[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Target eight sectors to repair macroeconomic fault lines

The country’s largest employer, agriculture, is stuck at low value-addition, presenting a litmus test for the nation’s diversification push for future growth ahead of its graduation from the least developed country club next year.

www.thedailystar.net

Target eight sectors to repair macroeconomic fault lines

Economic review urges long-term institution-building, not short-term numbers

The country's largest employer, agriculture, is stuck at low value-addition, presenting a litmus test for the nation's diversification push for future growth ahead of its graduation from the least developed country club next year.

In number, the farming sector in Bangladesh employs 44 percent of the workforce, while 75 percent of the produce remains unprocessed, according to an economic review.

It says on top of farming, the government should focus on seven other sectors, such as readymade garment, automotive industry, electronics, light engineering, IT-based freelancing, semiconductor industry, and human capital.

The authorities should adopt an approach emphasising fixing long-standing macroeconomic wounds and laying the groundwork for the future, according to the review by UCB Asset Management released yesterday.

According to the report, ready-made garment is the backbone of Bangladesh's economy, but it must move into man-made fibres and higher-value segments.

Besides, the country risks being trapped in low-value labour unless it climbs the ladder to semiconductor and IT freelancing.

The asset manager argues that the way forward lies not in chasing headline numbers, but in rebuilding institutions, restoring confidence and strategically diversifying the productive base of the economy.

Opportunities in automobiles, electronics assembly and light engineering are highlighted as realistic next steps, building on existing capabilities and domestic demand.

These sectors, if supported by targeted incentives, quality certification systems and skills development, could integrate Bangladesh more deeply into regional and global supply chains, the report said.

In the automotive industry, the government can consider strengthening backward linkages and developing supply chains for electric vehicles by adopting supporting incentives.

In powering an electronics assembly boom, the country can take lessons from Vietnam's long-term and predictable tax policy in supporting industry, research and development, and human capital development.

There is immense potential in the light engineering sector, but it needs industry-focused vocational training and improved backward linkages.

Apart from these, the report described remittances as the "oxygen" of the economy for its contribution to external stability. Expanding skill-linked overseas employment and offering more attractive, transparent investment options for expatriates are seen as ways to sustain and deepen this vital flow while strengthening foreign exchange buffers.

Underlying all these sectoral strategies is what the report calls a virtuous institutional cycle: building people to build institutions. Investing in education, healthcare and skills is presented not just as a social priority, but as the foundation for stronger governance, higher productivity and inclusive growth.

"Fifty-four years of independence, the country has come a long way and yet the real question remains -- have we, as a nation, done justice to the immense potential this country had to offer?" said S M Rashedul Hasan, managing director and CEO of the asset management company.

"The answer is mostly 'No'," he added.

Only by empowering citizens to demand and uphold accountable institutions, the report says, can Bangladesh escape extractive systems and realise its full potential.​

 

[Saif]

https://thefinancialexpress.com.bd/economy/14pc-growth-of-remittance-inflow-till-dec-17

14pc growth of remittance inflow till Dec 17

BSS
Published :
Dec 18, 2025 21:39
Updated :
Dec 18, 2025 21:40

Inflow of remittances witnessed a year-on-year growth of 14 percent reaching US$2007 million in the seventh days of December, according to the latest data of Bangladesh Bank (BB) issued.

Last year, during the same period, the country’s remittance inflow was $1,760 million.

During the July to Dec 17, 2025 of the current fiscal year, expatriates sent remittances of $15,045 million, which was $12,898 million during the same period of the previous fiscal year.​

 

[Saif]

Bangladesh lags behind in GVC-related trade

Over the past thirty years, Global Value Chains (GVCs) have played a critical role in international trade and growth. Many countries have tried to increase their participation in GVCs to stay competitive in production and trade. As a result, GVC-related trade has become a key focus of trade policy.

thefinancialexpress.com.bd

Bangladesh lags behind in GVC-related trade

Asjadul Kibria
Published :
Dec 20, 2025 23:03
Updated :
Dec 20, 2025 23:46

Over the past thirty years, Global Value Chains (GVCs) have played a critical role in international trade and growth. Many countries have tried to increase their participation in GVCs to stay competitive in production and trade. As a result, GVC-related trade has become a key focus of trade policy. GVC-related trade measures the value of exports that cross multiple borders, whereas traditional trade measures exports between just two countries. In 2023, GVC-related trade fell by 5.35 per cent, while traditional trade rose by 0.18 per cent. In 2024, both grew, by 3.87 per cent and 4.6 per cent respectively. Still, the share of GVC-related trade in total trade dropped from a high of 48 per cent in 2022 to 46.3 per cent in 2024.

GVCs involve sharing production across countries, where different tasks and activities are done in different places. The United Nations Industrial Development Organization (UNIDO) explains that a global value chain covers all steps like design, production, marketing, distribution, and customer support, divided among many firms and workers in different countries. In the past, companies mostly made products in one country. Now, a finished product is often made and assembled in several countries, with each stage adding value (World Bank). This makes labels like 'Made in Bangladesh' or 'Made in Vietnam' less meaningful. For example, a T-shirt made in Bangladesh might use fabric from China, cotton from the United States (US), and buttons from India. Even though the T-shirt is shipped to the European Union (EU) as a finished product from Bangladesh, it includes value added in three other countries. This is an example of GVC trade.

However, Bangladesh still lags behind most countries in GVC-related trade, according to the Global Value Chain Development Report 2025. The report published last week jointly by the University of International Business and Economics, the Asian Development Bank (ADB), the Institute of Developing Economies-Japan External Trade Organization, the World Economic Forum (WEF), and the World Trade Organization (WTO). This fifth edition looks at how GVCs are changing due to new technology, the shift to greener practices, and changing global politics.

The report found that services now play a bigger role than goods in GVC participation. This shows that services, especially those delivered digitally like finance, telecommunications, and IT, have been more resilient after the pandemic. The shift highlights the growing importance of services in global trade and how they are less affected by physical supply chain problems.

The report lists 19 countries, including Bangladesh, as low-GVC traders. Other countries in this group are Bhutan, the Maldives, Nepal, Sri Lanka, Cyprus, Estonia, Latvia, Malta, Brunei Darussalam, Cambodia, and the Lao PDR. In 2010, these economies made up 0.69 per cent of global gross exports and 0.66 per cent of GVC-related exports. By 2024, these shares increased to 1.26 per cent and 1.24 per cent.

The report also showed that high- and upper-middle-income GVC traders mostly export value-added goods to other high-income GVC traders. In contrast, low GVC traders send their exports to a wider range of destinations, with their top ten markets spread across high, upper middle, and lower middle GVC traders.

A key finding is that while high-value chain trading economies still make up most of global GVC-related trade, their combined share fell from 76 per cent in 2010 to 63.6 per cent in 2024. This shows that more economies are gradually joining GVCs.

Between 1995 and 2022, as the report noted, production has become more focused in technologically advanced, regionally connected hubs. Many countries that joined GVCs later, including Bangladesh, remain on the edge of global production networks. During this time, Bangladesh's participation in both backward and forward GVCs grew by less than two per cent.

Two years ago, a joint report by the Asian Development Bank and the Islamic Development Bank Institute found that Bangladesh's GVC participation rates are lower than most other economies. From 2000 to 2021, Bangladesh's trade-based total GVC participation ranged from 22.6 per cent to 26.01 per cent, much lower than the world average of 40.6 per cent to 46.0 per cent. The report, titled Transforming Bangladesh's Participation in Trade and Global Value Chains, stated, "Bangladesh only fared better than Pakistan in trade-based total GVC participation rate and ranked last based on production-based GVC forward participation rate."

In Bangladesh, the textiles and clothing sector leads both export production and GVC participation, which limits export diversification. The sector also shows low levels of forward and backward linkages. This means the domestic economy captures little added value, and local sectors play a small role in supporting production. Such heavy focus on textiles brings risks to the economy.

The ADB-IsDBI report pointed out that moving out of Least Developed Country (LDC) status, higher wages, and changing global trends are key risks. The report added, "Thus, diversification into the other sectors to supplement RMG manufacturing will be important in the economy's thrust to promote export-led growth."

According to the WTO Global Value Chains Sectoral Profiles, the foreign value-added content in Bangladesh's textile and clothing sector stood at around 21 per cent on average in between 2017 and 2022. The 'value added' means the increase in value that is created at each stage of the production of a good or services. So, it is the difference between the cost of inputs (raw materials, labour) and the selling price of the product.

The net export earnings of the ready-made garments (RMG) also reflect the use of foreign content. Bangladesh Bank, in its latest Quarterly Review of RMG, showed that the import value of raw materials (raw cotton, synthetic/viscose fibre, synthetic/mixed yarn, cotton yarn & textile fabrics and accessories for garments) was US$ 3.83billion in July-September of FY26, accounting for 38.66 per cent of total RMG export earnings. So, net exports from the sector stood at US$ 6.09 billion in the period under review.

The ADB-IsDBI report suggested that Bangladesh could diversify its exports by joining more GVCs. This would let the country focus on specific tasks within value chains, without needing to invest heavily in building entire chains at home. With LDC graduation coming up in November, the country's post-graduation plans should take this advice seriously.​

 

[Saif]

Returns on Savings Certificates may be slightly reduced from 1 January

Interest rates on savings certificates are set to be reduced again. The Finance Division has prepared a proposal for new rates.

en.prothomalo.com

Returns on Savings Certificates may be slightly reduced from 1 January

Special Correspondent Dhaka
Published: 22 Dec 2025, 14: 58

After six months, the interest rates on the savings certificates, Sanchoy Patra, are set to be reduced once again. For the next six-month period starting 1 January, the Finance Division of the Ministry of Finance has prepared a proposal to fix new rates. The division recently submitted a summary of the proposal to Finance Advisor Salehuddin Ahmed’s office for approval.

Once the finance advisor gives his approval, the Finance Division will forward it to the Internal Resources Division (IRD) of the Ministry of Finance, which will then issue a circular. This was learned yesterday, Sunday, from Finance Division sources.

Finance Advisor Salehuddin Ahmed told Prothom Alo Sunday night, “The proposal has not yet reached me. However, from the bankers’ side there is a demand to slightly reduce the returns on savings certificates in the interest of private-sector credit growth. We will take a decision considering the overall interest.”

At present, the highest return on savings certificates is 11.98 per cent and the lowest is 9.72 per cent. Under the new proposal, these rates may be reduced by an average of 0.5 percentage points. However, for smaller investments the return rate will remain comparatively higher, similar to the current structure, while larger investments will earn lower returns. Investments of Tk 750,000 or less will receive higher returns, while investments above Tk 750,000 will receive lower returns.

On 30 June, the government decided to regularly fix the returns on savings certificates as part of its revenue and debt management strategy. At that time, after slightly reducing the average return rate, it was announced that the rates would be reviewed again after six months. That six-month period will be completed on 31 December.

IRD Secretary Md. Abdur Rahman Khan told Prothom Alo yesterday, “I cannot say whether the return rates will go up or down. The entire matter is now being handled by the Finance Division. Once we receive its recommendation, we will issue the circular.”

Among all types of savings certificates under the National Savings Directorate, the Family Savings Certificate is the most popular. For this certificate, the return rate upon maturity of the five-year term is 11.93 per cent for investments below Tk 750,000, and 11.80 per cent for investments above Tk 750,000. Before 1 July, these rates were above 12 per cent.

Currently, for the Pensioner Savings Certificate, the return rate upon maturity is 11.98 per cent for investments below Tk 750,000 and 11.80 per cent for investments above that amount. For the five-year Bangladesh Savings Certificate, the return rate upon maturity is 11.83 per cent for investments below Tk 750,000 and 11.80 per cent for investments above Tk 750,000. For the quarterly profit-based savings certificate, the return rate upon maturity is 11.82 per cent for investments below Tk 750,000 and 11.77 per cent for investments above that amount.

In addition, for time-deposit accounts at the Post Office Savings Bank, the return rate upon completion of a three-year term is 11.82 per cent for investments below Tk 750,000 and 11.77 per cent for investments above Tk 750,000. It has been learned that there will be no change in the return rates for Wage Earners Development Bonds, US Dollar Premium Bonds, US Dollar Investment Bonds, and Post Office Savings Bank general accounts.

Meanwhile, Abdul Hai Sarkar, chairman of the Bangladesh Association of Banks (BAB), the organisation of private bank sponsors, said that when returns on savings certificates are high, savings naturally flow into government funds. If the rates are reduced slightly, those funds will move to banks, which would help boost private-sector credit growth. However, given the country’s current overall situation, demand for loans is already low. Inability to lend to the private sector also becomes a kind of burden for the banking sector.

Sources at the National Savings Directorate said that in the first four months of the current 2025–26 fiscal year (July–October), the government took net borrowing of Tk 2,369 crore from savings certificate sales. In the 2024–25 fiscal year, net borrowing was negative by about Tk 6,000 crore. As of the end of last October, the government’s outstanding debt from savings certificates stood at Tk 341,000 crore.​

 

[Bilal9]

Most people in South Asia are also clueless about the fact that Debt-to-GDP ratio in Bangladesh is quite low (the lowest among the large three South Asian economies).

The debt-to-GDP ratio for Bangladesh is approximately 40.3% in Bangladesh and 80.4% in India, which has the highest in South Asia, their economy is leveraged to the hilt. These ratios indicate the proportion of a country's debt compared to its economic output, with higher percentages suggesting greater debt levels relative to the economy. The more your debt, the higher the expense to borrow money from overseas banks. This higher ratio in India also may raise concerns about fiscal sustainability and the ability to meet future debt obligations.

This indicates Bangladesh has far more room to borrow internationally (and grow its economy) - than countries like India, for whom borrowing can become rather expensive. Bangladesh situation typically will allow for greater fiscal flexibility and can enhance investor confidence. That is why I am confident that GDP growth in Bangladesh will lead South Asia once we are past the current instability period.

Debt to GDP Ratio by Country 2025

Comprehensive overview of debt to GDP ratio by country, offering insights into the financial health and economic stability of various nations by comparing the amount of debt they hold against the size of their economies.

worldpopulationreview.com

 

[Saif]

Bangladesh received $2.46 billion remittance in 22 days of December

The upward trend in remittances sent by Bangladesh expatriates has continued in December, with receiving over US $2.42 billion in 22 days of the month. Bangladesh received $15.46 billion inward remittance so far in the current fiscal year FY 2025-26. Blessings on the remittance, the gross forex r

thefinancialexpress.com.bd

Bangladesh received $2.46 billion remittance in 22 days of December

UNB
Published :
Dec 23, 2025 20:48
Updated :
Dec 23, 2025 20:48

The upward trend in remittances sent by Bangladesh expatriates has continued in December, with receiving over US $2.42 billion in 22 days of the month.

Bangladesh received $15.46 billion inward remittance so far in the current fiscal year FY 2025-26.

Blessings on the remittance, the gross forex reserves of Bangladesh increased to $32.72 billion on Monday (December 18). As per the IMF standard BPM6, the forex reserves stood $28.03 billion.

Bangladesh Bank Governor Dr. Ahsan H. Mansur in a discussion meeting recently said that the forex reserves may cross $35 billion by this month.

Arif Hossain Khan, Executive Director and spokesperson of Bangladesh Bank (BB) said the $2.42 billion remittance figure for December 1-22 is an increase by 11.6 percent compared to the same period last year. In December of the previous year (2024), the country received around $2.17 billion in 22 days.

The growth is attributed to several factors, including incentives offered for sending money through legal banking channels, increased encouragement for using the formal system, and the active role of exchange houses.

Remittance inflow has shown robust growth throughout the current fiscal year (FY 2025-26). From July 1 to December 22, 2025, the total remittance inflow reached $15.46billion. This represents an increase of $2.17 billion compared to the same period in the previous fiscal year (FY 2024-25), when the total stood at $13.31 billion. The year-on-year growth rate for the fiscal year to date is 16.2 percent.​

 

[Saif]

ADP implementation in a shambles

For years, poor implementation of Bangladesh's Annual Development Programme (ADP) has remained a recurring concern, despite ever-expanding budgets and ambitious targets. The Ministry of Planning has candidly acknowledged that flawed project design and absence of competent project directors lie at t

thefinancialexpress.com.bd

ADP implementation in a shambles

Wasi Ahmed
Published :
Dec 24, 2025 00:14
Updated :
Dec 24, 2025 00:14

For years, poor implementation of Bangladesh's Annual Development Programme (ADP) has remained a recurring concern, despite ever-expanding budgets and ambitious targets. The Ministry of Planning has candidly acknowledged that flawed project design and absence of competent project directors lie at the heart of the problem. The admission, made during an inter-ministerial meeting chaired by Planning Adviser Dr Wahiduddin Mahmud, highlights the institutional weaknesses that continue to undermine the country's development drive.

The Planning Ministry has identified several key obstacles to effective ADP execution. These include flawed project formulation, a shortage of skilled project directors, inadequate feasibility studies, and chronic delays in land acquisition. These issues have long been known, but their persistence underscores how deeply entrenched the systemic inefficiencies are. Among these, the scarcity of competent project directors (PDs) stands out as a critical barrier. Ministries such as Health and Education, which are vital for human capital development, have consistently underperformed-partly because capable officials are reluctant to take up PD roles. The position, which carries heavy administrative and financial responsibility, offers little in the way of incentives or professional recognition. As a result, it is often seen as burdensome rather than prestigious.

In response, the government plans to appoint PDs for large, foreign-funded projects on lien or deputation, with additional financial benefits. The Planning Commission has gone further, proposing structural reforms such as creating a dedicated PD pool, introducing certification programmes for project planning and financial management, instituting performance-based awards and establishing clear policies on PD appointments and transfers. If implemented, these measures could help professionalise the role and inject the much-needed accountability into project management.

Another chronic weakness lies in the poor quality of feasibility studies -- a flaw that leads to unrealistic project goals, frequent revisions, and escalating costs. The Commission has suggested making independent peer reviews mandatory and involving professional institutions to ensure that feasibility assessments include comprehensive risk analyses, demand forecasts, environmental and social impact evaluations, and market studies. Such initiatives, if executed sincerely, could close one of the most damaging gaps in project preparation.

Land acquisition and utility relocation remain among the most stubborn bottlenecks in project implementation. These delays not only stall work but also inflate costs and erode public confidence in government efficiency. To address this, the Commission has proposed launching separate preparatory projects dedicated solely to land acquisition and relocation before the main projects are approved. This approach would include ownership verification, environmental clearance and the securing of necessary permits and no-objection certificates (NOCs). While pragmatic, such measures require strong inter-agency coordination and political will -- qualities that are frequently in short supply.

The Planning Commission has also emphasised the need for more realistic Development Project Proposals (DPPs), particularly in the light of the country's growing vulnerability to climate change. It has recommended that all projects include mandatory climate risk assessments and adaptation strategies and that they be aligned with national and international research findings.

A further area of concern is the ineffective use of the Implementation Monitoring and Evaluation Division (IMED). Although IMED routinely generates valuable insights and recommendations, these findings are seldom acted upon by the concerned ministries. To strengthen oversight, the Commission has proposed setting up IMED offices at the district and divisional levels, improving inter-ministerial coordination, and making it obligatory for ministries to respond to evaluation reports. Without such institutional follow-through, monitoring risks become a superficial exercise with little corrective value.

In the last fiscal year, the Revised ADP (RADP) achieved an implementation rate of just 67.85 per cent -- equivalent to Tk 1.53 trillion out of a Tk 2.26 trillion allocation -- the lowest in more than a decade. In the preceding five years, RADP implementation ranged between 82 and 93 per cent. The decline signals not merely inefficiency but a deepening structural malaise.

Sectoral performance, particularly in health and education, was alarmingly poor. The Health Education and Family Welfare Division spent only 15.36 per cent of its allocation, while the Health Services Division used 21.74 per cent. Even the relatively better-performing Primary and Mass Education Ministry left Tk 16.1 billion unspent. Such underutilisation in sectors critical to human development not only hampers service delivery but also jeopardises the long-term social foundations of economic growth.

The persistent underperformance of ADP projects reflects more than administrative inertia-it exposes a fundamental mismatch between policy ambition and institutional capacity. While Bangladesh continues to expand its development budget, the machinery for translating allocations into tangible outcomes remains weak, undertrained and poorly incentivised.

To break this cycle, Bangladesh must embrace systemic reform. Project management must become a professional, accountable discipline rather than a bureaucratic obligation. Feasibility studies must be rigorous and independent. Monitoring mechanisms must have teeth, ensuring that evaluations lead to concrete corrective action.

Bangladesh's development aspirations ultimately depend not on the size of its budgets but on the efficiency and integrity of its execution. Building institutional capacity, fostering a culture of accountability, and ensuring that every taka spent yields measurable benefit must become the guiding principles of public investment. Without such transformation, the country risks remaining trapped in a cycle of ambitious plans undermined by weak implementation -- a pattern it can no longer afford to sustain.​