The government has begun the process to seek a deferral of the country’s scheduled graduation from the least developed country (LDC) club at the end of this year, newly appointed Commerce Minister Khandaker Abdul Muktadir said yesterday.

“The process has been initiated by the Ministry of Commerce, and in coordination with the Economic Relations Division (ERD), necessary communications and procedures will be expedited,” a commerce ministry statement said.

Business leaders had been urging the authorities to delay the graduation, prompting the new government to act swiftly.

“Although there was no obligation to send a letter in this regard within the first week, the government has started working on the issue from today [Wednesday],” the minister told journalists after assuming office at the Secretariat in Dhaka.

He said about 85 percent of the country’s export earnings still come from apparel. This overreliance has slowed export growth.

Stressing the need to broaden the export base, Muktadir said the government would support private sector investment to help open up new markets.

Asked about market conditions during Ramadan, Muktadir sought to reassure consumers. If supplies remain steady, he said, prices should stay stable.

“The government has sufficient stock of essential commodities for the month of Ramadan and the period afterwards, and there is more in the pipeline. Therefore, there is no reason to panic,” he added.

The minister acknowledged that prices of some goods tend to rise at the beginning of the month of fasting for Muslims, often because of a sudden spike in demand. However, he said such pressures usually do not last very long.

Responding to a question on whether the proximity of Ramadan to the new administration taking office posed a challenge, he said the month would be a major test. The government must meet public expectations and deliver.

On investment, the minister said uncertainty deters both foreign and domestic investors. A stable environment is essential. Investors commit capital only when they are confident of reasonable returns on their investment and labour.

Muktadir also pointed to demographic pressures. Around 20 to 22 lakh people enter the labour market each year. Weak investment over the past two to three years has added strain to the economy. Unless reversed quickly, he said, it could threaten jobs and growth.

State Minister for Commerce Md Shariful Alam and Commerce Secretary Mahbubur Rahman were also present.

Bangladesh Bank (BB) expects inflation, which has remained high in recent years, to ease in the coming months due to strong rice and winter vegetable harvests and declining global commodity prices.

In its quarterly report for July-September 2025, published yesterday, the central bank said it, along with other government agencies, has worked hard to control inflation and support lower-income groups.

Measures such as removing Letter of Credit (LC) margin requirements for rice, onions, dates, sugar, pulses, and edible oil imports, along with Trading Corporation of Bangladesh (TCB) truck sales, are expected to reduce prices of essential goods.

Favourable Aman rice and winter vegetable production, stable exchange rates, rising foreign reserves, and easing global commodity prices are also likely to help keep inflation in check.

The central bank is expected to gradually ease its tight monetary policy once inflation consistently falls.

The report said that inflationary pressures eased in the first quarter of the current fiscal year, mainly due to ongoing monetary tightening. However, the decline has been slow, and inflation remains above the target, meaning tight policies are likely to continue in the near term.

The 12-month average headline inflation rate fell from 10.03% in June 2025 to 9.45% in September 2025.

Regarding the banking sector, the report said the country’s banks remain under strain, as a sharp deterioration in asset quality -- not seen in decades -- hit profitability and weakened capital.

However, a rebound in deposit growth improved overall liquidity, and BB’s continued support for responsible borrowers, along with banks’ stronger recovery efforts, should help curb the rise of non-performing loans (NPLs).

On the external sector, Bangladesh faced pressure in the first quarter as the current account shifted from surplus to deficit. This was driven by a larger trade deficit and higher external payment obligations, including import costs and interest on external debt.

Strong remittance inflows partly offset the pressure. On the financial account, large net inflows came from foreign direct investment and medium- and long-term borrowing, while portfolio investment remained low.

Even though the overall balance of payments was positive for the quarter, gross official reserves fell slightly, mainly due to valuation effects and lower foreign liabilities of the central bank. Nevertheless, reserve levels remained comfortable, supporting exchange rate stability under the market-based system.

The number of household deposit accounts containing between Tk 1 crore and Tk 25 crore rose by nearly 8 percent year-on-year in June 2025, reflecting the key role played by households in sustaining the financial system.

According to a Bangladesh Bank (BB) report, these accounts increased to 36,932 as of June 2025, up from 34,258 in June 2024.

The total amount held in these specific deposit tiers rose from Tk 80,200 crore in June 2024 to Tk 82,000 crore in June 2025.

“The deposit base of Bangladesh’s banking sector remained predominantly concentrated in the private sector, reflecting the central role of households and private institutions in sustaining financial intermediation,” BB said in its June 2025 Banking Sector Update report.

The overall number of household deposit accounts grew significantly from 14.2 crore in June 2024 to 15.9 crore in June 2025, an 11.4 percent increase.

Total household deposit volume also expanded significantly, reaching Tk 11.08 lakh crore in June 2025, compared to Tk 9.93 lakh crore in June 2024.

Private sector deposits accounted for 83 percent of the total, of which household deposits alone constituted 55 percent, underscoring the dominance of individual savings.

Other private entities, including corporations and financial auxiliaries, contributed 28 percent, while the public sector held the remaining 17 percent.

Deposits between Tk 2 lakh and Tk 25 lakh increased to Tk 6.04 lakh crore from Tk 5.22 lakh crore. Meanwhile, small-value accounts of up to Tk 2 lakh rose from Tk 13.3 lakh crore to Tk 14.8 lakh crore.

The central bank noted that this expansion demonstrates both quantitative and qualitative growth, driven by retail and middle-tier savers.

“The data also reveal that deposits are heavily concentrated in small-value accounts, signifying broad-based financial inclusion,” BB said.

Shares of S Alam Cold Rolled Steels Limited surged 9.59% today (18 February) to close at Tk16 on the Dhaka Stock Exchange PLC (DSE), capping a sharp rally that has seen the stock gain 50% so far in February.

Since 1 February, the company's share price climbed from Tk10.7 to Tk16 as of today, despite ongoing operational and financial challenges. Yesterday (17 February) saw some 14.31 lakh shares traded, with a turnover of Tk2.23 crore.

The rally comes even after the DSE downgraded the company from "B" to "Z" category on 4 January 2026 under a directive of the Bangladesh Securities and Exchange Commission (BSEC). The downgrade followed the company's failure to hold its annual general meeting within the stipulated timeframe.

In line with another BSEC directive, stockbrokers and merchant bankers have been instructed to refrain from providing margin loan facilities to purchase the company's shares from the same date.

Company officials have attributed the non-holding annual general meeting due to the absence of its directors. They also reported operational disruptions due to raw material shortages, caused by difficulties in opening letters of credit as banks were uncooperative.

The firm, the only listed entity under the controversial S Alam Group, recently disclosed that its bank accounts have been frozen and that restrictions on opening LCs have severely hampered production.

Several banks, including Janata Bank and Islami Bank, have initiated processes to auction the company's assets to recover mounting defaulted loans.

Financial disclosures paint a challenging picture. For the first nine months of FY24, the company reported revenue of Tk388.82 crore, down 18% year-on-year, while profit plunged 56% to Tk2.50 crore.

In FY23, it posted a net profit of Tk4.78 crore and declared a 5% cash dividend.

However, the company has yet to publish its annual accounts for FY24 and FY25 and has also missed the deadline for releasing its first-quarter FY25 financial statements.

The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has urged the government to prioritise foreign direct investment (FDI)-friendly policies, backed by structural and regulatory reforms to strengthen investor confidence and ensure sustainable economic growth.

In a press release, the chamber said it stands ready to work closely with the government to improve the investment climate, attract quality foreign investment, support economic reforms, generate employment and reinforce the country’s economic foundations.

The chamber also congratulated the newly formed government following the swearing-in of the cabinet, including Prime Minister Tarique Rahman and other members of the parliament.

FICCI expressed hope that the new leadership’s vision for national progress would translate into timely and effective actions to accelerate economic growth and foster a favourable investment environment.

FICCI President Rupali Chowdhury said the new leadership had assumed office at a defining moment in the country’s history. “We wish the government every success in steering the country forward,” she said.

She emphasised the need to restore investor confidence, improve the ease of doing business, reduce operational costs, ensure policy predictability and pursue business-friendly reforms.

Highlighting the role of foreign direct investment, she said FDI remains critical for driving sustainable growth, creating jobs and enhancing Bangladesh’s global competitiveness.

Shares dipped and oil prices dropped back Tuesday as Tehran gave an encouraging response during talks with US officials in Geneva on Iran’s nuclear programme, after days of escalating rhetoric from President Donald Trump.

Oil prices had earlier risen after Trump ramped up threats towards Iran, a large crude producer, but Iranian Foreign Minister Abbas Araghchi “a new window of opportunity has opened”.

“We are hopeful that negotiation will lead to a sustainable and negotiated solution,” he said, though he said “Iran remains fully prepared to defend itself against any threat or act of aggression”.

West Texas Intermediate was down 0.2 percent at $62.75 per barrel after earlier jumping 1.5 percent, while international benchmark Brent North Sea Crude slipped 1.4 percent to $67.64. “There’s speculation that Iran could agree to dilute its most highly enriched uranium in exchange for the full lifting of financial sanctions, but it’s not clear if that will be enough to seal a deal between the two parties,” said Aarin Chiekrie, analyst at Hargreaves Lansdown.

Wall Street was off in early trading with the tech-heavy Nasdaq giving up one percent and the Dow sliding around 0.3 percent and the broader-based S&P 500 was off 0.2 percent.

“Insurance brokers, wealth advisors, real estate services, and logistics were all in the firing line last week, and investors are cautiously watching for what slice of the market could be next on the AI hit list,” Chiekrie added.

European stocks steadied in early afternoon deals after Tokyo closed lower, with Chinese markets again shut for the Lunar New Year.

In foreign exchange, the dollar rose against the British pound as official data showed UK unemployment rising to a five-year high.

Analysts said the reading of 5.2 percent for the final quarter of last year increased the likelihood of the Bank of England cutting its benchmark interest rate next month.

The greenback was also higher versus the euro but fell against the yen.

Europe’s biggest economy Germany is unlikely to rebound in 2026 as geopolitical uncertainty, high costs and weak domestic demand weigh on growth, the country’s Chamber of Industry and Commerce said Tuesday.

Germany returned to weak growth in 2025 after two years of recession.

The dollar held gains on Tuesday as markets awaited signals, expected later this week, about the potential timing of rate cuts by the Federal Reserve.

The yen trimmed losses from a day earlier when worse-than-expected Japanese economic data stirred expectations that the government would ramp up stimulus. The Aussie dollar edged lower after minutes from the Reserve Bank of Australia showed policymakers were in no rush to raise rates.

Trading was thin with many markets in Asia closed for the Lunar New Year holiday and following the President’s Day holiday in the US Key economic events lie later in the week, with minutes from the Fed’s last meeting and advance figures on US gross domestic product.

“We’re quite positive on the US economy,” said Kristina Clifton, senior currency strategist at Commonwealth Bank of Australia in Sydney. “The market is currently pricing a high chance of a June interest rate cut, which is also our view. However, we differ from the market in that we expect a follow-up cut in July.”

“We judge that the most important driver of the dollar through 2026 will be the narrative of US exceptionalism,” she added.

The dollar index , which measures the greenback against a basket of currencies, inched up to 97.12 after a 0.2 percent gain in the previous session. The euro slid 0.1 percent to $1.184.

The yen strengthened 0.3 percent to 153.04 per dollar. Sterling weakened 0.11 percent to $1.3607.

Data on Friday showed US consumer prices increased less than expected in January, giving the Fed additional leeway for policy easing this year. Money market traders are pricing about 59 basis points of easing for the rest of this year.

The Fed’s Open Market Committee issues minutes from its January meeting on Wednesday. Other key data points this week include inflation readings for Britain, Canada and Japan, as well as preliminary readings of global business activity on Friday.

A recent rally in the yen stalled on Monday when official figures showed Japan’s economy barely grew last quarter. Japan’s currency remains about 4 percent weaker against the dollar since fiscal dove Sanae Takaichi became prime minister last year.

Money flowing into Japan’s ebullient stock market along with expected rate hikes by the Bank of Japan are starting to turn the tide on yen weakness, said Bart Wakabayashi, the Tokyo branch manager at State Street.

“Investments continue to come into Japan and it’s looking good,” he said. “Real money investors have been reducing their overweight in dollar-yen, so buying the yen and selling the dollar.”

Exports from the Port of Los Angeles, the busiest US gateway for ocean trade, fell 8% in January to the lowest monthly output in nearly three years, Executive Director Gene Seroka said on Tuesday.

"Exports to China look dismal," Seroka said after the Port of Los Angeles handled 104,297 20-foot equivalent units (TEUs) of loaded export containers in January.

President Trump's aggressive use of tariffs has upended global trade and retaliatory trade duties from China and other nations have hit US exporters like farmers particularly hard.

Soybean shipments from the Port of Los Angeles to China dropped 80% last year, Seroka said, adding that the trade did not improve in November or December, following discussions between representatives of the two nations on the sidelines at the Asia-Pacific Economic Cooperation Summit.

"There's not much that the United States is exporting to China these days," said trade expert Chad Bown, a senior fellow at the Peterson Institute of Economics, who added that outgoing US shipments of everything from beef and corn to crude oil and coal also fell in 2025.

Closely watched imports to the Port of Los Angeles came in at 421,594 TEUs in January, down 13% from the unusually strong result the year earlier, Seroka said.

So far, imports in February appear relatively flat compared with a year earlier. Imports will slow in March due to China factory closures for the Lunar New Year holiday, he said.

Still, Seroka expects total first-quarter volume at the port to fall less than 10% versus the year-earlier quarter, when US importers were rushing in goods before President Donald Trump's threatened tariffs on countries like China took effect.

"I don't see the economy or cargo volume dropping off a cliff after that, and even though holiday sales were softer than we would have liked, I don't see a dire situation," Seroka said, referring to lackluster US December retail sales that signaled potential weakness in consumer spending that drives about 70% of the nation's total economic activity.

India’s Adani Group said Tuesday it plans to invest $100 billion by 2035 to develop “hyperscale AI-ready data centres”, a boost to New Delhi’s push to become a global artificial intelligence hub.

The announcement comes as India hosts a five-day global AI summit that will see deliberations over issues ranging from job disruption to child safety.

The summit will gather 20 national leaders and 45 ministerial-level delegations -- with the key day on Thursday -- who will rub shoulders with tech CEOs including Sam Altman of OpenAI and Google’s Sundar Pichai.

The $100 billion investment would catalyse an additional $150 billion in spending across “server manufacturing, advanced electrical infrastructure, sovereign cloud platforms and supporting industries”, the Adani Group said in a statement.

“Together, this is projected to create a $250 billion AI infrastructure ecosystem in India over the decade,” the statement noted.

The sprawling ports-to-power conglomerate said its vision is “anchored” by key partnerships with Google -- which aims to establish a massive data centre campus in the coastal city of Visakhapatnam -- and Microsoft.

“The Adani Group is also in discussion with other major players seeking to establish large scale campuses across India thereby further cementing its position as India’s premier AI infrastructure partner,” the statement added.

Last year India leapt to third place -- overtaking South Korea and Japan -- in an annual global ranking of AI competitiveness calculated by Stanford University researchers.

But despite plans for large-scale infrastructure and grand ambitions for innovation, experts say the country has a long way to go before it can rival the United States and China.

Power Grid Company of Bangladesh (PGCB), a state-owned power transmission company, is set to convert Tk1,324 crore in share money deposits received from the government for its development projects into preference shares.

In a letter dated today (17 February), the Bangladesh Securities and Exchange Commission (BSEC), the capital market regulator, approved the issuance of the shares in favour of the secretary of the Power Division under the Ministry of Power, Energy and Mineral Resources.

Under the government financing structure, 60% is treated as equity and the remainder as loans, with the equity portion recorded as deposits for shares. At the end of June 2025, PGCB's outstanding share money deposits stood at Tk2,954.81 crore.

Power Grid has already issued 20.10 crore general shares and 1,014.65 crore irredeemable and non-cumulative preference shares at Tk10 each in favour of the secretary of the Power Division.

According to company sources, Tk1,324 crore was received from the government in the 2023–24 fiscal year, and the company is now proceeding with the share issuance to comply with a notification issued by the Financial Reporting Council (FRC).

Preference shares are company shares where dividends are paid to shareholders before dividends are distributed to common stockholders. The government will receive dividends on the preference shares at a fixed rate before any dividend is declared or distributed to general shareholders.

The dividend rate for the government on the preference shares will be determined as a percentage of total capital, calculated as 25% of the assumed share of net profit after tax attributable to the preference shareholders.

Explaining the dividend mechanism to The Business Standard, Power Grid Company Secretary Md Jahangir Azad said, "Suppose preference shares account for 25% of the company's paid-up capital. If the company makes a profit of Tk100 in a financial year, the entitlement of the preference shares would be Tk25 from that profit. The government would then receive a 25% dividend on this Tk25 allocated to the preference shares."

Regarding the issuance of preference shares, he added, "We are instructed to convert share money deposits into shares within six months after the end of the fiscal year. That is why we are gradually converting share money deposits into preference shares."

In the first half of the current fiscal year, Power Grid's revenue grew by 9% to Tk1,671 crore, and profit soared 236% to Tk476 crore.

Its shares closed at Tk33.70 each yesterday, down 2.03% from the previous trading session.

Amir Khasru Mahmud Chowdhury, who is set to take charge as the finance and planning minister of the BNP-led new government, has set boosting investment and employment as his top priority, saying the government will focus on simplifying the business climate and lowering the cost of doing business to stimulate economic activity.

In a short interview with The Business Standard shortly after taking oath in the government led by Tarique Rahman, Khasru said effective measures would be taken to curb corruption and extortion, which he identified as barriers to growth.

He said deregulation would be introduced to ease bureaucratic complexity and reduce business costs.

High bank lending rates and elevated gas and electricity charges are discouraging private-sector investment and limiting job creation, he added.

"Lowering lending rates to a tolerable level, removing bureaucratic hurdles and improving ease of doing business will be central policy priorities," the minister said.

Amir Khasru described the broader economic landscape as challenging, citing Bangladesh's declining tax-to-GDP ratio, weaknesses in the banking and financial sectors, and a struggling capital market.

"Although inflation has eased slightly, it remains high, while private-sector credit growth has slowed sharply, investment and job creation remain weak, capital machinery imports have fallen, and poverty is rising.

"To overcome this situation, we will have to take major and difficult decisions," he said, adding that stricter reforms will be needed compared with previous administrations.

Reducing the cost of doing business to encourage investment and employment will be pursued at any cost, alongside efforts to raise the tax-to-GDP ratio through economic expansion, he said.

The minister added that as the finance minister, he will undertake a comprehensive review of the economy to determine its current condition, after which the government will outline a roadmap defining its economic direction.

Iqbal Hasan Mahmud Tuku, set to become the minister for Power, Energy and Mineral Resources, expressed confidence in addressing Bangladesh's long-standing energy challenges, drawing on his previous experience leading the ministry.

Speaking shortly after taking the oath, the Sirajganj-2 MP acknowledged the sector's complexity. "There are lots of problems in our power and energy sector. It is a technical matter. I need lots of brainstorming to identify the problems," he said. Emphasising careful preparation, Iqbal Hasan added, "It is very difficult to solve, but we will do homework to address the issues. Since I ran the ministry before, I am confident to streamline the problems."

Looking ahead, he expressed hope for actionable plans. "Hopefully, I will be able to create some packages of work to solve the problems," he said. On the National Review Committee's recommendation to cancel the Adani Group power purchase agreement, Iqbal Hasan remained measured: "I need to do homework. We need to do lots of brainstorming." The committee had highlighted serious anomalies and warned that the deal could be financially burdensome for Bangladesh.

Iqbal Hasan is scheduled to brief journalists at the secretariat soon, where he is expected to outline the current state of the sector and his approach to tackling persistent issues, including rising outstanding bills and an energy shortfall affecting economic growth.

Earlier, at a 3 February seminar, Iqbal Hasan highlighted the challenge of balancing production costs with affordable consumer prices. "Balancing production costs with affordable prices for consumers requires deep thought and a long time, which is not possible in a five-year tenure," he said.

He recalled a previous framework where 65% of power generation remained under government control, with the rest developed through public-private partnerships. "This policy allowed the state to maintain leverage over prices," he noted.

Criticising deviations from this approach, Iqbal Hasan said one-on-one deals bypassing public procurement rules had fueled corruption and rent-seeking. "For years, development was treated as an end in itself. Now ordinary people are paying the hidden costs through higher electricity bills and mounting public debt," he added.

Our business community is facing mountain-sized challenges right now. In this situation, the first priority must be improving the law and order situation – especially curbing extortion.

Those appointed to the ministries will need to be held accountable for what they plan to do in the first 90 days and what they will do afterwards. We don't want to see five years pass with everyone just sitting idle.

The selections made for the cabinet seem appropriate. Now, the real test is how much they can deliver. The government will have to take many policies, and it will be important to see how supportive the officials and opposition parties are in implementing them.

There are immense challenges in the economy. Investor confidence, especially in terms of investment, is almost nonexistent. But we are also seeing potential. Amid this, the government will need to manage challenges, including opposition movements. Whenever a situation arises, officials will try to seize the opportunity.

Bangladesh's total foreign exchange reserves have risen to $29.86 billion, Bangladesh Bank (BB) Spokesperson and Executive Director Arif Hossain Khan said this evening (17 February).

The central bank has been increasing reserves mainly by purchasing US dollars from commercial banks through auctions.

The rise in remittance inflows through formal banking channels has contributed significantly to this growth.

In the first month of 2026, Bangladesh received $3.17 billion in remittances, the third-highest monthly inflow on record. This marks a 45.41% increase compared to the same month in 2025.

In January of the previous year, remittance inflows stood at $2.18 billion.

A senior Bangladesh Bank official told The Business Standard that the supply of dollars in banks has increased due to higher remittance inflows.

To prevent the dollar rate from falling, the central bank has been purchasing dollars through auctions, he added.

The official further said that by buying dollars from commercial banks, Bangladesh Bank is simultaneously boosting reserves while maintaining stability in the exchange rate.

Bangladesh’s information technology (IT) exports grew 13.54 percent in the first five months of fiscal year 2025-26, buoyed by accelerating global artificial intelligence (AI) adoption and the widening digitalisation of services, according to government data.

Between July and November, the sector’s exports reached $269.84 million, up from $237.67 million in the same period a year earlier, shows Export Promotion Bureau (EPB) data. IT service exports stood at nearly $629 million in fiscal year 2024-25.

The gains were broad-based across the sector, which encompasses software development, IT-enabled services, computer consultancy, and hardware support, though the composition of growth reveals a market in transition.

SOFTWARE GETS BOOST, CONSULTANCY STUMBLES

Installation and hardware support posted the sharpest growth, nearly tripling to $3.09 million, a 136 percent year-on-year jump, reflecting rising demand for physical infrastructure alongside digital transformation.

Software exports also surged strongly, climbing 54 percent to $21.39 million, as global clients ramped up demand for custom solutions, automation tools and AI-integrated applications.

IT-enabled services, including business process outsourcing, expanded more steadily, rising 16.74 percent to $235.72 million.

Computer consultancy, however, contracted sharply, falling 53.9 percent to $9.64 million, suggesting clients increasingly prefer bundled service packages over standalone advisory engagements.

According to industry executives, AI is simultaneously expanding the market and compressing the workforce needed to serve it.

Ferdous Mahmud Shaon, managing director (MD) of Cefalo, a Dhaka-based software firm with around 300 employees, said his company has seen a substantial rise in orders as businesses worldwide race to embed AI into their operations.

“AI is not replacing software, it is actually increasing the need for new types of software,” Shaon said. “Many processes still require customised solutions, integration and ongoing development.”

At the same time, productivity gains are reshaping how companies hire. The Cefalo MD noted that AI tools are enabling companies to produce software faster and at lower cost.

“Previously a task might require ten engineers; now five can deliver the same output using AI tools,” Shaon said.

Cefalo has invested heavily in AI-assisted development tools, enabling teams to complete projects 25-50 percent faster.

While this improves competitiveness and delivery speed, it also creates pressure on employment, leading to downsizing in some cases, a trend visible across global tech companies as well.

“Companies must adopt these technologies or risk being pushed out of the market,” Shaon said, noting that AI is reducing routine work. “In the future, we will need to focus on more complex and sophisticated tasks that machines cannot easily handle.”

He also cautioned that the growth trajectory may remain moderate in the short term due to broader global uncertainties.

Despite the solid headline figure, Shaon flagged three structural risks to sustained growth: the global economic slowdown dampening client budgets, domestic instability undermining Bangladesh’s appeal as an outsourcing destination, and AI-driven workforce disruption requiring rapid reskilling.

The government has partially reduced value-added tax (VAT) on liquefied petroleum (LP) gas, aiming to stabilise prices of the essential fuel used in households and industry while keeping it affordable for consumers.

In a notification issued yesterday (17 February), the National Board of Revenue (NBR) has now scrapped VAT at the production and trader stages as well as the advance tax at import, replacing them with a single 7.5% VAT levied only at the import stage.

Under the previous system, LP gas faced 7.5% VAT at both the production and trader levels, alongside a 2% advance tax at the import stage.

The tax authority said the measure — effective until 30 June — was taken in the public interest to help stabilise LP gas prices and maintain them within consumers' purchasing capacity.

The notice stated that the government has decided, in the public interest, to partially reduce VAT on LP gas to stabilise the market price of this essential product used in industry and households and keep it within consumers' purchasing capacity.

The decision followed an application from the LPG Operators Association of Bangladesh and recommendations from the Ministry of Power Energy and Mineral Resources.

According to the NBR, the revised structure will reduce the overall VAT burden on consumers by around 20% compared with the previous system. Industry entrepreneurs say the change could translate into a modest drop in market prices.

Speaking on condition of anonymity, the chief financial officer of a leading LP gas supplier said a 12kg cylinder currently priced at Tk1,206 could fall by about Tk15 due to the VAT restructuring.

Officials maintain the tax adjustment will not hurt government revenue. An NBR official explained that compliance gaps in the LP gas supply chain had allowed some operators to evade VAT, particularly because advance tax at import was rebateable.

By shifting VAT collection to the import stage, authorities expect to reduce evasion — potentially maintaining or even increasing revenue collections.

The government’s development expenditure in the first seven months of the current fiscal year 2025-26 (FY26) has slumped to its lowest level in at least 16 years amid fiscal restraints and political disruptions.

Ministries and divisions spent just Tk 50,556 crore – a mere 21.18 percent of the total Annual Development Programme (ADP) outlay – during the period, shows Implementation Monitoring and Evaluation Division (IMED) data published yesterday.

During the same period in FY25, when operations were disrupted by a mass uprising and administrative instability, the ADP implementation rate stood at 21.52 percent. The rates were 27.11 percent and 28.16 percent in FY24 and FY23, respectively.

The slowdown is particularly acute in the health sector, which has recorded dismal implementation rates despite growing concerns about healthcare accessibility.

The Medical Education and Family Welfare Division has utilised only 2.98 percent of its allocation, while the Health Services Division has managed just 6.59 percent, according to the IMED.

Md Deen Islam, research director at Research and Policy Integration for Development (RAPID), blamed lackings in “institutional capacity” for the slow spending.

“The underperformance in the health sector reflects deeper governance challenges. In many cases, those in charge hesitate to take bold decisions, particularly when procurement-related scrutiny creates a climate of fear. That affects implementation,” he added.

The underperformance comes as Bangladesh continues to grapple with one of the world’s highest rates of out-of-pocket health expenditure.

This has led to a “structural vulnerability that demands urgent policy attention,” Islam said.

“A single chronic or terminal illness can push a non-poor family into poverty,” he warned, citing data from the Multiple Indicator Cluster Survey showing stagnation in key health indicators.

He emphasised that without immediate increases in health investment and execution, Bangladesh risks falling further behind on crucial development metrics.

The broader spending slump reflects multiple headwinds. For the current fiscal year, the government allocated Tk 238,695 crore for the ADP, including funds from autonomous bodies.

However, during the July-January period, utilisation of both state funds and foreign loans has declined sharply.

Foreign fund spending fell to approximately Tk 18,668 crore, while government funds amounted to Tk 28,052 crore, down from Tk 30,096 crore in FY25.

This deceleration comes as the interim government implemented a reduced, austerity-focused ADP that slowed or postponed certain projects initiated by the previous administration.

Planning ministry officials note that several contractors fled the country before completing their work following the mid-2024 political changeover, further hampering implementation.

RAPID’s Islam largely agreed, noting that smaller projects may have received less attention as larger initiatives were prioritised.

Infrastructure sectors have fared considerably better than social services.

Among the top 15 recipients of allocations, the Ministry of Water Resources achieved the highest implementation rate at 41.10 percent, followed by the Energy and Mineral Resources Division with 40.66 percent, and the Local Government Division with 36.91 percent.

For Islam, the health shortfall is particularly worrying given Bangladesh’s demographic outlook.

He warned, “Within 15 to 20 years, Bangladesh will gradually transition into an ageing society. Without adequate investment in health infrastructure and human resources, fiscal pressure will intensify.”

He urged authorities to view health spending through an economic lens, noting that Bangladesh maintains a low ratio of nurses and support staff compared to doctors.

“Expanding this workforce would improve service delivery while generating jobs. Health investment is not just social spending, it is also an economic strategy,” he said.

However, Islam said ADP implementation may accelerate under the newly elected political government.

A modest uptick in January offered limited encouragement. The month recorded 3.64 percent implementation of the revised ADP, marginally up from 3.55 percent in January 2024.

“As an elected party, the BNP will have to deliver on its pledges, including job creation, expanding health services, and reducing out-of-pocket costs,” Islam said.

Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh, concurred that a full-fledged political government could help strengthen ADP spending by accelerating countrywide development activities.

The reciprocal trade deal signed by the interim government with the United States has raised questions regarding the economic sovereignty of Bangladesh, especially in decisions on trade, energy and security.

Critics point to several binding and conditional clauses that allow Washington to terminate the agreement and restore steep tariffs if its concerns are not addressed.

For example, take the digital trade facilitation provision in the deal.

The agreement says that if Bangladesh signs a new digital trade deal with any country that jeopardises essential US interests, Washington may terminate the pact and reimpose the 37 percent reciprocal tariff on Bangladeshi exports.

That was the tariff rate the US had proposed in April 2025.

The same condition applies if Bangladesh enters into a new bilateral free trade or preferential agreement with what the US terms “a non-market country” -- nations it does not recognise as market economies.

The agreement says that if consultations with Bangladesh fail to resolve American concerns, the United States may withdraw from the deal and reinstate the 37 percent tariff.

The rate is high enough to sharply reduce Bangladesh’s exports to the US, a costly prospect given that the country earns roughly one-fifth of its export revenue from garments and other goods sold to American buyers.

The deal, signed on February 9 between the interim government and the Trump administration, also restricts Bangladesh from purchasing “any nuclear reactors, fuel rods, or enriched uranium from a country that jeopardises essential US interests”.

An exception applies to “the procurement of proprietary materials for which there are no alternative suppliers or technologies, or materials contracted prior to the entry into force of this agreement required for existing reactors”.

This suggests that supplies for the Rooppur Nuclear Power Plant, built with Russian technical and financial support through Russian state corporation Rosatom, may continue.

But any future nuclear project could fall under tighter scrutiny.

Citing the section on economic and national security, BRAC Executive Director Asif Saleh, in a Facebook post, said, “This is the most important and controversial part of the agreement, as it raises questions about ‘sovereignty’.”

The section adds, “The United States shall work with Bangladesh to streamline and enhance defence trade.”

On the nuclear restriction, Saleh said, “This could create risks for Bangladesh’s energy security.”

The deal also opens the door for US direct investment to “explore, mine, extract, refine, process, transport, distribute and export critical mineral resources”.

In addition, Bangladesh is required to purchase $3.5 billion worth of American agricultural products. This includes at least 700,000 tonnes of wheat annually for five years, at least $1.25 billion or 2.6 million tonnes of soy and soy products, and cotton.

Bangladesh shall also need to buy 14 Boeing aircraft initially and $15 billion worth of liquefied natural gas (LNG) over 15 years, apart from increased purchases of US military equipment and limits on defence equipment purchases from certain countries.

“It appears more like an imposed purchasing obligation than free trade,” said Saleh. “Regardless of Bangladesh’s actual needs or capacity, it effectively ensures profits for US companies.”

Mustafizur Rahman, distinguished fellow at local think tank Centre for Policy Dialogue (CPD), said bulk commodities in Bangladesh are usually imported by private sector businesses, not the government.

If traders can source goods more cheaply elsewhere, he asked, why would they buy from the United States?

In that case, Rahman said the government may have to offer incentives to persuade private importers to purchase American products, adding to fiscal pressure.

In an interview with The Daily Star last week, Professor Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), said that Bangladesh could be compelled to buy more expensive goods even when cheaper alternatives are available.

“If we find a cheaper source elsewhere, we may not be able to choose it,” he said. “This will put additional pressure on our foreign exchange.”

“How are we going to finance aircraft purchases and energy imports? There is a risk of increased reliance on foreign loans,” Raihan said.

Anwar-ul Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries, said the agreement indicates that Bangladesh should reduce its dependence on China for raw materials.

The deal also contains a provision on Rules of Origin. It says that if the benefits of the agreement accrue substantially to third countries or their nationals, either party may establish Rules of Origin to reflect the intention of the agreement.

Parvez said the third country clause should have been defined more clearly.

The agreement has not been made public, with officials citing a non-disclosure provision. Amid growing concern, the Chief Adviser’s Office said in a statement that it had inserted “an exit clause” into the deal.

“There was no scope for any country to terminate the agreement,” it added. The statement did not clarify whether Bangladesh exports would again face a 37 percent tariff, up from 19 percent, if the agreement were terminated.

A total of 2,100 metric tonnes of non-basmati coarse rice have been imported through Benapole port over six working days.

The consignments, brought in through 15 separate shipments, entered the port's 31 No transhipment yard, Port Director Shamim Hossain said today (17 February).

According to port sources, the imports took place between 27 January and 17 February. Earlier, 6,128 metric tonnes of rice were imported through the port during the four months from August to November last year.

On 18 January, the government allowed 232 importing firms to bring in 2,00,000 metric tonnes of rice, setting 3 March as the deadline for completing the imports and marketing the grain in Bangladesh.

The importing firm Haji Musa Karim & Sons brought the rice from India, while C&F agent M/s Bhuiya Enterprise is handling the clearance process.

Abdus Samad, proprietor of Haji Musa Karim & Sons, said the firm imported the 2,100 metric tonnes of coarse rice from India in 58 trucks over six days. The import cost up to Benapole port stood at Tk50 per kg, and the rice is expected to be sold in the open market at Tk51 per kg, he added.

Port Director Shamim Hossain said officials concerned have been instructed to ensure the quick release of the imported consignments from the port.

Two listed general insurers, Crystal Insurance Company Limited and Sena Insurance PLC, have declared cash dividends for the year ended 31 December 2025, alongside mixed investor reactions despite stronger earnings.

Crystal Insurance's board of directors has recommended a 12% cash dividend, after reporting higher profitability.

The company reported earnings per share (EPS) of Tk3.34, net asset value (NAV) per share of Tk27.65 and net operating cash flow per share (NOCFPS) of Tk1.74 for the year ended 31 December 2025.

In comparison, it posted EPS of Tk3.13, NAV per share of Tk25.67 and NOCFPS of Tk2.20 for 2024.

Its annual general meeting is scheduled for 30 March at 11:00am via a digital platform, with 9 March fixed as the record date.

Following the dividend declaration at the Dhaka Stock Exchange (DSE), Crystal Insurance's share price fell 4.58% today (17 February) to close at Tk81.20, reflecting investor reaction despite improved earnings performance.

Meanwhile, Sena Insurance has recommended a 15% cash dividend for 2025. The insurer reported EPS of Tk5.17, NAV per share of Tk28.58 and NOCFPS of Tk5.00 for the year, compared to EPS of Tk4.29, NAV per share of Tk25.16 and NOCFPS of Tk7.23 in the previous year.

The company will hold its AGM on 31 March at 11:30am under a hybrid system, allowing both physical presence and participation through a digital platform. The record date has also been set for 9 March.

In a separate disclosure, Sena Insurance said its board has decided to purchase 11.31 decimals of land in Narayanganj' Rupganj upazila for Tk1.28 crore, excluding registration and other fees, subject to approval from the Insurance Development and Regulatory Authority (Idra).

After the announcements, Sena Insurance's share price declined 3.13% to Tk58.90.