juncture when the country is sunk in a multi-dimensional crisis, a ray of hope suddenly has pierced through the dark clouds of the economy. The flow of remittances sent home by expatriates has taken on an unexpectedly encouraging trend. In June 2025 alone, expatriates sent a record 2.21 billion US dollars to the country. This is not just a number, but a rekindling of hope in an economy weighed down by crisis.

At the same time, foreign currency reserves have risen to 31.72 billion dollars (although, according to the IMF’s BPM6 calculation method, the figure is 24.99 billion). Over the past 11 months, reserves have increased by more than 11 billion dollars. This flow quietly signals that the wheels of the economy are beginning to turn again.

A troubled economic backdrop

Just a year ago, the situation was entirely different. Reserves had fallen below 20 billion dollars. Severe uncertainty had gripped the market. A dollar shortage, import bottlenecks, weaknesses in the banking sector, and a lack of investor confidence had shaken the very foundations of the economy. Inflation was hovering in double digits. Faced with an import shutdown, many industrial enterprises had suspended production. The government had struggled even to repay foreign loans and import food grains.

Against this backdrop, now that reserves are growing and remittances are setting records, the question arises: is this truly the beginning of a turnaround, or merely a temporary spell of relief?

Remittance surge

An analysis of explanations offered by economists reveals several factors behind the rise:

First, the exchange rate of the dollar has been kept stable for a prolonged period, holding between Tk 112 and Tk 113 in the market. With incentives added to legal channel transfers at rates competitive with hundi (informal remittance channels), expatriates now see the banking system as more profitable.

Second, the government’s anti-hundi operations, the law enforcement agencies’ vigilance against money laundering, and the central bank’s strict monitoring have narrowed the scope of illegal channels. As a result, migrant workers have become more inclined to send money through legal means.

Third, global employment opportunities have increased. Bangladeshi workers are being sent to new destinations such as the Middle East, Malaysia, South Korea, and Romania. With the government ensuring skilled worker training, language education, and contract-based deployment, both the quantity and quality of remittances have improved.

Fourth, certain reforms in the domestic banking system — such as improving transaction facilities in expatriate accounts and introducing remittance-based savings schemes — have encouraged people to use legal channels.

How this achievement spreads

Remittance plays a vital role in the country’s economy. When overseas workers send money to their families, this increases the country’s foreign currency reserves. This helps the government in various ways, such as, covering import costs, repaying loans, importing food and fuel, and ensuring dollar availability in the market.

As a result, banks can open more letters of credit (LCs), especially in the industrial and pharmaceutical sectors, which in turn boosts domestic production and services.

A renewed sense of confidence is growing among businesses because the supply of foreign currency has stabilised due to remittances. With the exchange rate holding steady, the prices of imported goods have come under control. Falling food prices are bringing relief to ordinary people’s daily lives. Reduced inflationary pressure is positively affecting economic stability and growth. Thus, remittances are not just about sending money; they are a major driver of the nation’s economic prosperity.

This new flow of remittances has brought relief and hope to the country’s economy. It must be ensured that this is not a short-lived phenomenon but becomes permanent
What the statistics say
Fiscal Year Total Remittance (Billion USD) June Income (Billion USD) Reserves at end of July (Billion USD)
2021–22 21.03 1.86 39.78
2022–23 21.61 1.97 23.53
2023–24 30.33 2.21 31.72

These figures show an annual growth of about USD 8.7 billion — the highest in the past decade.

Have we overcome the crisis?

Amid so much good news, one question keeps surfacing: Have we truly emerged from the crisis?

The answer is no. This brings us to the most crucial point that despite the rise in remittances, the major obstacles in the banking sector continue to be non-performing loans, defaulted debt and weak governance. Investor confidence has not returned, no new industries are emerging, and private sector growth is stagnant.

By the end of June, non-performing loans had risen to Tk 5,30,428 crore, that is 27.09% of total loans disbursed. In other words, more than a quarter of all loans in the banking sector are already in default.

Experts say the government now needs long-term structural reforms. Without making the banking sector accountable, freeing it from political interference, and ensuring transparency in the tax system, these gains will not be sustainable.

Another major concern is over-dependence on overseas income. If worker deployment slows down or the labour markets in migrant-hosting countries change, remittance flows could drop sharply, potentially triggering a renewed crisis.

Key ways to increase remittances

1. Improving facilities and services for migrant workers

Ensure round-the clock accessible services for expatriates, simplify banking and remittance procedures at any time, and confirm beneficiaries’ bank accounts to guarantee safe delivery of funds. Regulate recruiting agents to cut excessive costs. Introduce a ‘Remittance Card’ with point systems and pension benefits to encourage the use of legal channels.

2. Strengthening banking and mobile financial service (MFS) channels

Expand bank branches and remittance offices to remote areas. Enhance mobile financial services to enable fast and easy digital transfers. Introduce ‘Wage Earners MFS Accounts’ to strengthen oversight and ensure secure transactions for expatriates.

3. Strict law enforcement and awareness to curb hundi

Enforce tough laws and penalties against money laundering and illegal hundi networks. Identify and punish key hundi operators. Revoke licenses and seize funds where necessary. Provide alternative incentives to encourage expatriates to avoid hundi.

4. Country-specific solutions and stronger embassies

Adopt effective solutions tailored to each country’s specific context, as seen in Saudi Arabia and Italy. Increase embassy efficiency and staffing to deliver faster, smoother services. Reduce the difficulties faced by expatriates and expand consular assistance.

5. Adopting an effective incentive policy and boosting motivation

The current incentive rate is 2.5per cent down from 5 per cent previously. If it had been kept at least at 5 per cent, expatriates would have been even more encouraged to send remittances.

6. Ensuring worker safety and welfare

Guarantee the safety and protection of expatriate workers abroad. Strictly monitor the timely payment of wages. Strengthen safety and security measures for female workers in particular.

7. Simplifying and speeding up the remittance process

Make remittance transfers easier through the expansion of “open banking” and internet banking services. Provide transaction facilities in line with workers’ work schedules. Ensure that workers in remote areas have the opportunity to send remittances quickly via mobile or online channels.

8. Economic and political coordination and goodwill

Take firm steps to increase remittance flows through the sincerity of political leadership and coordinated efforts. Strengthen coordination with banks and financial institutions. Implement the government’s long-term structural reforms.

The current interim government’s strong monitoring of various remittance-related issues has brought positive changes to remittance flows. This improved, targeted management has brought a breeze of calm to the national economy, something we must all acknowledge.

This new flow of remittances has brought relief and hope to the country’s economy. It must be ensured that this is not a short-lived phenomenon but becomes permanent. For that, well-thought-out, sustainable, and realistic economic policies and reforms are essential.

If the government builds on this success with structural changes, maintains transparent governance, and prioritizes production-oriented investment, the dream of a new Bangladesh will be achievable. The hard-earned money of expatriates should not merely be savings, it should be a driving force for the economy. Now is the time to move beyond old mistrust and doubt. Through collective effort, we must build a Bangladesh filled with prosperity and confidence.

* Shoaib Sammo Siddique is a banker and economic analyst​

 

[Saif]

Bangladesh rake in over $1bn in remittances in first 12 days of August

Expatriates have sent in more than $1 billion in remittances in the first 12 days of August, marking a 46.20 percent increase compared with the same period last year. Bangladesh Bank spokesperson Arief Hossain Khan shared the development on Wednesday. In August, remittances totalled $1.05 billion

thefinancialexpress.com.bd

Bangladesh rake in over $1bn in remittances in first 12 days of August

bdnews24.com
Published :
Aug 14, 2025 00:14
Updated :
Aug 14, 2025 00:14

Expatriates have sent in more than $1 billion in remittances in the first 12 days of August, marking a 46.20 percent increase compared with the same period last year.

Bangladesh Bank spokesperson Arief Hossain Khan shared the development on Wednesday.

In August, remittances totalled $1.05 billion until now, compared to $721 million during the same period last year.

In July this year, expatriates sent $2.47 billion through banking channels.

According to the central bank, remittances totalled $3.53 billion from Jul-Aug 12 of the current fiscal year, compared to $2.63 billion during the same duration last year, indicating a 34 percent increase.

Due to the rise in remittances, the dollar supply has increased in banks, and demand is also low due to the lack of pressure to pay for imports and outstanding bills.

In July this year, the dollar rate fell sharply due to reduced demand. In order to stabilise the rate, Bangladesh Bank purchased dollars from commercial banks in five auction rounds.

The governor, however, said the market will also be stabilised by buying dollars through auctions.
​

 

[Saif]

BoP reverses into $3.4 billion surplus

Bangladesh sees its deficit balance of payments (BoP) reverse into around $3.4-billion surplus in fiscal year 3025 after three financial years, in early signs of much-needed economic rebound. Officials and economists hail record remittance and steady growth in export receipts against import contra

thefinancialexpress.com.bd

EXTERNAL SECTOR REBOUND SHOWS SIGNS OF ECONOMIC PICKUP
BoP reverses into $3.4 billion surplus

JUBAIR HASAN
Published :
Aug 14, 2025 00:34
Updated :
Aug 14, 2025 00:34

Bangladesh sees its deficit balance of payments (BoP) reverse into around $3.4-billion surplus in fiscal year 3025 after three financial years, in early signs of much-needed economic rebound.

Officials and economists hail record remittance and steady growth in export receipts against import contraction for the turnaround in the BoP situation.

After the end of the last financial year (FY'25), the country's BoP registered a surplus of around $3.40 billion in an upswing from $4.30-billion deficit a year ago, according to July-June FY'25 balance sheet on payments released Wednesday by Bangladesh Bank (BB).

Last time the economy of $460 billion saw surplus in overall balance of $9.27 billion was during the covid-19 pandemic time in FY'21. Afterwards, the country's overall balance swerved into a negative territory covering the subsequent three consecutive years - ($6.65billion in FY'22, $8.22billion in FY'23 and $4.30billion in FY'24).

The major driving force significantly improving the BoP in FY'25 was remittance that grew around 27 per cent to $30.33 billion from previous year's count of $23.91 billion.

On the other hand, a steady growth in exports was also observed in the just-past fiscal year with the nation of over 170 billion population having bagged export receipts amounting to $43.96 billion in a year-on-year growth of 7.70 per cent from $40.81 billion.

In terms of import, according to the official data, the country bought in goods worth $64.35 billion in FY'25, which was 1.80-percent higher over previous fiscal's import figure of $63.24 billion.

However, the surplus in financial account got reduced slightly to $3.98 billion from $4.49 billion recorded in FY'24.

Contacted for his view of the macroeconomic upgrade, BB executive director (Grade-1) Dr Md. Ezazul Islam said with the surplus in overall balance, all three accounts - current account, financial account and overall balance-got into a positive territory after three years, which is a "good sign for the economy".

In fact, the central banker said, the overall balance of payments was a concerning part in recent years but it turned positive of $3.39 billion in FY'25.

"So, it's a gain of over $7.0 billion in just a year. The record inflow of remittance, steady growth in export earnings and assistance from multinational donor agencies like the IMF help achieve the turnaround in BoP," he told The Financial Express.

Dr Islam, who leads monetary policy department of the central bank, mentions that the regulator tightened the monetary-policy stance in recent months, which supports stability on the foreign-exchange market and stops forex bleeding from the reserves.

Talking to the FE, Director-General of Bangladesh Institute of Development Studies (BIDS) Prof A.K. Enamul Haque said the significant improvement in BoP is a sign that the interim government has been able to stop money laundering from the economy.

"It also gives a sign of economic rebound, especially on the external fronts, and I do firmly believe investors will feel encouraged to invest here seeing the improvement," the noted economist said.

Former lead economist in World Bank's Dhaka office Dr Zahid Hussain says this is good news that the BoP turns positive after three years. Apart from robust remittance and steady export growth, the decrease in undocumented outflows in errors and omissions (from $2.85 billion in FY'24 to $1.11 billion in FY'25) plays a significant role in the improvement in the BoP.

"But the concerning part is the investment-driven import is still weak. Whenever it picks up, the surplus will be under pressure," he notes.

The eminent economist opines that the interim government has done a lot better in stabilising the macroeconomic condition but the stagnancy still remains in expansion of the economy, which needs to be taken care of.

After the changeover in state power, he also says, the unofficial channel of remittance is stopped and the country starts enjoying a boom in remittance inflow. But the question arises what will happen once the political government takes charge of the economy.

"So, the central bank is required to intensify its surveillance on illegal hundi operations and possible moves of money laundering by any quarter in the future," the economist suggests.​

 

[Saif]

Remittance inflow rises by 28.6pc in first 13 days of August

Inflow of remittances witnessed a remarkable year-on-year growth of 28.6 per cent, reaching US$1,144 million in the first 13 days of August, according to the latest data of Bangladesh Bank (BB) issued today (Thursday). Last year, in the same period, the country's remittance inflow was $889 mil

thefinancialexpress.com.bd

Remittance inflow rises by 28.6pc in first 13 days of August

Published :
Aug 14, 2025 19:34
Updated :
Aug 14, 2025 19:34

Inflow of remittances witnessed a remarkable year-on-year growth of 28.6 per cent, reaching US$1,144 million in the first 13 days of August, according to the latest data of Bangladesh Bank (BB) issued today (Thursday).

Last year, in the same period, the country's remittance inflow was $889 million, BSS reports.

During the July 2025-August 13, 2025, of the current fiscal year, expatriates sent remittances of $3,622 million, which was only $2,803 million during the same period of the previous fiscal year.​

 

[Saif]

Securing Bangladesh's economic future

Over the years of teaching in Bangladeshi universities, one alarming pattern kept repeating. A significant number of students pursuing their bachelor's degree or who are just weeks away from graduating do not have the basic skills required for the corporate world, namely, preparing a budget or unde

thefinancialexpress.com.bd

Securing Bangladesh's economic future

Sayeed Ibrahim Ahmed
Published :
Aug 18, 2025 01:01
Updated :
Aug 18, 2025 01:01

Over the years of teaching in Bangladeshi universities, one alarming pattern kept repeating. A significant number of students pursuing their bachelor's degree or who are just weeks away from graduating do not have the basic skills required for the corporate world, namely, preparing a budget or understanding what an income statement is.

This wasn't just a classroom observation. Industry professionals echoed the same concern that fresh graduates lacked practical knowledge, fundamental skills, and workplace readiness.

Such complaints from the professionals reflect systemic challenges that threaten our competitive future. If we are to achieve sustainable growth over the next decade, diversify our economy, and uplift living standards, we must pivot strategically.

As we are going to celebrate the first anniversary of the youth-led July revolution, which sowed the seeds of reformations, it's time we addressed three critical areas: breaking free from export over-dependence, investing seriously in human capital, and maintaining the policy stability that economic transformation demands.

It would not be overstating things to say that Bangladesh's economy has ridden on the wave of prosperity of ready-made garments (RMG) for years, with the sector accounting for 82-85 per cent of our total exports.

Although this concentration made us fortunate, it created dangerous vulnerability as well. The recent reciprocal tariffs imposed by the US only further validate the fact that excessive dependence on this particular sector has put us in a difficult position, with a looming dent in the country's overall economy.

Although the United States has slashed its tariff rate to 20 per cent, a significant reduction from the previous 35 per cent, risks persist for exporters. This tariff level remains substantially higher than rates enjoyed by competitors with preferential trade agreements. Without diversifying export markets and improving competitiveness, growth in Bangladesh's exports might still face hurdles.

Taking all these factors into consideration, diversifying our export basket and taking effective measures accordingly is an urgent priority and probably the most feasible option.

Despite having huge export prospects, several sectors are largely untapped or unexplored. Our leathers, which currently have less than 0.5 per cent global market penetration, have undiscovered potential as Bangladesh is one of the major markets in South Asia when it comes to sourcing raw leather. The pharma industry, which has witnessed 4 per cent YoY export growth in FY 2024-25, promises to grow as regional demand rises and our manufacturing maturity.

Most promising is the Information and Technology (IT) sector. The global semiconductor market alone presents us with a trillion-dollar opportunity. Even capturing 2-5 per cent of this market would revolutionise our export earnings and technological status. Software programming, artificial intelligence, and digital services provide pathways to high-value exports that rely on brainpower, not just manufacturing capacity.

Our conventional industries must not be overlooked either. Our fisheries and agro-processing sector can be developed and upgraded with proper investment and strategic priority. The idea is to diversify our economic risk across different sectors so that the ups and downs of the global market of any one industry cannot bring our economy to its knees.

Shaping human capital

Bangladesh appears to have turned a blind eye to the demographic dividend it currently holds. Despite having a large youth population, a significant portion of our workforce remains unskilled or under-skilled. This missed opportunity not only limits individual potential but also restricts national growth prospects.

To change the scenario, we should prepare our youth to compete and contribute to the global workforce, considering the limited opportunities here and the growing needs for a skilled workforce globally, instead of focusing solely on the domestic job market.

Our neighbouring nations, namely Pakistan, India, and Sri Lanka, have successfully enabled millions of their citizens to establish careers in Western countries, particularly the United States and the United Kingdom, by equipping them with technological skills. Bangladesh must follow this trend through systematic skill development programs.

To achieve this, government subsidies for vocational education and technical training are essential. The emphasis should be on a modernised education system that aligns with market needs and strategic policymaker support. Countries like South Korea and Taiwan succeeded by coordinating education, targeted policies, and industry development. Bangladesh has similar opportunities in textiles technology, pharmaceuticals, and IT services, but requires an integrated approach where education, policy, and industry work hand-in-hand to create a competitive advantage.

This shift in focus must also be reflected in our migration strategy. At present, we are too reliant on unskilled labour migration to the Middle East and Southeast Asia. This path often compels families to exhaust their life savings for a limited economic return. In contrast, skilled workers earn significantly more, have higher savings rates, and remit substantially larger amounts of foreign exchange. By prioritising the export of skilled professionals, Bangladesh could add a substantial amount to its annual remittance earnings.

Whereas economic development is crucial, political stability forms the foundation for sustained growth. Policy stability attracts both foreign and domestic investment. The experience of the mobile manufacturing industry is very telling in this context. Tax concessions in the initial phases and the facilities of Export Processing Zones attracted investments, but subsequent policy flip-flops generated uncertainty, which was not in tune with long-term thinking.

Exchange rate volatility in the recent past is the cost of political unrest. Devaluation of the taka from 85-90 to over 135 per US dollar, then stabilising around 120, is a consequence of investor panic and capital flight. Foreign investors require stable frameworks for their long-term funds.

Stable government ensures policy stability, particularly in exchange rate management and monetary policy. To preserve the current regime of crawling pegs or to implement the system of freely floating rates, policy coherence strengthens investor confidence and allows long-term economic growth.

We are at a crossroads in 2025 from which the direction of sustainable growth can turn in either direction. The next decade can be the most decisive moment as it will determine whether we can just continue with a mono-export model or converge towards a resilient, multi-industry economy. The transformation entails collective pushes in education, industrialisation, skill development, and policy continuity.

As educators, we must shift the way we teach and what we teach students. As policymakers, the challenge is to remain consistent, open, and aligned with overall growth. And as our country, we must have faith in investing in human beings, and not just in buildings, because development begins there.

Let it be a decade of action, not just ambition.

Sayeed Ibrahim Ahmed is an experienced investment analyst, currently an Assistant Professor of Finance at American International University Bangladesh (AIUB).​