The country's premier bourse returned to a bearish phase last week as the benchmark index plummeted by nearly 100 points, driven by acute selling pressure.

A combination of persistent industrial energy shortages and broader macroeconomic concerns triggered a wave of cautiousness, leading investors to offload shares across the board.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) shed 97 points, or 1.65%, to close the week at 5,786. The blue-chip DS30 index followed a similar downward trajectory, falling 30 points to close at 2,162.

The market breadth was overwhelmingly negative, with 314 issues declining against only 52 that advanced, while 18 remained unchanged.

The fall in share prices wiped Tk3,800 crore from the DSE's total market capitalisation by the end of the week.

Trading activity also saw a contraction, with the daily average turnover dropping by 9.2% to Tk905 crore, down from the previous week's Tk997 crore.

According to EBL Securities' weekly market review, the capital bourse faced persistent downward pressure as investors remained wary of evolving regulatory developments.

The week began with cautious positioning as participants awaited the finalisation of amended margin rules. Although the long-awaited clarification on these regulations was eventually announced, market momentum failed to recover as persistent rumours regarding potentially stringent enforcement measures induced further panic.

"The unresolved national gas crisis has significantly raised concerns over future corporate earnings," EBL Securities noted. "This prompted many investors to reduce their equity exposure, keeping confidence fragile despite a brief late-session rebound toward the end of the week."

Sheltech Brokerage Limited echoed these sentiments, identifying the energy crisis as a primary shaper of market sentiment. The firm noted that even though margin lending rule amendments were finalised midweek, selling pressure persisted.

The pressure was further intensified by media reports suggesting aggressive regulatory action against market manipulators. Although the Bangladesh Securities and Exchange Commission (BSEC) issued a clarification denying such reports, the "surveillance ghost" continued to dominate the trading floor.

Sector-wise, the textile sector remained the most active, accounting for 21.2% of the total weekly turnover, followed by general insurance at 17.9% and the engineering sector at 9.6%.

Performance across almost all sectors was weak. The jute sector suffered the steepest correction, falling 4.6%, followed by paper and printing, which declined 4.5%, and mutual funds, which fell 4.4%.

Services and real estate was the only sector to record a gain, rising a marginal 0.2% during the week.

On the liquidity front, IPDC Finance, Dominage Steel, and Sharp Industries were the top turnover leaders.

In terms of price movement, Envoy Textile led the gainers' list with a 15.8% surge, followed by Al-Arafah Islami Bank and Reliance One Mutual Fund.

On the flip side, Sharp Industries was the week's worst performer, losing 22.1% of its value. Dominage Steel followed with a 21.1% decline, while ML Dyeing fell 15.3%.

The bearish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the Selective Categories' Index (CSCX) ended 2.04% lower at 9,430 and the All Share Price Index (CASPI) dropped 1.97% to settle at 15,491.

Bangladeshi exporters will continue to enjoy preferential access to the UK market after Bangladesh graduates from the least- developed-country status, the United Kingdom has assured.

Economists say the UK's decision provides Bangladesh with valuable policy space and greater certainty on the cusp of transition from the world's poor-country club.

A letter from the British mission in Bangladesh says 92 per cent of goods will continue to qualify for duty-free access without the need for Bangladesh to negotiate a separate trade agreement with the UK.

The letter, dated August 19, from James Goldman, Deputy High Commissioner and Development Director at the British High Commission in Dhaka, was sent to Md Ataur Rahman Khan, Secretary of the Ministry of Commerce.

p1-lead-outlineBangladesh currently enjoys tariff-free access for 99.8 per cent of goods exported to the UK under the UK's Developing Countries Trading Scheme (DCTS).

According to the communication in writing, Bangladesh will retain its existing market access for three years after its LDC graduation, providing exporters with a transition period before moving to a new preferential arrangement.

Following the transition period, Bangladesh will move to the Enhanced Preferences tier of the DCTS, under which 92 per cent of goods will continue to qualify for duty-free access without requiring further renegotiation.

Commerce ministry's senior officials have said apparel and readymade garments are within the 92-percent duty access list, so reduction in ratio won't affect Bangladesh's export.

Talking to the FE on Thursday, Commerce Secretary Md Ataur Rahman Khan termed it a significant assurance allowing Bangladesh to increase its capacity, diversify export and find new market.

"We hope to get three years' extension to stay as LDC until November 2029, so the existing duty benefit will remain unchanged for next three years," he said.

Trade economist Dr Masrur Reaz also takes it as a significant massage from the British High commission that would give a huge comfort to the apparel exporters.

Dr Reaz, chairman of the Policy Exchange Bangladesh, says when all other countries' preferential-trade benefit will expire with the LDC graduation, the UK will retain it.
"The letter made it clear that there is no expiration date of UK's preferential trade benefit," he says.

In this period, he suggests, Bangladesh must act seriously to sign free-trade agreements with the major trade partners to retain the trade benefits to avail after LDC graduation.

In the letter, the British government has also provided specific reassurance to Bangladesh's garment sector, the country's largest export earner.

Dr Mohammad Abdur Razzaque, Chairman of Research and Policy Integration for Development (RAPID), finds this as a welcome news for Bangladesh as it prepares for LDC exit.

"The UK has provided considerable certainty by confirming that Bangladesh will retain its existing market access for three years after graduation and will then move directly into the Enhanced Preferences tier of the DCTS."

For Bangladesh, he says, the most important aspect is the treatment to garments, which account for the overwhelming majority of the country's exports to the UK.History

"Market access for garments will remain unchanged under the Enhanced Preferences arrangement."

Equally important are the UK's revised rules of origin, which provide substantially greater flexibility in sourcing imported inputs and do not impose a double-transformation requirement.

This is particularly relevant for Bangladesh's garment industry, given its dependence on imported fabrics and other intermediate inputs in several product categories, Dr Razzaque further notes.

It is also important to recognise that the UK Government introduced these changes to its rules of origin autonomously.

"The changes, therefore, demonstrate the UK's recognition of the adjustment challenges facing Bangladesh and other graduating LDCs, while providing particularly important benefits for Bangladesh because of the scale and composition of its exports to the UK."

This is a positive example of how major trading partners can support a smoother LDC transition, he has said.

The combination of the three-year transition period, subsequent access to Enhanced Preferences, and more liberal rules of origin considerably reduce the immediate market-access risks associated with Bangladesh's graduation.

"Preferential access by itself cannot guarantee export growth. The priority should be to improve competitiveness, diversify products, make effective use of the more flexible sourcing provisions, and ensure that exporters understand and utilise the DCTS rules," he suggests.

The challenge for Bangladesh is to translate that opportunity into stronger and more diversified exports, economist observes.

Market access for garments covered by chapters 61 and 62 will remain unchanged under the Enhanced Preferences tier, according to the letter.

The updated rules of origin will also ease compliance requirements for garment exporters.

They will no longer be required to meet the existing "double transformation" requirement to qualify for preferential market access.

The new rules will provide exporters with greater flexibility to source inputs from a wider range of countries while retaining eligibility for preferential tariffs.

The UK is one of Bangladesh's major export destinations, particularly for readymade garments.

The continuation of preferential access is, therefore, considered important for maintaining the competitiveness of Bangladeshi products following graduation.

The British High Commission will also work with the Export Promotion Bureau (EPB) to organise a series of workshops for exporters and other trade stakeholders.

The workshops will focus on helping businesses better understand and utilise the benefits available under the DCTS, the letter reads.

Garment export to the UK registered .91-percent growth in the last fiscal year while it was negative 3.31 per cent in total EU zone.

Global apparel buyers are largely maintaining their orders from Bangladesh despite being concerned whether suppliers can meet deadlines amid the country's prolonged gas crisis.

For now, the orders are holding – but at a growing cost for manufacturers.

Representatives of four leading international buyers told TBS that their companies had no plans to reduce orders, while one said its orders had rather increased slightly in recent weeks.

The buyers said none of their suppliers had delayed shipments, despite factories struggling with the gas shortage and relying on costly alternative fuels to keep production running.

Moyeen Chowdhury, head of the Dhaka office of sportswear brand Puma, said exporters were struggling with rising costs but continuing to meet their commitments.
"We have no plans to reduce orders," he told TBS.

TBS also spoke to six exporters, and except for one, none reported a decline in export orders. However, a textile mill said it was limiting the orders it accepted despite having buyers because it could not ensure adequate production amid the gas shortage.

Bangladesh has been grappling with a gas shortage for the past two years. The crisis intensified following disruptions to global fuel supply chains after the outbreak of conflict in the Middle East and worsened further in July when a floating LNG terminal broke down.

The gas crisis has disrupted production across major industrial belts, forcing some factories to suspend operations and others to rely on expensive alternative fuels. Manufacturers are incurring heavy losses, while concerns are growing over possible worker layoffs.

Against this backdrop, members of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) are scheduled to meet today to determine their next course of action.

Bangladesh, the world's second-largest apparel exporter, shipped $38.7 billion worth of garments in FY26, while total textile exports approached $40 billion.
The textile sector, which forms the backbone of the apparel industry, is heavily dependent on gas. Textile mills use gas to generate captive power and operate boilers to produce yarn and fabric for garment manufacturers.

The government had assured industries that the gas situation would improve by 14 August. But industrialists said there had been no significant improvement as of 20 August.

Buyers remain committed
The head of the Dhaka office of a leading US-based buyer told TBS on condition of anonymity that the company had no plans to reduce orders from Bangladesh.
The brand imports more than $1 billion worth of apparel from Bangladesh annually and has more than 100 local suppliers.
"Almost all of them are delivering on time, although we can see that they are struggling," the representative said. "Factories are having to buy diesel to keep production running, pushing up their costs, but they are still meeting delivery commitments," he said.
The buyer's suppliers include all of Bangladesh's top 10 exporters, including Jaber & Zubair and Square, and none had so far missed delivery deadlines, he added.
A senior official of another European buyer said its suppliers were also continuing to deliver on time. "We have no plans to reduce orders. In fact, our orders have increased slightly in the past two weeks."

The managing director of a leading Bangladeshi exporter with annual exports of more than $600 million said none of its buyers had indicated plans to cut orders. "However, they are regularly checking on the situation. They are concerned and frustrated."
Shovon Islam, managing director of Sparrow Group, which exports around $350 million a year, said they were using diesel to keep factories running but had not missed any shipments.

"None of our buyers has told us they will reduce orders," he said, adding that diesel use was increasing the company's costs by around Tk3 crore a month.

One exporter reports order cut
BKMEA President Mohammad Hatem, who is also MD of MB Knit Fashions, said one of his European buyers had reduced its order by one-third from its original commitment.
"Because of the gas crisis, they don't want to take the risk," he said.

Azhar Khan, chairman of textile mill Methela Group, said gas pressure at his factory was currently just 0-1 PSI against the required level of more than 10 PSI.
"We're using alternatives to keep production running, but even then we can't operate at more than 60% of capacity. Buyers want to place orders, but we are unable to accept them," he told TBS.

Factories turn to costly alternatives
Exporters said many are increasingly turning to solar power, rice husk, diesel, batteries and even wood to keep production running.

"We are using rice husk to run our boilers," said Inamul Hoque Khan Bablu, managing director of Ananta Garments.

Azhar Khan said his company was also using rice husk and diesel to maintain production.

Some weaving mills in Narsingdi have resorted to burning wood, while others are using rice husk to run their boilers, Bablu said.

Many factories are also relying on diesel, which costs three to four times more than gas, significantly raising production costs.

BKMEA to decide next steps
BKMEA members will meet today to discuss the ongoing gas crisis and decide what steps industrialists should take, Hatem said.

"We have arranged the meeting to determine what industrialists should do in the face of the ongoing gas shortage," he said. "We will make a decision after the meeting. We may hold a press conference on Sunday to announce our position," Hatem added.

Bangladesh is set to begin formal negotiations with the European Union in September on a proposed free-trade agreement (FTA), as the country moves to secure long-term market access ahead of its LDC graduation.

A senior Commerce Ministry official says the ministry's FTA wing has already completed its preparatory work.

"The paperwork is done. We are now ready for the next steps," the official adds.

Formal talks are expected to begin in the second week of next month, although details as to whether the delegations will meet in Europe or in Bangladesh are still being finalised.

The ministry is prioritising the removal of non-tariff barriers (NTBs) and improvements in trade facilitation, including the introduction of a national single-window system. It is also preparing a pool of trade experts to support the negotiations.

"We are addressing issues raised earlier by the EU and working to improve the overall business environment," the official told The Financial Express.

Commerce Minister Khandakar Abdul Muktadir has said Bangladesh is pursuing FTAs with major partners, including the EU, to safeguard preferential market access after graduation from the least-developed country (LDC) status.

"We are working to ensure continued market access for Bangladeshi exporters before graduation," he said.

The EU has also signalled its readiness for exploratory talks but has urged Bangladesh to take concrete steps to remove NTBs and improve the investment climate. Both sides have already discussed trade facilitation, regulatory reforms and investment conditions.

Regarding the FTA with the European bloc, BGMEA President Mahmud Hasan Khan has said informal discussions on the agreement have already begun, while formal negotiations are expected to start in September.

"Bangladesh would also wait for the UN General Assembly, as any delay in the country's LDC graduation would provide some relief to exporters. However, FTA negotiations would continue regardless of the outcome of the graduation process."

BKMEA President Mohammad Hatem says the government has formed a committee and is working on the issue, while the business community is also assisting the government.

He says discussions on the FTA are expected to begin in September and Bangladesh should conclude the negotiations as soon as possible. "With India and Vietnam already having FTAs with the EU, Bangladesh could face intense competition in the European market if it fails to secure a similar agreement."

He feels that Bangladesh should aim to conclude the FTA before 2029 to safeguard its competitiveness on the EU market.

Talking to the FE, Policy Exchange Bangladesh founder Dr M. Masrur Reaz said a comprehensive FTA would be crucial for Bangladesh to remain competitive on the EU market after LDC graduation and the gradual phase-out of preferential schemes.

"Bangladesh has to put together a very serious diplomatic effort to secure the EU's formal interest in starting the FTA negotiations," he added.

The EU remains Bangladesh's largest trading partner, accounting for 21.5 per cent of the country's total goods trade in 2025, according to the European Commission.

According to the EC data, two-way merchandise trade stood at €23.3 billion in 2025, with the EU recording a €19.1-billion deficit. Apparel and textiles made up nearly 94 per cent of Bangladesh's exports to the bloc, while EU exports were led by machinery, appliances and chemicals.

Despite strong trade flows, investment remains limited. EU foreign direct investment stock in Bangladesh stood at €2.5 billion, as of 2024, compared to €86 million from Bangladesh in the EU.

Bangladesh currently benefits from duty-free, quota-free access under the EU's Everything But Arms (EBA) scheme. After LDC graduation, it is expected to retain EBA preferences for three more years, until 2029, and may later seek GSP+ status to maintain preferential access.

Strategic push for post-LDC trade: Dhaka is pursuing FTAs with multiple partners as part of its post-LDC strategy to diversify export markets and reduce reliance on unilateral preferences.

The urgency has increased as competitors such as Vietnam already enjoy an FTA with the EU, giving them stronger market positioning.

EU Ambassador Michael Miller earlier said the bloc is ready for exploratory FTA talks and had already shared a proposal with Bangladesh. Discussions have also covered NTB removal, trade facilitation and investment reforms.

A broader Partnership and Cooperation Agreement (PCA) is also under negotiation, covering trade, governance, human rights, climate action and sustainable development.

Talking to the FE, Dr Mostafa Abid Khan, component manager of the Support to Sustainable Graduation Project (SSGP) and a former member of the Bangladesh Trade and Tariff Commission, said the EU had given Bangladesh a list of non-tariff barriers (NTBs) that it needs to address before starting negotiations.

"If the government addresses these issues beforehand, it will help create a favourable environment at the negotiation table," he said.

The new government is also keen to undertake various reforms, and the trade-negotiation expert notes that the FTA discussions could help facilitate those reforms. "We have to start this immediately, as the trade bloc is an export destination for 45 per cent of our goods," he said.

As Bangladesh's major trading partner, signing an FTA with the EU could be a significant move for the country.

In the EU market, Bangladesh's major apparel competitor India is set to secure duty-free market access, while Vietnam will also enjoy the same facility by 2029 under its FTA with the bloc.

"It might also play a major role as the country is scheduled to graduate from the least-developed-country status," he added.

He also suggests that, beyond signing trade agreements, Bangladesh must complete the necessary reforms to facilitate smooth trade.

Restoring depositors' confidence in the banking sector was a major challenge for the BNP government as it inherited the most troubled financial sector in the country's history, with the default loan ratio exceeding 36% and dozens of banks unable to repay depositors.

However, in the first six months of the new government, the country's banking sector gradually stabilised, while a majority of depositors of the five merged banks received their money from government allocations. The Bangladesh Bank also moved to repay depositors by liquidating five non-bank financial institutions that are no longer viable.

The cabinet also approved the draft of the Bank Resolution (Amendment) Act, 2026, repealing the controversial provision that allowed former directors or owners of banks undergoing or slated for mergers to regain control under relatively favourable terms.

Under the amended law, the Bangladesh Bank moved to restructure the troubled financial sector by restricting, merging and liquidating ailing financial institutions, sending a strong message to owners to strengthen corporate governance.

However, managing default loans remained a major challenge for the banking sector as more than 20 banks have been facing a combined capital deficit of over Tk2 lakh crore, constraining their lending capacity.

In this context, the Bangladesh Bank introduced a Tk60,000 crore stimulus and refinancing package to revive closed factories, support struggling industries and restore private-sector investment. The package includes a Tk41,000 crore fund pooled from banks with excess liquidity and a Tk19,000 crore direct allocation from the central bank.

The foreign exchange market has also remained broadly stable, with the dollar rate holding steady while foreign exchange reserves increased by over $2 billion to more than $32 billion in the last six months, according to International Monetary Fund calculations.

However, inflation, which is one of the central bank's core monetary policy objectives, has not yet fallen to the expected level despite some decline.

Inflation fell to 8.32% in July from 9.13% in February, when the BNP government took office.

Muhammad A (Rumee) Ali, former deputy governor of Bangladesh Bank, said the government would have to take some tough decisions to address problems regarding capital adequacy, non-performing loans (NPLs), and lack of governance.

He questioned the policy of using taxpayers' money to keep weak banks afloat, saying it would require a huge amount of funding, the burden of which would ultimately fall on taxpayers.

He also placed particular emphasis on the autonomy of the central bank and the government's control over state-owned banks.

Rumee said, "The government will have to set specific targets and implement them while taking political realities into account."

Bangladesh's risk has increased internationally because of weaknesses in the banking sector, he said. "As a result, the cost of LC confirmation has risen, imported goods have become more expensive, and the overall supply chain is facing additional costs."

Despite these challenges, however, Rumee believes the government is making its best efforts to address the situation.

Fahmida Khatun, executive director of the Centre for Policy Dialogue, said several positive steps had been taken to improve the banking sector during the government's first six months. In particular, the government introduced a stimulus package worth around Tk60,000 crore to create employment and expand banking business, she said.

"The Bangladesh Bank now needs to properly monitor the implementation of these packages and ensure that the funds are used appropriately, Fahmida said.

She said restoring depositors' confidence must be given the highest priority. "Without regaining depositors' trust, there is no scope for the banking sector to recover. In particular, the new bank created through the government's merger initiative is a major test for the government. The initiative must be made successful at any cost."

Fahmida said as export earnings have not recorded significant growth, the government needs to take initiatives to engage expatriate Bangladeshis more closely in strengthening the economy. It should focus on improving their skills and ensuring non-stop services for expatriates, she said.

Referring to the government's commitment to ensuring Bangladesh Bank's autonomy and keeping state-owned banks free from the intervention of the finance ministry, the economist said the government must prioritise these issues and take effective steps within a short period.

"Above all, full transparency and good governance must be ensured in the banking sector. The government must ensure that the scale of losses suffered in the past is not repeated and that there is no further misuse or misappropriation of loans," she said.

Measures taken to revive the economy, accelerate digital transformation
During the government's first six months, the key positive initiatives in the banking sector included recovering defaulted loans, expanding digital transactions, stabilising the foreign exchange market, and increasing the flow of funds to productive sectors.

The integrated stimulus package introduced to increase the flow of funds to various critical sectors of the economy is expected to help create around 25 lakh new jobs.

While the normal lending rate in the banking sector stands at around 13%-14%, loans under these stimulus packages are being offered at much lower interest rates of just 4%-6%. This has provided significant relief to industrial entrepreneurs and is expected to support the revival of industries and new investment.

Special lending programmes through banks have been strengthened to ensure timely financing for farmers and widen access to loans for startups, young entrepreneurs and small businesses, moving beyond collateral-based lending.

The central bank has taken major steps to expand and make "Bangla QR" more effective as part of efforts to reduce reliance on cash and expand the use of digital transactions across the economy. Until now, it has primarily been used for payments at shops and merchant outlets. However, preparations are now underway to introduce person-to-person transactions through the system.

Recent Bangladesh Bank data also show a sharp rise in the use of Bangla QR. In January this year, around 723,000 transactions were conducted through Bangla QR, but the number surged to 6.255 million in July. Over the same period, the value of transactions increased from Tk212 crore to around Tk1,476 crore.

Long-term roadmap to reduce NPLs, strengthen governance
When the BNP government took office, non-performing loans (NPLs) accounted for around 32% of total loans, placing Bangladesh among the countries with the highest NPL ratios in the world. To reduce bad loans and restore good governance in the banking sector, both short- and long-term reform measures are being prioritised.

To expedite loan recovery, steps are being taken to speed up the resolution of pending court cases and strengthen banks' own recovery mechanisms.

In March 2026, detailed guidelines were issued for implementing the international accounting standard IFRS 9. Under the framework, banks will have to calculate potential credit losses in advance using the Expected Credit Loss approach from 2028. In addition, a fresh Asset Quality Review is being undertaken to accurately assess banks' loan portfolios, the actual quality of their assets, non-performing loans and potential losses, without concealing the extent of the risks.

Facilitating foreign transactions and preventing money laundering
During the first six months of the BNP government, the Bangladesh Bank took several notable measures to facilitate foreign currency transactions, bring remittances and export proceeds into the country, and restore stability to the dollar market.

The Bangladesh Bank has allowed authorised dealer banks to partner with cross-border digital payment service providers, such as PayPal and Payoneer, to facilitate foreign transactions and the processing of outward remittances. This has made it easier for freelancers and online businesses to bring their earnings into the country. The process for making tuition fee payments to foreign universities through banking channels has also been made easier.

Efforts to recover money allegedly siphoned abroad have been significantly strengthened through international legal initiatives in the banking sector. For the first time, banks have been directed to engage international law firms to identify funds and assets linked to the country's top 10 business groups accused of siphoning money abroad. Subsequently, another 42 companies – each with more than Tk200 crore in default loans – were brought under the initiative, with plans underway to engage eight more international law firms.

Moves that drew criticism
Alongside its positive initiatives, several weak policy decisions, controversial appointments and institutional short-sightedness on the part of the government have further deepened the crisis in the banking sector.

Amid efforts to reform the banking sector, a government decision sparked widespread controversy. Section 18(a) was newly inserted into the Bank Resolution Act, 2026, which was passed by parliament on 10 April this year. The controversial provision allowed former shareholders or disputed owners of banks undergoing mergers or resolution to apply, subject to certain conditions, to regain shares, assets and liabilities of those banks.

The provision drew strong criticism from bankers, economists, governance advocates and others amid concerns that it could create an opportunity for former owners linked to irregularities, loan fraud and poor management in the banking sector to regain control. Transparency International Bangladesh described the provision as posing a risk of "impunity" in the banking sector and the recurrence of past irregularities.

Ultimately, following intense criticism, the government was forced to reconsider its position. On 11 August, the Cabinet approved the draft Bank Resolution (Amendment) Act, 2026, which completely repealed the controversial provision.

During this period, the Bangladesh Bank issued a controversial "exit policy" or circular as part of its efforts to reduce non-performing loans. Under the circular, defaulting borrowers of banks and financial institutions have been given a significant one-time concession, allowing them to have both accrued and unaccrued interest waived if they repay only the principal amount of their loans.

While the measure may temporarily help clean up banks' balance sheets by reducing the burden of non-performing loans, it has raised concerns among bankers and economists who warn that the measure could significantly increase the risk of wilful default becoming more widespread across the banking sector.

The BNP made a major commitment in its election manifesto to increase the autonomy of the Bangladesh Bank as part of financial-sector reforms and to remove state-owned banks from the administrative control of the Financial Institutions Division of the finance ministry, placing them fully under the control of the central bank. However, even after the first six months of the government, no major or effective steps have yet been seen in this regard.

Central bankers and stakeholders in the banking sector have stressed that practical institutional reforms are needed to end political and administrative interference in the appointment of the governor and senior officials, the formation of boards of directors, policymaking and the management of state-owned banks.

The lack of progress on these reforms during the first six months means that political and administrative influence over state-owned banks remains largely unchanged, which is considered one of the major factors behind the rise in non-performing loans.

The proposed establishment of a Mortgage Refinance Company (MRC) in Bangladesh could open a new avenue for raising long-term funds from the capital market and help expand access to long-term housing finance.

The institution could mobilise funds by issuing corporate bonds and mortgage-backed securities (MBS), which could then be used to provide long-term refinancing to banks and financial institutions.

The World Bank Group has begun assessing the feasibility of establishing an MRC in Bangladesh following a formal request from the Financial Institutions Division (FID) of the Ministry of Finance.

An MRC could help address a key constraint in Bangladesh's housing finance market, where banks and financial institutions largely rely on short-term deposits to finance long-term housing loans.

By providing a dedicated refinancing facility, the proposed institution could help lenders access longer-term funding and potentially support the development of a deeper market for housing-related securities.

The initiative could also create new investment instruments for institutional investors, including pension funds, insurance companies and other long-term investors, while broadening the country's capital market financing base.

As part of the initiative, a World Bank Group delegation met with the Bangladesh Securities and Exchange Commission (BSEC) yesterday (19 August). BSEC Chairman Masud Khan chaired the meeting at the commission's office.

The meeting discussed the potential structure and operations of the proposed Mortgage Refinance Company (MRC), as well as its possible role in expanding housing finance and deepening the capital market.

An MRC can play an important role in providing long-term liquidity to the housing sector and developing the bond market. Commercial banks typically collect short-term deposits and provide long-term home loans, creating a maturity mismatch and liquidity risk.

An MRC can raise long-term funds through bonds and use the proceeds to refinance banks' mortgage portfolios. This would provide banks with liquidity and enable them to expand their capacity to issue new housing loans.

Similar mortgage refinancing structures are operating in countries such as India, Pakistan and Malaysia. Establishing an independent MRC in Bangladesh could also help expand access to affordable, long-term housing loans, particularly for middle- and lower-income households.

An earlier TBS report, citing a World Bank policy paper, said the proposed MRC could raise funds from the capital market by issuing corporate bonds and mortgage-backed securities. This could increase the supply of long-term fixed-income instruments and create new investment opportunities for institutional investors.

Bangladesh's mortgage market remains underdeveloped

Bangladesh's relatively small mortgage market highlights the need for a Mortgage Refinance Company (MRC).

According to World Bank data, total housing finance loans stood at Tk105,890 crore as of June 2022, equivalent to 7.8% of total private-sector credit and only 2.7% of GDP.

Compared with countries with similar per-capita GDP, Bangladesh's mortgage market remains significantly below its potential. Mortgage debt should be around 6.5% of GDP, according to the World Bank, indicating an additional lending opportunity of around Tk90,000 crore.

Bangladesh also needs around 432,000 new housing units annually, further increasing demand for affordable, long-term housing finance.

The World Bank's 2025 Country Private Sector Diagnostic identified housing for middle-income households as a promising investment sector and recommended developing the legal and regulatory framework for an MRC.

Bond market remains a key challenge

However, Bangladesh's underdeveloped corporate bond market could pose a major challenge to the MRC model.

Experts cited in an earlier TBS report warned that weak demand in the bond market could make MRC bond issuance difficult. Former World Bank economist Zahid Hussain said banks could become the main buyers if the bond market remains weak.

The feasibility study will therefore need to assess the MRC's capital structure, regulatory framework, refinancing model and ability to raise funds from the capital market.

The ongoing energy crisis is no longer affecting just the power-intensive industries, but creating risk factors across all sectors, businesses said yesterday, calling for swift steps.

Gas shortages, high fuel costs and unreliable supplies are disrupting production and investment, they said at a seminar “Biannual Economic State in FY2026”, organised by the Dhaka Chamber of Commerce & Industry (DCCI) at its auditorium in Dhaka.
Gas shortages are delaying industrial projects, raising manufacturing costs and creating risks for sectors ranging from pharmaceuticals and garments to ICT and small businesses, said DCCI President Taskeen Ahmed.

Presenting the keynote paper, he warned that the energy crunch is no longer confined to power-intensive industries.

Citing the Munshiganj Active Pharmaceutical Ingredient Industrial Park as an example, he said gas supply constraints are continuing to delay production at the park despite plots having already been allocated to 27 companies.

His remarks continue a months-long pattern of escalating DCCI warnings on the energy crisis. Speaking to The Daily Star on 21 August, he estimated that Bangladesh’s energy crisis is costing the industrial sector up to Tk 2,387 crore a day in lost economic output as factories continue to face supply disruptions.

The DCCI, in the keynote paper, recommended ensuring gas connections or alternative energy sources, along with an operational central effluent treatment plant and other essential infrastructure, to make the industrial park fully functional.

Uninterrupted gas and electricity supplies to industrial zones are essential for reducing production costs and ensuring factories can meet increasingly demanding manufacturing timelines, it said.

The chamber also noted that CMSMEs are bearing the cost of dependence on fossil fuels, and recommended financing rooftop solar installations and energy-efficient machinery to reduce their exposure to rising fuel costs.

It also called on authorities to accelerate these efforts while attracting stronger domestic and international participation in the revised offshore bidding round. It also called for diversifying energy import sources to cushion the economy against external supply and price shocks.

Also speaking at the event, Transcom Group Chief Executive Officer (CEO) Simeen Rahman said uncertainty and disruptions in energy supply have become a major problem for industries across the board.

“We are seeing our production costs rise on a daily basis — costs that none of us had calculated in our annual operating plans. This is directly affecting our bottom line and making companies increasingly vulnerable,” she said.

Higher utility costs are also driving up production costs, while rising raw material prices and operating expenses are adding further pressure, she added.

The Transcom CEO noted that despite a business-friendly budget, private-sector growth faces high interest rates, costly borrowing, persistent inflation, weak confidence, rising non-performing loans and tighter bank lending, constraining investment, expansion and employment.

Consequently, Bangladesh’s global competitiveness is being eroded, she said.

Finance Minister Amir Khosru Mahmud Chowdhury said the issue of the energy sector is a huge problem for the government.

He said, “We are introducing so many policies, carrying out so many reforms, doing so much deregulation, and providing all the support needed to make the private sector-friendly.

“But we cannot solve the electricity and gas problem in one day. This is a problem that we have inherited. And solving the electricity and gas problem will take time.”

He said despite mobilising all the resources and making every possible effort, the government is failing to fully control this timeframe.

The government is looking at what could be done as a stopgap measure in the short term, as well as what could be done in the medium and long term.
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Earlier this month, the minister had said it would take at least two years to fully fix the power and gas shortages.

At yesterday’s seminar, he said the government is negotiating with multiple Floating Storage and Regasification Units (FSRUs) simultaneously.

However, he said securing FSRUs would not immediately solve the gas shortage, as the units must first be negotiated, brought to Bangladesh and installed, with several other steps involved in the process

“At the same time, we are also starting work on shore-based gas reserves. Similarly, for oil, we want to ensure a three-month reserve across the energy sector,” said the minister.

He stated that the government inherited dangerously low energy reserves, some below 15 days, but has raised them to one month and aims to reach three months.

“We are trying to do it in the fastest possible way. The energy crisis will improve slowly. It will improve, but it will improve slowly. And I know the damage this is causing to industry; that goes without saying,” he said.

“Because of the war in the Middle East, our fiscal space has reached a very difficult position. Because of the higher prices, particularly the high cost of fuel, we are already taking a hit of $5 billion,” he added.

Hossain Zillur Rahman, executive chairman at Power and Participation Research Centre (PPRC), said the country’s economy is at a critical juncture.

He noted that if the right decisions are taken at this stage, the economy could gain the desired momentum; otherwise, there is a risk of falling further behind.

He observed that harassment in various areas of the economy has evolved into a negative structural issue, preventing reform initiatives from delivering the desired results.

He stressed that the government must pay due attention to this issue and that reducing such harassment is essential for expanding the tax net.

Mahbubur Rahman, president of the International Chamber of Commerce Bangladesh, said in the current fiscal year, inflation has not yet declined to the desired level, while private-sector credit growth remains at its lowest level in many years.

Investment has remained stagnant and the industrial sector has been unable to operate at full capacity.

He said that high interest rates, rising production and import costs, exchange-rate volatility and uncertainty over energy supplies have significantly increased the cost of doing business.

Zaidi Sattar, chairman, Policy Research Institute of Bangladesh, said there is a significant gap between policy formulation and implementation in Bangladesh, resulting in the country failing to achieve the desired benefits.

He said that while Bangladesh maintains relatively liberal policies for export product and market diversification, its policies on imports remain restrictive, with high tariff rates contributing to higher domestic inflation and increased prices of goods.

He also called for the formulation and implementation of appropriate strategies within the available timeframe for Bangladesh’s LDC graduation.

Professor Mustafizur Rahman, distinguished fellow at Centre for Policy Dialogue, said that a revolution in tax collection is essential for implementing the Annual Development Programme, while there is very little possibility of achieving the revenue collection target set in the national budget.

Bangladesh has sought US$ 5.3 billion in financing from the World Bank to build MRT Line-2, its proposed fifth metro rail line, as the government moves to secure external funding for the major transport project.
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The Ministry of Road Transport and Bridges (MoRT&B) has recently sent a preliminary development project proposal (PDPP) to the Planning Commission, seeking approval and confirmation of overseas financing for the project, officials said.

"We have started work to build Dhaka's fifth metro line, for which Tk 650 billion (US$ 5.3 billion) in investment will be required," said an official at the MoRT&B.

A preliminary development project proposal (PDPP) has been sent to the Planning Commission (PC) for approval and confirmation of overseas financing, he added.

"We have received the PDPP from the ministry. The proposal has been scrutinised. It will be sent to the Economic Relations Division (ERD) next week to obtain confirmation of external financing," said Kabir Ahmed, Chief of the PC, last week.

He said the proposed MRT-2 is a very important transport line as it will cover Old Dhaka, which is densely populated and a major commercial area.

The MRT Line-2, to be built between the capital's Gabtoli and Narayanganj, will require around Tk650 billion in funding, with the World Bank having already shown interest in financing the project, another MoRT&B official said.

The World Bank last year provided technical assistance to the government for conducting feasibility and detailed-design studies for the long-proposed MRT Line-2, he added.

The ministry official said the World Bank had recently met with them and made a presentation on financing the MRT-2 project. "We have requested the global lender to finance the $5.3 billion project," the ministry official said.

Another development partner, the Asian Infrastructure Investment Bank (AIIB), has also shown interest and met with officials in the middle of this month.

"Since the project will require nearly $5.3 billion in funding, we may even prefer a co-financing arrangement with the World Bank," he added.

An ERD official said the World Bank had already provided a grant of US$2.5 million to Dhaka Mass Transit Company Limited (DMTCL) for pre-construction studies on MRT Line-2, planned to run from Gabtoli to Narayanganj.

The proposed 35-kilometre line would pass through Gabtoli, Dhaka Udyan, Mohammadpur, Jhigatola, Science Laboratory, New Market, Azimpur, Palashi, Dhaka Medical College, Gulistan, Motijheel, Kamalapur, Manda, Dakhingaon, Dhamripara, Signboard, Bhuighar and Jalkuri before reaching Narayanganj.

A spur line branching off from Gulistan to Sadarghat is also being considered, although its feasibility has yet to be explored.

Meanwhile, the DMTCL is working to prepare the feasibility study and detailed design for the MRT-2 line.

ERD officials said this would be the World Bank's first involvement in Bangladesh's mass rapid transit (MRT) infrastructure development after a long hiatus since the Washington-based lender withdrew from funding development in the country's road and communications sector.

The lender suspended funding for the country's transport sector more than a decade ago, citing corruption and mismanagement by relevant government authorities.

Japan, the Asian Development Bank (ADB) and South Korea are already involved in mass rapid transit projects in Bangladesh.

Officials said Wednesday that the World Bank had recently agreed to provide technical assistance to the government to conduct feasibility and detailed-design studies for the long-proposed MRT Line-2.

According to DMTCL estimates, construction of MRT Line-2 may cost around Tk650 billion, a figure that will be refined after completion of the feasibility study and detailed design.

The government formed DMTCL in July 2013 to build and operate metro rail services, and the company has since adopted a time-bound action plan to construct a 140-kilometre metro rail network comprising six lines across Dhaka by 2030, aiming to reduce traffic congestion and air pollution.

Currently, MRT Line-6, funded by Japan, is operational between Uttara and Motijheel, with an extension to Kamalapur expected to open by the end of 2026.

DMTCL is now working to build MRT-1, MRT-5 North and MRT-5 South with financial assistance from Japan and the ADB.

The government has taken up a Tk683 crore project to provide freelancing training to more than 51,000 unemployed and job-seeking youths in 13 metropolitan cities, aiming to create employment opportunities and foster new entrepreneurs.

The Department of Youth Development has prepared a Development Project Proposal "Creating Employment through Freelancing Training for Unemployed Youths in All Metropolitan Cities."

Under the proposed project, which has already been sent to the Planning Commission for approval and will run from 1 July 2026 to 30 June 2031, young men and women will receive demand-driven freelancing training to help them earn income from both domestic and international markets.

According to the proposal, the initiative aims to reduce unemployment in metropolitan areas and increase young people's self-reliance by equipping them with the skills needed to work on international and local online marketplaces.

At least 60-70% of trainees are expected to engage in income-generating activities after completing the training.

The training will cover practical skills such as working on online marketplaces, creating professional profiles and portfolios, bidding for jobs, communicating with clients and managing assignments. The target is for trainees to start earning within three to six months of completing the course.

Participants will receive certificates, job linkages, mentorship and follow-up support to help them establish sustainable careers. The project aims to keep the dropout rate below 20%.

Where necessary, trainees will also receive technological assistance, including laptops or other equipment, enabling them to start working immediately after completing their training.

The project also plans to develop a strong network of freelancers in the long term, allowing experienced workers to support newcomers and helping create a sustainable digital employment ecosystem.

Low-income and marginalised youths and women will receive priority under the project, with a target of ensuring 30-40% female participation.

A functional freelancing model will first be developed in Dhaka city, which could later be replicated in other cities and districts.

Priyasindhu Talukder, director (Training) of the Department of Youth Development, said the domestic job market has limited opportunities, while freelancing gives young people access to the global market.

"Through online work, it is possible to get jobs from both domestic and foreign clients," he said.

The director said Bangladesh's relatively low cost of living gives its freelancers a competitive advantage, allowing them to offer services at competitive rates to international clients.

"For this reason, the government is giving special importance to freelancing training at the city corporation level," he said, adding that metropolitan areas host young people from almost every district of the country.

"Students and young people from different districts come to live in cities such as Dhaka, Chattogram and Rajshahi. So, providing training in these cities will make the initiative more effective," he added.

According to Talukder, freelancing training is not a new initiative of the government. The programme initially started in 16 districts, was gradually expanded to 48 districts and is now available in all 64 districts.

He said freelancing also allows Bangladeshi workers to work with foreign clients without needing a visa or passport, making the initiative particularly relevant.

Educational qualifications will not be the primary criterion for selection, he said. Basic computer knowledge and the ability to learn will be more important.

The proposed course will generally run for three months and include two levels, basic and advanced. Trainees who perform well will be promoted to the advanced level.

However, training alone will not guarantee success, Talukder said, stressing that participants must have interest, concentration and dedication to succeed.

The project document says Bangladesh is currently benefiting from a demographic dividend, with a large share of its population in the working-age group. But the opportunity is time-bound and may begin to decline between 2033 and 2040, according to experts.

It is therefore essential to turn the country's large youth population into skilled human resources before the demographic dividend fades, the document says.

According to the latest Bangladesh Bureau of Statistics (BBS) Labour Force Survey, the country's unemployment rate is around 4.63%, with the number of unemployed people estimated at 2.7-2.74 million. A significant portion of the unemployed are young people.

Meanwhile, the global economy is rapidly moving towards digital employment. The global gig economy and freelancing market is estimated at around $455 billion and continues to expand, with strong demand for services such as graphic design, digital marketing, web development, content creation and data processing.

The 13 metropolitan cities covered by the project are Dhaka North, Dhaka South, Chattogram, Gazipur, Narayanganj, Khulna, Rajshahi, Bogura, Sylhet, Rangpur, Barishal, Cumilla and Mymensingh.

These cities are major centres of economic activity and employment, and the project seeks to leverage their concentration of young people to expand access to digital employment.

Bangladesh needs a medicine pricing system that keeps essential drugs affordable for patients while allowing local manufacturers to produce them profitably, experts and industry representatives said at a webinar yesterday.

They said the existing system has failed to keep pace with rising production costs, making some essential medicines commercially unviable and contributing to shortages. At the same time, patients are bearing most healthcare costs themselves.

The comments came at a webinar titled “Medicine Price: Arguments and Way Forward”, organised by the Power and Participation Research Centre (PPRC).

The discussion followed the government’s decision on August 3 to cancel the Essential Medicines List 2026 and Medicine Pricing Method 2026 prepared by the interim government. Until a new list is prepared, the government will follow the 1994 essential medicines list and pricing system.

The interim government had added 135 medicines to the essential list in January, taking the total to 295, following a taskforce recommendation. It also decided to fix prices for all essential medicines to make them more affordable.

After coming to power following the February polls, the BNP government formed a National Drug Advisory Council in June. The council was tasked with advising on the National Drug Policy, preparing a new essential drug list and updating it every two years, and developing the pharmaceutical sector to ensure the availability of essential medicines.

OUTDATED PRICES HURTING SUPPLY

Sayed Abdul Hamid, a professor at the Institute of Health Economics at the University of Dhaka, said the problem with Bangladesh’s essential medicine pricing system dates back decades.

In 1994, prices of 117 essential medicines were fixed using a cost-plus-markup formula covering raw materials, packaging, production, taxes, utilities and profit. But the prices were not regularly reviewed as production costs increased.

Some companies have since stopped producing certain essential medicines, while others continue to make them by using profits from other products to cover losses, he said.

Sayed called for an independent, data-driven authority to review prices regularly using reliable cost information.

Rumana Huque, a professor of economics at the University of Dhaka, said the stakes are high because Bangladeshis spend more than Tk 37,000 crore on medicines each year. Patients pay around Tk 35,000 crore of that amount directly, according to National Health Accounts data.

Government hospitals often run out of medicines within the first 10 to 20 days of a month, forcing patients to buy them from private pharmacies, she said. The problem is more serious in urban areas, where access to free medicines is limited.

Rumana also pointed to widespread self-medication and a lack of reliable data on import costs, manufacturing, distribution, wholesale and retail margins, and promotional expenses. Without such information, it is difficult to identify where costs and profits build up along the supply chain and regulate prices fairly, she said.

Kaiser Kabir, chief executive officer of Renata Limited, said strong competition and a relatively short supply chain have made Bangladesh’s medicine prices among the lowest in the world.

But that does not mean costly medicines are affordable for patients with chronic or serious illnesses.

A locally produced cancer medicine, for example, may cost around Tk 500 per tablet, compared with about Tk 30,000 for an imported version. Even the local price can be unaffordable for patients who need the medicine regularly, he said.

Instead of imposing blanket price controls, Kaiser suggested that the government directly procure expensive essential medicines and provide them free or at subsidised prices.

CALLS FOR TRANSPARENCY AND REFORM

Supreme Court advocate Jyotirmoy Barua questioned the transparency of the pricing system.

He said the government’s much-discussed pricing policy was never formally published, while the list of 117 medicines under the current framework has also not been gazetted.

The 1982 Drug Control Ordinance gave the government authority to set maximum medicine prices through gazette notifications. However, Jyotirmoy said the 2023 Drugs and Cosmetics Act appears to have limited that authority to medicines included in a government-published list.

He cited an example of a 50-tablet pack, without naming the medicine. A pack produced in August 2024 had a maximum retail price of Tk 600, while the same medicine produced a month later was priced at Tk 1,000.

“The issue is not about keeping prices frozen, but ensuring that every increase has a clear and accountable basis,” he said.

Mujshtuo Husain, an adviser at the Institute of Epidemiology, Disease Control and Research, said cancelling the February gazette on essential medicine pricing was a step in the wrong direction.

He said the revised system was better than the 1994 framework because it allowed the essential medicine list to be expanded and prices to be adjusted gradually to market conditions over four years.

Any concerns about the formula could have been addressed through consultations with manufacturers, consumers and other stakeholders, he said.

M Mosaddek Hossain, senior vice-president of the Bangladesh Association of Pharmaceuticals Industries, said local manufacturers now meet around 98 percent of the country’s medicine demand, including medicines for cancer, tuberculosis, malaria and HIV/AIDS.

However, stagnant prices have made some essential products commercially unviable, he said, citing shortages of Monocard 10mg.

He called for a joint review of the pricing formula based on affordability, quality, availability and the long-term sustainability of the pharmaceutical industry.

Moderating the webinar, PPRC Executive Director Hossain Zillur Rahman said the lack of comprehensive health insurance means most healthcare costs are paid directly by patients.

He said policymakers need to address four issues together: reducing patients’ financial burden, keeping the domestic pharmaceutical industry viable, developing an appropriate pricing formula, and ensuring the government fulfils its responsibility to make healthcare affordable, particularly for poorer people.

Exceptionally low river levels in Europe hit hard by drought and record heat have plunged transporters into turmoil this summer, driving up costs that everyday consumers could end up bearing.

Major rivers on the planet’s fastest-warming continent, including the Rhine and Danube, have sustained water shortages that scientists directly link to climate change.

The situation is especially critical in Germany on the Rhine, the core of the European inland waterway transport network.

“The situation is unprecedented,” a spokesperson for Maersk, the Danish shipping giant, told AFP. “Today, most of the inland ports along the Rhine cannot be reached by barge anymore.”

Clecat, a European association that represents freight forwarders, agreed that the “most acute disruption has been on the Rhine”.

It said that at Kaub, a critical bottleneck for traffic on the river, the water gauge fell to around six centimetres (2.4 inches) on August 14, below the previous record low of 25 centimetres in 2018.

“The effects are being felt along the major industrial corridor from Rotterdam”, Clecat said, adding that “Conditions are also severe on parts of the Danube, particularly in Serbia, Hungary and Romania”.

One workaround for logistics operators is to move as much cargo off rivers as they can to trains or trucks.

“The aim is to... keep the distances travelled on the Rhine as short as possible,” transport company Contargo told AFP.

But the opportunities for rail and road transport are limited.

Jean-Laurent Kistler, development director at the French waterways authority (VNF) in Strasbourg, where the Rhine forms the border with Germany, estimated that transporting the load of a single barge required “100 to 200 trucks”.

But many products transported in bulk -- such as chemicals, hydrocarbons, construction materials or grain -- are not easily transferred to containers. VNF Strasbourg says the load carried by ships on the Rhine fell from an average of 1,500 tonnes to just 400 tonnes in August.

The Clecat association noted the low river levels had already resulted in “higher transport costs, delays, postponed shipments and reduced production flexibility”.

“The ships have to sail with lighter loads than usual to have less draught,” said Alexandre Charpentier, transport specialist at the consulting firm Roland Berger, referring to how deep a vessel sits in the water.

“With fixed costs remaining the same, this leads to very significant unit cost increases,” he said. Operators pass on the resulting costs by applying low-water surcharges, which they introduce progressively if river levels keep falling.

These costs have reached more than 1,000 euros ($1,170) in surcharges per container at the most strained points, such as Kaub or Cologne, according to Contargo’s rates.

“It can quickly double for container freight” and “be even more drastic for bulk cargo”, said Pierre Cossart, director of Sogestran Logistics.

COSTS PASSED ON?

According to Clecat, “whether higher logistics costs translate materially into consumer prices depends on the duration of the disruption, the commodity and companies’ ability to absorb or pass on costs”.

But it noted that “For many bulk commodities, transport is an important component of the delivered price, so sustained increases will ultimately be felt further down the supply chain.”

Charpentier said it was too early to forecast eventual price increases for consumers, but warned that the extra costs were difficult to absorb in full.

With drought episodes only expected to increase, operators are banking on better-suited vessels and greater intermodality, or the added use of trains and trucks.

But resilience also comes from water management, according to the VNF’s Kistler.

While France has built a series of reservoirs and diversion channels along its portion of the Rhine to manage the flows, on the German side the river runs freely and is highly dependent on rainfall.

“We went from 10 ships a day to 25 (on Wednesday), 14 of them loaded,” said Kistler, adding that it was “still far from the optimal load”.

Bangladesh plans to launch a US$2.0-billion fund in Hong Kong for equity investment in the country's businesses and projects to diversify financing and reduce reliance on conventional borrowing.
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Finance and Planning Minister Amir Khosru Mahmud Chowdhury unveiled the plan on Saturday, explaining that the proposed Bangladesh-dedicated fund would provide equity rather than loans, meaning it would not create a direct debt obligation for the government.

"We are going to have a dedicated fund for Bangladesh in Hong Kong. It will be a $2.0 billion worth of Bangladesh-dedicated fund. This is equity and not a loan," he said at a seminar organised by Dhaka Chamber of Commerce and Industry (DCCI) in Dhaka.

The seminar, titled 'Biannual Economic State in FY2026: Fiscal & Monetary Perspective and Private-Sector Expectations', brought together policymakers, economists, bankers and business leaders.

The proposed fund is part of a broader effort to widen Bangladesh's access to international capital as the government seeks to ease pressure on domestic-financing sources and create more room for private-sector borrowing.

Mr. Khosru said Bangladesh was also considering issuing dollar, panda and samurai bonds to tap different international capital markets.

"We want to go for dollar bonds. We will go for panda bonds and samurai bonds," he said.

The government has already reduced its reliance on bank borrowing to some extent, but the shift would take time, he told his business audience.

"We have already brought down bank borrowing somewhat. But, the process will take time. We are moving in that direction."

The finance minister said reviving Bangladesh's capital market is central to the government's strategy to develop alternative sources of finance.

He said the market has effectively stopped functioning as a reliable source of long-term capital for an extended period, limiting companies' ability to raise funds outside the banking system.

"As there was virtually no functioning capital market in Bangladesh for quite some time, we are trying to revive it as one of the alternative sources of financing."

The government has overhauled the regulatory leadership of the Bangladesh Securities and Exchange Commission, appointing a chairman and four commissioners through what Mr. Khosru described as a transparent selection process.

He said investor confidence was beginning to return, although the market has not yet fully recovered.

"I won't say that the capital market has recovered completely, but confidence is coming back. The market is gaining ground and moving upward."

He said restoring investor confidence alone, however, would not be sufficient. Companies must also believe that the market is credible enough to raise capital through listings.

"Good companies will come for listing only when they have confidence in the market."

Mr. Khosru criticised the previous state of the market, saying that it had become akin to a "casino" in which ordinary investors could lose money while a small group of participants benefited.

The government was seeking to replace that culture with greater transparency, professionalism and institutional governance, he said.

Mr. Khosru said the government did not intend to increase the tax burden on existing taxpayers but wanted to expand the tax base.

"When we talk about increasing taxes, we are not talking about increasing taxes on those who are already paying. We are trying to expand the network."

Automation of tax administration would be important in achieving that goal. Reducing direct interaction between taxpayers and tax officials could improve transparency and limit opportunities for corruption, he said.

The minister also said the government was working to remove regulatory barriers and planned to establish a committee and dedicated website through which businesses could report obstacles to deregulation.

Customs and port procedures would be made more time-bound to reduce business costs and speed up import clearance.

"We are not leaving anything open-ended. Every decision of this government is time-bound," he said.

The government was also reviewing the work of the Bangladesh Bureau of Statistics to improve the credibility of economic data.

Mr. Khosru admitted that the government faced a difficult energy situation and that electricity and gas shortages could not be resolved immediately.

Negotiations were under way for two or more floating storage and regasification units, while efforts were also being made to increase gas reserves.

He noted the government had inherited energy reserves equivalent to only about 15-17 days but had increased them to roughly one month, with a longer-term target of three months.

"The energy crisis will improve slowly. It will improve, but slowly," he said.

The government has introduced measures for businesses affected by circumstances beyond their control, including rescheduling facilities, grace periods and exit option.

He also referred to a Tk600 -billion financing package for small and midsize enterprises, saying that lending would be based on eligibility rather than political influence.

"Those who fulfil the criteria will receive the loans. There will be no political influence in giving loans," he said.

The government also wants to bring artisans, cottage industries, sports, entertainment, theatre, music and other creative activities into the mainstream economy under its concept of "democratisation of the economy".

Support would include credits, skills development, design, branding and marketing, including access to global online marketplaces.

Mr. Khosru said raising the tax-to-GDP ratio is necessary to create fiscal space for welfare, infrastructure, business support and subsidies.

He also said the government had managed to turn around the economy despite inheriting difficult conditions.

"Bangladesh has been unfortunate that whenever the BNP comes to power, it inherits the country at a time when the economy is in a devastated condition," he said.

ICC Bangladesh President Mahbubur Rahman, who was special guest at the event, said inflation remained above the desired level and called for stronger private-sector confidence, competitiveness and a predictable investment environment.

Mr. Rahman said that as Bangladesh enters fiscal year 2027, the economy remains resilient despite the slower growth, persistent inflation, weak private investment, banking-sector stress and global uncertainty.

DCCI President Taskeen Ahmed, in his keynote presentation, said global economic growth in 2026 was projected at 3.1 per cent amid trade barriers, the Middle East crisis, supply-chain disruptions, higher energy prices and rising transport costs.

These pressures were weighing on investment, business and trade.

He highlighted budget measures, including digitising company registration to complete the process within 48 hours, extending bonded-warehouse facilities for the leather, footwear and home-textile sectors, providing duty-free benefits to 10 new sectors, expanding tax automation and speeding up customs procedures.

PPRC Executive Chairman and BRAC Chairman Hossain Zillur Rahman said the economy was at a critical juncture.

He proposed an "Economic Reform Acceleration Unit" to monitor implementation of economic reforms.

PRI Chairman Zaidi Sattar said Bangladesh faced a significant gap between policy formulation and implementation.

He also criticised restrictive import policies and high tariffs, saying they contributed to higher domestic prices and inflation.

He urges the government to formulate and implement strategies within the remaining timeframe before Bangladesh's graduation from least-developed-country status.

CPD distinguished Fellow Mustafizur Rahman said a "revolution" in tax collection was needed to finance the Annual Development Programme and questioned the likelihood of meeting the revenue target in the national budget.

He also called for monetary-policy reforms and greater caution in taking foreign loans and managing debt repayments.

BIDS Director-General Dr. A K Enamul Haque said prolonged high inflation was particularly concerning for a remittance-dependent economy amid global uncertainty.

He called for greater banking-sector liquidity and a more business-friendly environment.

Dr. Haque said that the inflation globally so far predicted that will not be contained on many grounds including supply -chain bottlenecks.

Transcom Group CEO Simeen Rahman said budget measures had yet to restore the desired momentum in private-sector activity, with small and medium-sized enterprises among the hardest hit.

She urges improvements in ports, customs and logistics.

Mutual Trust Bank Managing Director and CEO Syed Mahbubur Rahman called for closer coordination between monetary and fiscal policies, greater tax digitisation and investment in skilled workers.

DCCI President Taskeen Ahmed delivered the welcome remarks, former DCCI presidents including Abul Kasem Khan and Rizwan Rahman also spoke, among others.

DCCI senior vice-president Razeev H Chowdhury, vice-president Md Salem Sulaiman, board members and public- and private-sector representatives attended the seminar.

The Treasury's latest daily cash and debt balances statement showed total public debt outstanding at $40.047 trillion on ‌Tuesday, a total that includes Treasury securities held by the public of $32.266 trillion and intra-governmental debt holdings of $7.782 trillion.

The federal government's IOU has now more than doubled in less than a decade, from $19.95 trillion when President Donald Trump was sworn in for the first time in January 2017. Roughly one-third of that increase occurred during two years of frantic government borrowing to fund the Covid-19 pandemic responses undertaken by Trump and former President Joe Biden, while the fiscal policy choices of both presidents combined with long-running tax-and-spending imbalances account for the rest.

Budget watchdog groups have anticipated crossing the threshold ​for weeks and issued stark warnings that a full-blown debt crisis could erupt unless lawmakers confront an unsustainable fiscal outlook and raise taxes, cut spending or both.

"Forty trillion dollars of debt doesn’t exist solely on the government’s ledgers; ​it is felt throughout the economy and finds its way to the pocketbooks of people one way or another," said Maya MacGuineas, president of the nonpartisan Committee for a Responsible ⁠Federal Budget.

"The more we borrow, the more we exacerbate inflation, squeeze out other priorities in the budget, and leave ourselves vulnerable to emergencies at home and turmoil abroad," MacGuineas said in a statement just after the Treasury data was released.

She said the $40 ​trillion figure was reached less than five months after debt reached $39 trillion, and has quadrupled in less than 20 years after taking until 1981 to reach $1 trillion for the first time.

"It is staggering how predictable the fiscal decline of a global power ​can become," MacGuineas added.

Global US creditors may already be growing wary, with demand from foreign investors holding nearly one third of Treasuries declining over the past year.

Days after a $25-billion auction of 30-year Treasury bonds went off at the highest yield since 2021, yields on so-called long bonds on Tuesday hit their highest levels in nearly two decades as investors demanded greater compensation in the face of hefty US government bond issuance. Yields move inversely to bond prices.

On Wednesday, US Treasury Secretary Scott Bessent took a bold step to push long bond yields back down, announcing a doubling of buyback sizes ​for 10- to 30-year Treasuries to at least $4 billion per operation.

Higher Treasury yields at the longer end tend to push up interest rates for mortgages, car and commercial loans. With the mountain of debt showing no signs of abating, Trump on Wednesday ​repeated his frequent demand for lower rates.

Asked at the White House whether Americans should worry about bond market volatility, Trump said: "I don't think so at all. I think we have a very powerful country, and we're powering through these ridiculous interest rates — they're ridiculous. Look, ‌when our country ⁠is strong, interest rates should go down."

PANDEMIC SPENDING, AND THEN SOME

The Treasury last week reported the fourth-highest monthly deficit in US history — $432 billion for July — as tariff refunds turned customs receipts negative for the third month in a row and outlays for Social Security and Medicare benefits for seniors continued to grow. The deficit for the first 10 months of fiscal 2026 has already exceeded the total gap for all of fiscal 2025 with two months to go in the current fiscal year.

Trump has largely ignored the dwindling number of fiscal hawks in his Republican Party, championing heavy spending across his two terms. Public debt rose by $7.8 trillion during Trump's first term, with more than half of it accumulating during the pandemic response over his last nine months in ​office.

Since Trump took office a second time in January 2025, the ​US debt load has increased by $3.8 trillion, for total ⁠growth of $11.6 trillion across his two terms so far.

Public debt increased by $8.4 trillion during Biden's term, also marked by heavy Covid-19 recovery spending, but driven as well by big-ticket outlays for infrastructure investment, clean energy subsidies and other priorities championed by his Democratic Party.

The Committee for a Responsible Federal Budget estimates that the policy choices of Trump and Biden have increased the federal ​debt trajectory beyond what would have accumulated under the existing spending statutes when each took office.

For instance, Trump's landmark second-term legislative package — the One Big Beautiful Bill Act — will ​add another $4.7 trillion in debt, according ⁠to the Congressional Budget Office, the nonpartisan bookkeeper for federal lawmakers.

Trump has branded his second presidency as one focused on cost-cutting, marked by early federal agency job cuts ordered by the non-governmental Department of Government Efficiency. But much of his spending reductions have targeted so-called "discretionary" programmes, the smallest portion of the federal budget. The US spends roughly $7 trillion annually, and 60 per cent of it is earmarked for so-called "mandatory" programmes, including payments for Social Security, Medicare, Medicaid and veterans' care, that generally grow to keep pace with living costs.

Another $1.1 trillion pays the interest ⁠on US borrowing, ​the cost of which rises as the debt pile grows and as interest rates climb. The 2025 fiscal-year budget marked the first time debt service ​costs exceeded Pentagon funding. In the first 10 months of the 2026 fiscal year, interest costs have eclipsed Medicare healthcare outlays to become the second-largest line item in the federal budget, behind the Social Security pension system.

The US is spending more to fund the retirement and healthcare costs of the "baby boom" ​generation, straining the trust funds behind Social Security and Medicare even as payroll and income tax revenues fall short of covering federal costs.

As Europe tightens its packaging rules, Vietnamese exporters are facing a new reality: what wraps a product may matter almost as much as what is inside. The European Union’s new requirements are forcing businesses to rethink packaging while opening the door to a more circular industry.

The EU’s Packaging and Packaging Waste Regulation (PPWR) entered its general application phase on August 12, covering packaging placed on the EU market regardless of its material or country of origin.

For Vietnamese exporters, the rules mean that packaging can no longer simply be a protective layer around a product. Its design, recyclability, recycled content and chemical safety are increasingly be-coming part of the conditions for selling products in the bloc.

The impact could extend across Vietnam’s major export sectors, including food, seafood, coffee, cashew, textiles, footwear, electronics, cosmetics, wood and other consumer goods.

“The new regulation affects the entire production and export chain, from design for recycling and the use of recycled materials to traceability and the control of substances of concern,” said Nguyễn Thi, a lecturer at the Hà Nội University of Natural Resources and Environment.

The challenge comes as trade with the EU continues to expand. According to the Ministry of Industry and Trade, Vietnamese exports to the bloc exceeded US$56 billion in 2025, up 8.6 percent from a year earlier, while exports reached $25.78 billion in the first five months of 2026, up 13.3 percent year on year.

The PPWR introduces requirements covering food-contact packaging, sales packaging, grouped pack-aging and transport packaging.

From August 12, all packaging must comply with new limits on substances of concern, with particular attention to per- and polyfluoroalkyl substances in food-contact packaging.

This is particularly relevant to Vietnamese seafood exporters, which use food-contact packaging such as plastic trays, wrapping films and plastic bags. Companies will need to ensure that information on such content is available in the technical documentation for their packaging.

The PPWR establishes a phased transition, with technical requirements for recyclability and recycled content becoming progressively stricter over the coming years. From 2030, all packaging placed on the EU market will have to be designed to be recyclable.

Food-contact plastic packaging will have to contain at least 30 percent recycled plastic where PET is the main component and 10 percent for packaging made from other plastics such as polypropylene and polyethylene. The requirements will rise to 65 percent and 25 percent by 2040, respectively.

The PPWR also seeks to reduce unnecessary packaging. By 2030, manufacturers and importers will have to ensure that the weight and volume of packaging are reduced to the minimum necessary to perform its intended function. For grouped, transport and e-commerce packaging, the proportion of empty space will be limited to 50 percent.

Labelling requirements will also be introduced according to the PPWR’s implementation timetable, with harmonised information on packaging materials intended to help consumers sort waste.

The PPWR highlights a growing trend: to enter the EU market, goods will increasingly be judged not only by the product itself but by its entire life cycle, according to Thi.

The EU-Vietnam Free Trade Agreement has given many Vietnamese products tariff advantages, but as tariffs fall, the bloc is steadily raising standards on environmental protection, emissions, traceability, the circular economy and supply chain responsibility.

The Ministry of Industry and Trade has also said these green requirements are increasingly becoming an important condition for Vietnamese goods to maintain their foothold in the EU market as well as global markets.

Yet experts say the PPWR should not be viewed simply as another trade barrier but a wider shift in global trade in which environmental requirements are increasingly becoming conditions for market access.

Experts say that Vietnamese companies that invest early in recyclable packaging, recycled materials, traceability and circular production could gain an advantage not only in Europe but also in other devel-oped markets with similar environmental requirements.

Meeting these standards could create opportunities for businesses to expand into other markets, said Sita Zimpel, a project director at GIZ Vietnam, adding that this could turn compliance spending into longer-term investment in production efficiency and product differentiation.

The changes could also reshape Vietnam’s packaging industry, forcing it to move towards a more circu-lar model. Instead of producing packaging, using it and sending it to waste streams, companies would need to build stronger links among packaging manufacturers, waste collectors, recyclers and users of recycled materials.

Annie Trần, senior manager at Informa Markets Vietnam, said the packaging industry was at an im-portant transition point towards a more circular model as environmental requirements increasingly became mandatory conditions in international trade.

Businesses should regard changes in materials, standardised design, greater recycling and circular sup-ply chains as long-term development strategies rather than merely a way to comply with regulations, she said.

She stressed that this could create opportunities for investment in food-grade recycled plastics, recy-cling technology, testing and certification, waste sorting and collection, and new packaging materials.

However, Nguyễn Ngọc Sang, chairman of the Vietnam Packaging Association, said domestic packaging producers were of small and medium sizes with limited capacity for investment.

Policymaking should therefore provide an appropriate roadmap, particularly as Vietnam still lacks spe-cialised research centres for the packaging industry, he said.

One of the biggest challenges for Vietnamese companies is likely to be the supply of recycled material that meets EU standards.

According to Thi, Vietnam does not yet have a fully developed system of standards for food-grade re-cycled plastic, while domestic testing and certification capacity remains limited.

Food-grade recycled PET, or rPET, is particularly challenging because recycled material must meet stringent safety requirements before it can be used in packaging that comes into direct contact with food.

The problem starts with the quality of collected waste. Trần Đức, head of external affairs at Suntory PepsiCo Vietnam, said the quality of recovered plastic remained unstable because waste collection relies heavily on informal collectors.

For PET bottles, impurities can account for 40-70 percent of recovered material depending on the batch, making bottle-to-bottle recycling more difficult and increasing production costs compared with virgin plastic.

That created a potential mismatch between the EU’s growing demand for recycled materials and Vi-etnam’s ability to supply them at the required quality and cost, he said.

According to the Vietnam Association of Seafood Exporters and Producers, packaging commonly used in seafood exports, including plastic bags, trays, boxes, cardboard cartons, plastic pallets and wrapping films, falls within the scope of the PPWR.

Companies will therefore need to review their packaging systems, prepare documentation demon-strating compliance and keep pace with technical guidance from the EU.

Vietnam is developing its own packaging regulatory framework through extended producer responsi-bility (EPR), recycling obligations, financial contributions for waste treatment and measures to reduce difficult-to-degrade plastic products.

Nguyễn Văn Phan from EPR Vietnam Office under the Ministry of Agriculture and Environment, said the framework would not only improve the implementation of EPR in Vietnam but also help business-es gradually meet increasingly stringent requirements in international markets, particularly the EU’s new rules on packaging and the circular economy.

Experts say faster development of standards for food-grade recycled plastic, testing capacity, waste collection and sorting infrastructure and a reliable market for recycled materials will be critical to help-ing Vietnamese companies adapt.

The broader challenge is whether Vietnam can build the industrial ecosystem needed to compete in a global economy where sustainability is becoming a condition of market access.

For exporters, early preparation will be equally important.

Companies would need to audit their existing packaging, identify materials and chemicals that may pose compliance risks, work with suppliers to develop recyclable alternatives and prepare technical documentation to ensure compliance, Thi said.

Bangladesh wants to expand its investment-to-GDP ratio by 6.57 percentage points within a year as it has set the aspiration in the newly approved five-year development strategy and framework, analysts say.

Economists have termed this "over-ambitious", saying the target is almost impossible to achieve.

Prime Minister Tarique Rahman formally unveiled the cover of the "Five-Year Strategic Framework for Reform and Development-FYSFRD (July 2026 to June 2031)" alongside its complementary Strategic Action Matrix on Wednesday.

Several economic targets, including the investment-to-GDP ratio increase goal, were set there.

Moving decisively away from traditional and rigid bureaucratic planning models, the General Economics Division (GED) under the Planning Commission prepared the dynamic economic blueprint, designed to guide the nation "from fragility to prosperity".

According to the framework's indicator, the government wants to raise the investment-to-GDP ratio to 34.5 per cent within the current fiscal year.

The Bangladesh Bureau of Statistics (BBS) data shows the ratio reduced to 27.93 per cent in FY26 from 28.54 per cent in FY25.

In addition, the government wants to grow the ratio to 40 per cent in FY31.

According to the target, the ratio would reach 35.6 per cent in FY28, 36.8 per cent in FY29, and 37.6 per cent in FY30.

Amid the ongoing austerity and low expenditure capacity of the government, the strategy paper has set a target to increase public investment by one percentage point to 5.6 per cent of GDP within this year from 4.6 per cent estimated in FY26.

It says, "Prudent macroeconomic policies, appropriate supply side measures, and political stability are expected to stabilise the macroeconomic imbalances and reduce vulnerabilities in the near term."

Consequently, real GDP growth is expected to rise from the recent 4.0 per cent to 6.5 per cent in FY27, while CPI inflation is expected to ease to 7.5 per cent, it also says.

Economic growth is projected to accelerate thereafter, reaching 8.5 per cent by the beginning of the next decade, while inflation is projected to decline to 5.0 per cent by FY31, adds the paper.

The GED claims the macroeconomic and sectoral growth projections are made using the dynamic CGE model.

The industry sector's contribution to growth has been steadily declining in recent years owing to the shocks and mismanagement described above, the paper says.

"This is projected to reverse in the acceleration phase of the strategy. Further, a stylised production function estimate finds that capital's contribution to economic growth has also become negative as private investment has ground to a halt because of economic disruptions."

As the economy stabilises and then accelerates, growth is projected to rely more on employment and total factor productivity than had been the case in the past, it adds.

Professor Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue (CPD), tells the FE that he thinks the target is very ambitious and impossible to achieve.

"Bangladesh's business climate is traditionally very poor. Besides, the energy crisis has been added in recent months. So it is really difficult to achieve the target within a year."

Policy Exchange Bangladesh Chairman Dr Masrur Reaz says since the Bangladesh investment climate has not improved and lots of changes have been added in recent times, it is almost impossible to push the investment-to-GDP ratio up to 34.5 per cent.

The government should be realistic in its target and take immediate action to improve the business climate as well as tap more local and foreign investments, he adds.

According to the GED's five-year development strategy, the economic roadmap will be deployed across three strict, sequential operational phases.

The first two years will be treated as "Economic Recovery", where immediate policy prioritisation is directed at stabilising macroeconomic indicators, curbing inflationary pressures, resolving acute banking sector liquidity issues, and aggressively rebuilding depleted foreign exchange reserves.

In the third year, "Restoration & Transition" will be conducted, accelerating institutional banking reforms, modernising trade logistics, and jumpstarting private sector investments.

In the fourth and fifth years, the government would go for "Reconstruction & Acceleration", which will be the final phase and aimed at high-velocity, tech-led growth, absolute poverty reduction, and massive FDI penetration.

Meghna Group of Industries (MGI), one of the country’s largest industrial conglomerates, has entered the sanitaryware market, seeking to tap growing demand amid increased construction activity.

The group, which has been manufacturing construction materials, namely cement, for more than two decades, expanded into sanitary products five years after launching its ceramic products business in 2021 as part of its efforts to diversify its product portfolio.

“We want to offer customers a complete range of construction material solutions to meet their needs. That’s why, alongside tiles, sanitaryware is part of our portfolio expansion,” MGI Chairman Mostafa Kamal told The Daily Star recently.

The conglomerate, which also operates in the consumer goods and energy sectors, said it has invested around Tk 300 crore in its sanitary products business. Its factory has a production capacity of around 60,000 pieces a month and employs more than 600 people.

MGI mainly manufactures basins and commodes, which together account for nearly 80 percent of the sanitaryware market, valued at around Tk 2,000 crore. The market is growing by roughly 8 to 10 percent annually, according to industry operators.

Located in Ashariar Char in Narayanganj, the factory currently has the capacity to produce 2,000 washbasins and commodes a day.

The group said it uses 100 percent imported raw materials, sourced from selected countries, to maintain international product standards. The materials are currently imported from Thailand, Malaysia, Egypt, India, Germany and China.

According to fiscal 2024-25 data from the Bangladesh Ceramic Manufacturers and Exporters Association, domestic products account for about 65 percent of the sanitaryware market, while imported products make up the remaining 35 percent.

“Customers today are placing greater importance on quality and reliability, alongside product variety. To meet this demand, we are giving special emphasis to the sanitaryware sector,” said Tanjima Mostafa, a director of MGI.

“Through a combination of quality ceramic products, modern designs, and operational efficiency, we want to strengthen our position in this sector by delivering Fresh Sanitaryware to our customers,” she said.

Founded in 1976, MGI operates more than 57 industrial units and employs over 65,000 people, according to a press release.

For the first time in nearly a decade, India recently decided to allow imports of duty-free raw sugar until October in order to contain surging prices and ensure adequate availability in the domestic market.

The government argued that duty-free imports of sugar have been allowed as a "precautionary" measure to guard against a possible further rise in prices in view of the coming festival season, when demand would go up considerably.

Sugar prices in India, the world's largest consumer of the sweetener, increased in a month from Rs 48.18 per kg on 20 July to Rs 55.70 per kg on 20 August, the government acknowledged.

The government has rejected criticism that the increase in sugar prices is due to diversion of sugar for ethanol production.

In fact, the share of sugar diverted for ethanol has declined from around 12% in 2022-23 to around 9% in 2025-26. Moreover, nearly three-fourths of the ethanol produced in the country now comes from grains, particularly maize, said the Ministry of Consumer Affairs, Food & Public Distribution on Friday.

India normally produces around 320-340 lakh tonnes of sugar annually, against domestic consumption of around 280-290 lakh tonnes. When there is surplus production, excess stocks block the funds of sugar mills and can delay payments to sugarcane farmers, it pointed out.

Diversion of excess sugar towards ethanol has helped address this structural problem and improved the financial health of sugar mills, maintained the Ministry.

As on 20 August 2026, 97% of sugarcane dues for the 2025-26 sugar season had already been paid to farmers, it said, adding that the improved financial position of sugar mills had reduced their dependence on government subsidies.

While around Rs 14,600 crore of subsidy was provided to the sugar industry between 2014 and 2021, no such subsidy has been announced since 2021-22.

The Ministry said the increase in sugar prices was due to a combination of factors, including lower-than-expected domestic production, increased demand ahead of the festive season, weather-related damage to the sugarcane crop, tightening global sugar supplies and speculation and hoarding by some sections of the industry.

India's sugar production during the current season is expected to be around 306 lakh tonnes, compared with the initial estimate of around 343 lakh tonnes by key sugarcane-growing states, according to official figures.

Production has been affected by disease in sugarcane as well as waterlogging caused by excess rainfall.

But despite the lower-than-estimated production, adequate sugar stocks are available in the country to meet domestic demand until the new crushing season begins in October.

The government also points out that international sugar prices have risen sharply from $474 per tonne on 30 June to $552 per tonne on 20 August, an increase of over 16% in less than two months.

Speculation and hoarding by some sugar mills and traders have also contributed to the recent price increase. Several steps have therefore been taken, including the imposition of a stock limit of 400 tonnes on sugar dealers across the country from 1 August to 30 November.

States and sugar mills have been advised to begin crushing from 15 October, and this is expected to raise October sugar production from the usual 3 lakh tonnes to more than 10 lakh tonnes, the Ministry says.

Bangladesh Bank's special loan scheme 'Udyog' to facilitate new-generation entrepreneurs with collateral-free financing is set to be rolled out within this month, opening up a new avenue of commercial lending.

Sources at the central bank said as part of the plan to lend the young generation low-cost funds, the banking regulator would initially launch the scheme for all upazilas in eight districts of the country's eight divisions from later this month before its countrywide implementation from January next.

The BB comes up with the special lending scheme to uphold aspirations of the young generation, who led the July-August mass uprising in 2024 that toppled Sheikh Hasina's governing regime for building a new Bangladesh where there will be no discrimination in access to jobs, funds and other basic facilities

Seeking anonymity, a BB official said they planned to start the lending package having tenure of three years in all upazilas in eight districts under eight divisions from later this August, an eventful month when Bangladesh saw a massive mass uprising two years ago.

"We called this initial implementation of the scheme activation phase but its countrywide replication will start probably from January next," the official said.

The Tk 10-billion lending package will have two portions - loans involving Tk 5.0 billion and grants equivalent to the loan package.

The central banker said the banking regulator would not form any special fund to finance the young entrepreneurs having maximum age limit of 28 years. The loans portion comes from the existing refinancing schemes while the grants money will be initiated with the banks' unused CSR funds and BB's own funds.

Talking about the process from loan application to the stage of approval, another BB official said entrepreneurs having maximum age limit of 28 years can apply for availing the funds and commercial banks will shortlist those on their own through making necessary crosschecks.

Then the shortlisted entrepreneurs will be invited to a daylong session in the upazila concerned to make their presentation about the structure of their business with a plan before a special committee to get their loan approved, he said.

"The special committee will have members from commercial banks, the central bank and renowned entrepreneurs. There will be no one from PEP (politically exposed person) category," he said.

About security of the collateral-free funds, the central banker said each entrepreneur can get loans of up to Tk 1.0 million and an equivalent amount of money will be given as grants.

For example, he said, an entrepreneur is receiving a Tk 1.0-million loan. If he/she fails to pay back the loan in the stipulated time, the grants money equivalent to the defaulted portion will be added up to the loan amount.

"If the entrepreneur pays back the loan amount in time, he/she does not think about the grants. Otherwise, the borrowers will have to pay for both loans and grants on default and will face legal actions," he said.

According to the lending package, 10 entrepreneurs from each upazila will be selected for the special loan scheme.

The US imposed 50 percent tariffs on some Canadian goods on Saturday after the two longstanding allies failed to reach a trade deal, with each side accusing the other of derailing days of talks.

The tariffs that came into effect just after midnight (0400 GMT) on some $20 billion of Canadian goods - things like wooden ice hockey sticks that are rarely used anymore - are far from an economic game-changer for the largest US trading partner after Mexico.

That represents just over 5 percent of Canada’s exports to the US.

But the new tariffs mark an increase in tensions between President Donald Trump and Prime Minister Mark Carney, and will likely make broader talks to renew the US-Mexico-Canada free trade agreement more difficult. Carney said he had suspended trade negotiations and Canada would retaliate “dollar for dollar” on the new tariffs.

“I have decided to suspend trade negotiations with the US and have directed Canada’s negotiators to return to Ottawa,” Carney said in a statement.

“They (negotiators) have worked hard, in good faith, to defend the interests of Canadians throughout these negotiations up until the very last minute,” he said.

“However, last-minute changes in the US proposed terms were unfair, uneconomic, and called into question the reliability of any deal.”

Carney, the only person to ever run the central banks of two major economies, was elected last year on promises to stand up to Trump, and remains broadly popular. Polls show most Canadians oppose making any concessions to Trump.

Hours earlier, the two sides had seemed close to an agreement that sources said would have lowered tariffs on steel, aluminum and autos and potentially brought American alcohol back to Canadian liquor stores.

“Tonight, Canada declined to finalize the trade deal under the terms agreed earlier this week,” US Trade Representative Jamieson Greer said during a White House briefing.

“This is a missed opportunity for Canada to partner with the United States, which is the fastest-growing economy in the G7,” Greer said.

A senior Trump administration official said the US offer would have put Canada in the best tariff position of any major exporter to the US, but that Canada had sought additional concessions, especially on steel, aluminum, autos and softwood lumber.

No additional talks are scheduled as the US implements the new duties, the official said.

Trump last month threatened to impose a raft of duties on a range of Canadian imports including wine, furniture, dairy products, cement, clothing, fishing rods, hockey equipment.

The tariffs, which do not qualify for preferential treatment under the US-Mexico-Canada free-trade agreement, open up some already vulnerable sectors to potential severe damage that could lead to job losses and business closures, trade experts have said.

The decision by the US administration followed three days of talks in Washington between Canada’s minister for trade with the US, Dominic LeBlanc, and Greer.

The new duties add to existing US tariffs on steel, lumber and autos which have taken major hit in the last 18 months, although the malaise has been largely contained within these sectors.

Market operators said the ongoing energy crisis, regulatory uncertainty and heightened geopolitical tensions continued to weigh on investor sentiment and risk appetite.

A leading stockbroker said fresh challenges to the country's macroeconomic outlook arising from the energy crisis were discouraging investors from committing new funds to equities.

The Strait of Hormuz, a key route for global fuel shipments, remains virtually closed, while energy prices have started rising again after easing earlier.

Investors are particularly worried that persistently high energy costs could fuel inflationary pressure in the coming quarter and weigh on corporate earnings.

"These concerns prompted many investors to stay on the sidelines," the stockbroker said.

The market began the week on a cautious note as investors awaited the final margin-loan regulations. Selling pressure intensified in subsequent sessions as uncertainty persisted.

At the same time, the unresolved national gas crisis raised concerns over corporate earnings, particularly for gas-dependent industries, further weakening investors' risk appetite.

The Bangladesh Securities and Exchange Commission (BSEC) eventually gazetted the revised Margin Rules, 2025 on Tuesday, introducing changes aimed at making margin financing more flexible while strengthening regulatory oversight.

Under the revised rules, only 'A' and 'B' category shares with a price-to-earnings (P/E) ratio of up to 40 will be eligible for margin loans. The rules also relaxed the thresholds for margin calls and forced sales.

The broader market struggled for momentum throughout the week, closing lower in four of the five trading sessions. Although a late-week rebound in the final session trimmed some losses, market operators noted that buying interest remained highly selective.

The benchmark DSEX index settled the week 98 points, or 1.66 per cent, lower at 5,786 points, after gaining 23 points in the previous week.

The decline came despite renewed buying interest in a number of selective stocks towards the end of the week, indicating that investors remained highly selective rather than returning to the market with broad-based confidence.

EBL Securities said the stock market witnessed acute selling pressure during the week as investors remained cautious amid regulatory developments and persistent domestic uncertainties, which weighed heavily on overall risk appetite.

Despite the long-awaited clarification on margin regulations, market momentum failed to recover as persistent rumours of some stringent measures induced further caution among investors, the stockbroker said.

The DS30 Index, which tracks the country's blue-chip stocks, plunged 30 points to 2,162, while the Shariah-based DSES Index dropped 21 points to 1,156.

Falls in the prices of several large-cap stocks, including BRAC Bank, Sharp Industries, Dominage Steel, Islami Bank and LafargeHolcim, accounted for more than 28 points of the benchmark index's weekly decline.

Trading activity also remained subdued, with total turnover falling to Tk 45.3 billion from Tk 49.9 billion in the previous week.

Consequently, average daily turnover declined more than 9 per cent to Tk 9.06 billion from Tk 9.97 billion in the preceding week.

The decline in average turnover indicated that investors remained selective and preferred to stay cautious amid uncertainties surrounding the market outlook.

The textile sector accounted for the largest share of the week's total turnover at 21.2 per cent, followed by general insurance at 17.9 per cent and engineering at 9.6 per cent.

Market breadth remained strongly negative, with 314 issues declining against only 52 advancing, while 18 remained unchanged on the DSE.

IPDC Finance emerged as the most-traded stock of the week, with shares worth Tk 1.4 billion changing hands, followed by Dominage Steel, Beximco, Malek Spinning Mills and Sharp Industries.

Most sectors ended lower during the week. Non-bank financial institutions suffered the highest loss of 2.4 per cent, followed by engineering, power, telecommunications, banking and pharmaceuticals.

The Chittagong Stock Exchange (CSE) also ended the week sharply lower. Its All Share Price Index (CASPI) plunged 312 points to close at 15,491, while the Selective Categories Index (CSCX) lost 197 points to 9,431.