Bangladesh’s economy grew 3.49 percent in the fiscal year 2024-25 (FY25), the slowest expansion in at least three years, owing to weaker performances in the agriculture and services sectors.

The growth is lower than the provisional estimate of 3.97 percent made previously by Bangladesh Bureau of Statistics (BBS), which released the finalised data on gross domestic product (GDP) yesterday.

In FY24, the economy grew 4.22 percent, said the national statistical office.

The data shows that only the industrial sector posted faster growth in FY25 than in the prior year.

Between July 2024 and June 2025, the country’s factory output rose 3.71 percent, up 0.20 percentage points from FY24.

Agriculture, the second-largest employing sector, grew just 2.42 percent, down from 3.30 percent a year earlier.

Services, the biggest contributor to GDP, expanded 4.35 percent, easing from 5.09 percent in FY24.

The size of the economy reached $456 billion, up from $450 billion a year earlier. Per capita income edged up to $2,769 from $2,738.

Sluggish growth is expected to continue into the current fiscal year. The International Monetary Fund projects 4.7 percent expansion in FY26, the World Bank 4.6 percent, and the Asian Development Bank (ADB) 4.7 percent -- all below Bangladesh’s pre-pandemic trend.

The ADB trimmed its projection from 5 percent in September, citing weak investment ahead of the general election and slower export growth.

Economists said the FY25 slowdown is owed to a combination of deep-rooted internal weaknesses and persistent external shocks.

“This is certainly due to both internal and external factors,” said Prof Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem). “One of the biggest reasons was the political transition. Because of that, and the related developments in the banking sector, business confidence dropped sharply.”

He noted that the erosion of confidence discouraged fresh investment while banks turned cautious on lending. “Credit growth declined considerably. Altogether, this reflects a downward shift in investment.”

Exports also underperformed, even weakened, he said. “Only remittances have performed somewhat consistently.”

Describing the macroeconomic picture as unusual, the Sanem executive director noted, “The economy is depressed, while inflation remains high.”

High inflation has eroded purchasing power, weakening consumer demand across all components of GDP – household consumption, public spending, investment and exports, he explained.

Although a new government has taken office, Raihan warned that FY26 may follow a similar pattern and that recent turbulence at the Bangladesh Bank could further dampen investor sentiment. “I do not expect a major surge in investment at this moment.”

The economist noted that public spending has remained subdued.

“February has already ended, and only about four months remain in the fiscal year. It is unlikely that public spending will pick up significantly within this period,” Raihan said.

“Even if investor confidence begins to return, it will take time for that to be reflected in actual economic indicators,” he added.

Md Deen Islam, a professor of economics at the University of Dhaka, said businesses and investors may delay commitments until they see how policy priorities evolve.

Such caution, he warned, could weigh on short-term activity. “That can slow economic activity in the short run, even if the government implements sound policies.”

He stressed that clarity and stability will be critical going forward.

“To support stronger growth, policy clarity, macroeconomic stability, and investor confidence will be essential. This means steady fiscal management, predictable regulatory frameworks, and efforts to improve credit flow and export performance,” he said.

“If these areas are strengthened, growth could accelerate in the medium term. Conversely, if uncertainty persists, growth may remain subdued despite changes in political leadership,” he added.

To revive growth, Islam stressed the need to restore macroeconomic stability and rebuild investor confidence.

There are tentative signs of a pickup. The economy expanded 4.5 percent in the first quarter of FY26, up sharply from 2.58 percent in the same period a year earlier, driven mainly by industrial and agricultural activity.

Bangladesh’s foreign debt servicing crossed the amount of loans it received from international lenders in the first seven months of the ongoing fiscal year (FY) 2025-26 amid the slow pace of foreign-funded projects executed under the Annual Development Programme (ADP).

The country repaid $2.67 billion in the first seven months of the current fiscal year, according to data released by the Economic Relations Division (ERD) of the finance ministry.

Meanwhile, foreign loan disbursement dipped 33 percent year on year to $2.4 billion during July-January of this fiscal year, which an economist said is a warning sign.

“The fact that debt servicing has exceeded fresh foreign loan inflows is a warning sign,” said Ashikur Rahman, principal economist at the Policy Research Institute (PRI) of Bangladesh.

“It indicates that Bangladesh is now transferring more resources outward than it is receiving, which tightens both fiscal and external liquidity conditions,” he said.

“This reflects not only maturing debt obligations but also weak project implementation, slower disbursements, and limited export dynamism. While it is not yet a crisis, it reduces policy space and highlights the urgency of strengthening revenue mobilisation, export competitiveness, and a prudent external borrowing strategy.”

Data by the Implementation Monitoring and Evaluation Division under the Ministry of Planning showed that in the July-January period of this fiscal year, the implementation of foreign-funded ADP was 36 percent, marginally higher than in the same period a year ago.

During this period, commitment by foreign lenders, namely the World Bank and the Asian Development Bank, as well as Russia, China, Japan, and India, declined 3 percent year on year to $2.27 billion.

The decline in both commitment and disbursement against a spike in the repayment of foreign loans comes at a time when revenue collection has continued to fall short of the target, and government borrowing from the banking system has risen.

Tax collection by the National Board of Revenue, the main generator of revenue for the state, increased 13 percent in the July-January period of this FY from a year ago. However, the NBR missed its target by 27 percent, a shortfall of Tk 60,110 crore, for the period, according to provisional data.

During the period, the government’s net borrowing from the banking sector crossed Tk 48,800 crore, nearly five times the Tk 10,558 crore it borrowed in the same period a year earlier, according to Bangladesh Bank’s provisional data.

“The borrowing for debt repayment increased significantly,” said Towfiqul Islam Khan, additional director (Research) at the Centre for Policy Dialogue (CPD), in a paper on macroeconomic benchmarks for the new government presented at a briefing of Citizen’s Platform for SDGs.

He said the government’s fiscal space -- the ability to provide resources for a desired purpose without jeopardising the sustainability of its financial position or the stability of the economy, and the ability to spend for unforeseen events -- is diminishing.

Bangladesh’s foreign debt repayment has been increasing for the last several years. It paid $7 billion to multilateral and bilateral lenders in FY25, up from $6 billion a year ago.

Rahman said structural economic reforms are no longer optional.

“Enhancing Bangladesh’s international competitiveness, diversifying exports, improving the investment climate, and mobilising domestic resources more effectively are fundamental to building a stable and resilient economic architecture,” he said.

“Without these reforms, external vulnerabilities will continue to resurface, constraining growth and macroeconomic stability.”

Government authorities prepare to compensate the small investors in the five distressed private banks merged into Sammilito Islami Bank late last year, officials say.

Instructed by the high-ups of the new government, the Financial Institutions Division (FID) is now calculating how much money needed to compensate the investors who bought shares of the five banks from the stock market, they add.

Officials at the FID have prepared a preliminary list of the small investors who have been affected by the merger of the five banks, which had been extensively looted allegedly during the Awami League regime.

The mode of payment, whether the small investors will be compensated on the prices of shares on the last trading day or at face value, however, is yet to be finalised.

The FID will soon place the matter to Finance and Planning Minister Amir Khosru Mahmud Chowdhury for a decision and take further approval from the top of the government for securing funds to disburse the compensations.

A senior FID official has told The Financial Express they earlier placed the matter to then finance adviser Dr Salehuddin Ahmed, but he left office before giving a final decision.

The official also says soon after assuming office, the new finance and planning minister expressed interest in settling the issue shortly.

In this regard, he asked FID officials to submit a proposal detailing the number of shareholders eligible for compensation and the amount of money to be needed for the payoff.

"We will place the proposal to the minister soon as our paperwork is almost completed," says the official.

A Finance Division official familiar with the developments has told The Financial Express the finance minister is of the opinion that the share value of a company cannot be zero in any way.

He says the finance minister is convinced that the small investors who bought shares of the banks from the stock market had no role in the board of directors and management of the board, and thus, they had no responsibility for the deterioration in the financial health of the banks.

The official says the small investors bought the shares of the banks based on the financial statements, which showed the banks were making profit.

Thus, these small investors are eligible for compensation as the government itself has taken over the banks, the official says, noting that the matter of compensation may be finalised next week.

In November last year, the government formed Sammilito Islami Bank by merging five financially distressed Islamic banks under the Bank Resolution Ordinance 2025.

The five banks are First Security Islami Bank, Social Islami Bank, Global Islami Bank, Union Bank, and EXIM Bank.

The government allocated some Tk 200 billion as capital in favour of Sammilito Islami Bank from the exchequer.

Moreover, the central bank has released some Tk 120 billion from the deposit-insurance trust fund, from where each depositor is given Tk 0.2 million as compensation.

However, the small investors have yet to be given any compensation as then Bangladesh Bank governor Dr Ahsan H Mansur declared the share prices of the merged banks as zero and the stock-market regulator stopped the trading in the shares on the bourses.

Bangladesh's economy is expected to grow by 4.5 per cent this fiscal year, a little below earlier projections by Oxford Economics, as it believes the second-quarter growth ending December slowed alongside poor export growth in key markets.

However, the growth in fiscal year 2025-26 picks up above 3.49-percent mark determined for the past fiscal year by final official count.

Founded in 1981, Oxford Economics is a global economic advisory firm providing forecasting and analytical services covering more than 200 countries and a wide range of industries and cities.

"We've downgraded our GDP-growth forecast for Bangladesh to 4.5 per cent in FY2025-26 from 4.7 per cent previously," it said Thursday.

The agency predicts activity should continue to recover in FY2026-27, albeit at a relatively moderate pace of 5.7 per cent year on year.

Following a slowdown in FY2024-25, economic momentum improved temporarily in the third quarter of 2025, supported by stronger activity in manufacturing and construction.

However, it says trade data indicate a renewed loss of momentum in the fourth quarter ending December, with goods exports to the United States and Germany falling by 4.1 per cent and 12.8 per cent year on year, respectively.

Inflation remained stubbornly high, with price pressures intensifying since October despite the fact the central bank has been pursuing a tight monetary stance.

Consumer prices rose 8.6 per cent year on year in January.

"Although wage growth remained broadly stable at around 8.0 per cent, stronger remittance inflows provided some support to household incomes."

The Oxford Economics says February's general election, which delivered a decisive victory for the Bangladesh Nationalist Party (BNP), along with the passage of a constitutional reform referendum, could support business confidence.

The firm expects the new administration to maintain its reform agenda through continued engagement with the International Monetary Fund.

"A peaceful transition of power and policy continuity are expected to provide near-term support to economic sentiment," says Oxford Economics report.

However, the outlook for consumer spending remains uneven as wage increases continue to lag behind inflation, eroding real incomes.

Private investment is also likely to remain constrained by restrictive monetary policy.

Bangladesh Bank has kept policy rates unchanged, maintaining a tight stance aimed at containing inflation and rebuilding foreign-exchange reserves.

The restrictive policy environment has helped stabilise reserves, which have risen to about $30 billion, from roughly $17 billion in 2024, marking progress under the IMF-supported reform programme.

The central bank has indicated that inflation needs to fall below 7.0 per cent before policy easing can be considered.

External risks remain significant.

While lower US tariffs could support exports in the near term, the gradual erosion of trade preferences associated with Bangladesh's graduation from least-developed-country status poses a challenge to medium-term export prospects.

Some export orders may be front-loaded ahead of the transition.

Meanwhile, the country's economy expanded by 3.49 per cent in fiscal year 2024-25, as tight monetary policy and restrained government spending weighed on activity, while inflationary pressures remained elevated, says Bangladesh Bureau of Statistics (BBS).

According to final estimates released Thursday by the statistical bureau, gross domestic product (GDP ) reached US$456 billion, with growth slowing from 4.22 per cent in FY2023-24 and falling short of the provisional estimate of 3.97 per cent.

The weak performance followed an unprecedented mass uprising in July-August 2024 that disrupted economic activity and forced the temporary closure of many factories during the fiscal year.

Sluggish consumer demand and subdued private investment also damped growth, reflecting persistently high inflation and prolonged political uncertainty during the period under review.

"The disappointing end to the year largely reflected a self-inflicted drag from consumption and investment following higher inflation and political uncertainty," says Dr Zahid Hussain, an independent economist, about the deceleration reasons.

He adds that the contraction in public spending is expected to reverse by FY2027 as political uncertainty has been eased following polls just held this month.

The slowdown in output occurred alongside continued price pressures.

External projections had been more optimistic.

Global agency S&P Global Ratings forecast growth of 3.97 per cent for the year, while Moody's had projected around 4.5 per cent before revising its outlook downward.

Sectoral data show uneven performance across the economy.

Agricultural output expanded by 2.82 per cent, up 0.63-percentage points from a year earlier.

Industrial growth slowed to 3.35 per cent, down 0.63-percentage points, while the services sector contracted by 4.35 per cent, 0.16-percentage points lower than in the previous year.

Expenditure-based measures indicate weakening macroeconomic fundamentals.

The three main components of GDP -- investment, domestic savings and national savings -- all declined compared to the previous fiscal year.

Total investment fell to 28.54 per cent of GDP, from 30.70 per cent a year earlier.

Domestic savings declined to 21.98 per cent, from 23.96 per cent, while national savings, which include remittance income, dropped to 27.67 per cent from 28.42 per cent despite the fact that after the August 05, 2024 uprising the remittances were robust.

Per-capita income under the final estimate stood at $2,769, reflecting the slower pace of economic expansion.

The country's private sector credit growth plummeted to an all-time low of 6.03% in January, as prolonged political instability and a high-interest-rate regime forced businesses to stall expansion plans and led banks to adopt a highly cautious lending stance.

According to the latest data from the Bangladesh Bank, credit growth edged down from 6.1% in December, continuing a sharp decline from the 10.13% recorded in July 2024.

Although a brief spike to 6.58% occurred in November, analysts attribute this to loan restructuring ahead of the 12 February national election rather than genuine new investment in productive sectors.

In its monetary policy statement for January-June 2026, the central bank attributed the slowdown to tight monetary conditions, rising government borrowing to finance the budget deficit and subdued demand for loans amid continued uncertainty surrounding new investment decisions.

The decline has been steady over recent months, with growth recorded at 6.29% in September, 6.35% in August, 6.52% in July, 6.40% in June, 7.17% in May and 7.5% in April. In contrast, private sector credit growth stood at 10.13% in July 2024 before falling sharply following the political transition in August that year.

Economists say prolonged political uncertainty, weak business confidence and structural weaknesses in banks have discouraged investment, prompting many businesses to postpone expansion plans despite the BNP securing a landslide victory in the February election.

Newly appointed central bank Governor Md Mostaqur Rahman has indicated that policy support will be introduced to revive private sector lending and restore economic momentum.

On his first day in office, he said lending rates would be gradually reduced to encourage investment and that reopening closed factories and business establishments would be essential to revitalise economic activity – signalling a possible shift away from the prolonged contractionary monetary stance.

Bankers, however, say high borrowing costs are only part of the challenge. Syed Mahbubur Rahman, managing director of Mutual Trust Bank, told TBS that banks are currently extending loans at even around 11% interest while paying similar rates on deposits, leaving minimal margins.

He noted that although high lending rates remain a constraint, investors prioritise reliable infrastructure – including gas, electricity and port facilities – before financing considerations.

Persistent energy shortages and infrastructure bottlenecks, he said, have prevented both existing businesses from expanding and new investors from entering the market.

A major factor behind the credit slowdown has been increased government borrowing from banks. During July-December of the 2025-26 fiscal year, net credit to the government reached Tk50,782 crore, equivalent to 43% of the revised annual target of Tk1.18 lakh crore.

Net government borrowing from the banking system rose 32.8% by December 2025, effectively crowding out private borrowers in an already tight liquidity environment.

Banks are simultaneously struggling with soaring non-performing loans, which climbed to a record Tk6.44 lakh crore at the end of September 2025 – roughly one-third of total outstanding loans.

Elevated default levels have weakened bank capital positions, increased provisioning requirements and made lenders more cautious in approving new credit.

Liquidity pressures and slow deposit growth have further constrained lending capacity. In an effort to curb inflation, the central bank earlier raised its policy rate to 10%, pushing commercial lending rates close to 15% and discouraging businesses, particularly small and medium-sized enterprises, from taking fresh loans.

The effects of weak credit expansion are increasingly visible across the economy. Imports of capital machinery have declined, signalling slower industrial growth, while reduced investment has dampened money circulation. Many factories are operating below capacity, consumer demand remains subdued and private sector job creation has slowed.

The central bank had set a target of 9.8% private sector credit growth for July-December 2025, but actual performance fell significantly short.

Experts warned that if lending growth fails to recover, industrial output could weaken further, private investment may remain stagnant and employment recovery could face prolonged delays.

Escalating hostilities involving Iran, the United States and Israel have triggered fresh concerns over Bangladesh's energy security, with economists and business leaders warning of potential fuel supply disruptions and sharp spikes in global energy prices.

Analysts said the latest US strikes on Iranian targets and Tehran's retaliatory attacks on American military bases across the Middle East could disrupt shipments of crude oil and liquefied natural gas (LNG) from Bangladesh's principal suppliers — Saudi Arabia, the United Arab Emirates and Qatar.

If the confrontation escalates or becomes prolonged, they cautioned, the economic fallout for Bangladesh could surpass the shock experienced during the Russia-Ukraine War, exposing the country to risks in fuel supply stability, foreign exchange reserves and inflation management.

Particular anxiety centres on the Strait of Hormuz, a critical maritime chokepoint through which roughly 40% of global oil and gas shipments pass. Bangladesh's imports of LNG, LPG and crude oil transit this route, meaning any disruption could immediately affect domestic energy availability.

Markets react to tensions

Energy markets have already reacted to rising tensions. Global oil prices increased by about 2% amid fears of military escalation, while international forecasts suggest crude prices could climb to $80 per barrel or higher, with some projections warning of prices reaching $110 if the conflict intensifies.

Azam J Chowdhury, chairman of East Coast Group, told TBS that retaliatory strikes across the Middle East could halt fuel loading operations at regional refineries, effectively suspending supplies of oil, gas, LNG and LPG.

He noted that Bangladesh lacks the capacity to refine crude oil sourced from alternative producers, making it dependent on Middle Eastern suppliers. In the event of prolonged disruption, the country may be forced to import refined fuel from the spot market at significantly higher prices, he warned.

Azam added that LNG shipments from Qatar could also face interruption following missile attacks in the region, warning that Bangladesh, which imports around 12 to 13 LNG cargoes monthly, could face serious economic consequences.

He urged the government to immediately secure alternative supply arrangements, including agreements with global suppliers such as Malaysia's Petronas, and increase imports of refined petroleum products from international markets.

Risks to industry and inflation

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said rising fuel prices would increase electricity generation costs and worsen existing gas and power shortages, further disrupting industrial production.

Higher energy costs, he warned, would raise the cost of doing business, weaken export competitiveness and potentially fuel inflationary pressures that could trigger labour unrest across industrial sectors.

Centre for Policy Dialogue Executive Director Fahmida Khatun said supply disruptions would increase import costs and place additional strain on Bangladesh's foreign exchange reserves.

She stressed the urgency of identifying alternative fuel sources, noting that global commodity prices – including edible oil, sugar, wheat and fertiliser – could also rise as a result of the conflict.

Zahid Hussain, former lead economist at the World Bank's Dhaka Office, warned that continued conflict could destabilise global commodity markets, disrupt international shipping and logistics networks and heighten investment uncertainty.

He warned that Bangladesh could face three major risks – volatility in global commodity markets, disruptions to international trade and logistics, and heightened uncertainty discouraging investment decisions.

Energy expert Professor Shamsul Alam said higher global fuel prices would inevitably increase production costs across all sectors, pushing up commodity prices and placing additional pressure on consumers.

The Centre for Policy Dialogue (CPD) has urged the newly elected government to immediately scrap the reciprocal trade agreement signed with the United States by the previous interim administration, terming it grossly discriminatory and detrimental to Bangladesh's economic sovereignty.

The think tank also called for a complete departure from the traditional business as usual bureaucratic approach, unveiling a comprehensive 13-sector policy roadmap to guide the government's executive and legislative decisions over the first 180 days and the next five years.

The recommendations were presented today (28 February) at a media briefing titled "New government's economic and social sector policy and administrative decisions: 180 days and beyond," held at the CPD office in Dhaka.

CPD research director Khondaker Golam Moazzem presented the extensive analysis, emphasising that the new administration must adopt knowledge-based decision-making and deeply decentralise power to overcome systemic inefficiencies.

Taking a firm stance on recent international negotiations, the CPD warned that the US trade agreement severely jeopardises Bangladesh's smooth transition strategy (STS) for LDC graduation.

According to the think tank, the agreement's clauses completely restrict Bangladesh's independence in terms of trade and investment with third countries. It forces Bangladesh to comply with US border measures and restricts the imposition of digital service taxes.

The CPD strongly advised the government to withdraw from this agreement before notifications are exchanged and also urged a review of the Economic Partnership Agreement (EPA) with Japan, as it controversially allows duty-free imports of LNG, thereby delaying the country's renewable energy transition.

Beyond trade, the CPD's analysis spanned critical macroeconomic areas, including resource mobilisation, the business environment, and foreign direct investment (FDI). With the country's tax-to-GDP ratio plunging to a South Asian low of 6.8%, the think tank recommended forming a tax ombudsman, consolidating the current eight VAT slabs into a three-tier structure, and eliminating tax incentives for high-emission fossil fuel power producers.

To attract FDI and ease the cost of doing business, CPD proposed enacting a Single Digital Interface Act to legally bind ministries to integrate their databases. They also suggested translating the government's pledges of 48-hour company registration and 30-day profit repatriation into enforceable legal standards, alongside establishing specialised commercial courts for rapid dispute resolution.

Turning to the power and energy sector, the CPD heavily criticised the government's ambitious target to generate 35 GW of electricity by 2030.

"There is no need to fix the BNP's distant target of 35 gigawatts for 2030. Because within that target, we again see an indication of promoting fossil fuels. Therefore, we believe that instead of sticking to the 35-gigawatt target, it would be better to move towards a more realistic goal – as CPD had suggested – that reaching 30 gigawatts by 2040 would be sufficient. We think the new government should proceed with such a target in mind," said Dr Golam Moazzem.

Instead of expanding domestic coal extraction and building new inland LNG terminals, the government was advised to adopt a strict 'no new fossil fuel-based power generation' policy.

The think tank recommended shifting focus toward domestic gas exploration through Bapex, expanding the national rooftop solar programme, and inserting 'No Electricity, No Pay' clauses in all future power purchase agreements to eliminate the heavy burden of unconditional capacity charges.

On the social front, the CPD addressed pressing issues surrounding labor rights, child labour, and international migration.

CPD calls for tax justice, FDI reform

Addressing the alarming rise in child labour, which currently traps 3.5 million children, Golam Moazzem proposed utilising the newly planned Family Card scheme to provide conditional cash transfers to vulnerable households, strictly tied to withdrawing their children from hazardous work and sending them back to school.

To protect outbound migrant workers from rampant extortion, the government was urged to dismantle entrenched recruitment syndicates, mandate digital financial transactions for all recruitment fees, and transform Technical Training Centres (TTCs) into dedicated overseas placement hubs aligned with global market demands.

Golam Moazzem said true accountability cannot be achieved if the government operates solely on the "one leg" of the executive branch. He strongly advocated for parliamentary reforms.

CPD recommended ensuring that opposition MPs lead key parliamentary standing committees, such as the Public Accounts Committee, and reforming the Prime Minister's Question Time to be ballot-based rather than executive-controlled.

Centre for Policy Dialogue (CPD) today (28 February) urged major reforms in tax collection, business climate, trade deals and foreign investment management, warning that without evidence-based decisions and strong accountability, Bangladesh's post-election economic transition could be at risk.

CPD said Bangladesh must urgently overhaul its revenue system, ease the cost of doing business, review recently signed trade agreements and strengthen foreign direct investment (FDI) facilitation to ensure sustainable growth and smooth graduation from Least Developed Country (LDC) status.

Presenting the study titled 'New Government's Priorities in Addressing Socio-economic Challenges: Introducing Knowledge-based Decision Making in the Executive and Legislative Process' at its Dhanmondi office, CPD Research Director Dr Khondaker Golam Moazzem highlighted structural weaknesses in Sections 3, 4, 5 and 6 of the report covering revenue mobilisation, business environment, trade policy and FDI.

Tax-GDP Ratio

CPD said Bangladesh's tax-to-GDP ratio has fallen to approximately 6.8%, the lowest in South Asia, significantly weakening fiscal capacity at a time of rising development needs.

The newly elected government has pledged to raise the ratio to 10% in the medium term and 15% by 2035. But CPD cautioned that revenue sustainability would remain uncertain without prioritising tax justice and plugging systemic leakages.

The study identified 'leaking revenue' as the weakest area across all decision-making indicators.

To address regressivity and inefficiency, CPD recommended consolidating the current eight VAT slabs into a simplified three-tier structure: standard, reduced and zero rates, with a long-term transition toward a two-tier system.

It also proposed eliminating tax exemptions for non-essential services, including exclusive clubs and stock market-related entities, and phasing out tax cut incentives for fossil fuel-based power producers.

Mandatory digital tax return submission, establishment of a digital tax dispute resolution system within 30–45 days and performance-based corporate tax incentives were among the key recommendations.

CPD further suggested linking revenue gains from VAT rationalisation to direct transfers for low-income households instead of broad reduced-rate exemptions.

Business Environment

The report noted that Bangladesh's business environment continues to suffer from transport-logistics bottlenecks, unreliable utilities, regulatory complexity, corruption, weak human capital alignment and fragile banking systems.

It warned that corruption in administrative processes remains the most severe constraint to ensuring an enabling business environment.

Despite digital reforms such as the partial launch of "BanglaBiz" and activation of the Bangladesh Single Window system, CPD found that transparency and accountability remain weak.

The study recommended full backend digital integration across agencies under a unified document management framework to eliminate duplication of business licensing requirements.

It also called for establishing both a Tax Ombudsman and a Banking Ombudsman to address grievances and strengthen institutional accountability.

In the financial sector, CPD flagged high non-performing loans (NPLs) and limited SME access to financing as major barriers.

Although reforms such as the Bank Resolution Ordinance 2025 and Deposit Protection Ordinance 2025 were introduced, the think tank said credit allocation decisions lack transparency and efficient implementation.

It urged Bangladesh Bank to innovate credit assessment models, develop inclusive SME financing options with lower collateral requirements and exercise caution in interest rate reduction to avoid inflationary pressures.

US-Bangladesh Trade Agreement

CPD raised serious concerns over the recently signed "Agreement on Reciprocal Trade" between Bangladesh and the United States, saying several clauses may restrict Bangladesh's trade policy autonomy.

The study alleged that the agreement includes discriminatory provisions relating to import licensing, technical standards and digital trade.

According to CPD, Bangladesh would be required to gradually eliminate tariffs on US-origin goods while facing potential additional tariffs if deemed non-compliant.

The report also claimed that Bangladesh would not be allowed to impose digital service taxes on US companies or introduce customs duties on electronic transmissions.

Other provisions cited include restrictions on retaliatory VAT measures, limitations on agreements with third countries that conflict with US standards and preferential access for certain US goods.

CPD warned that such clauses could severely jeopardise Bangladesh's smooth transition strategy (STS) for LDC graduation, particularly in negotiating balanced free trade agreements (FTAs) and economic partnership agreements (EPAs).

It urged the government to withdraw from the agreement before formal notification exchange and revisit other deals, including the EPA with Japan, particularly provisions related to duty-free LNG imports that may delay energy transition.

FDI Reform

CPD identified six major structural challenges in attracting and retaining foreign investment, including fragmented approvals, policy unpredictability, institutional overlap, slow dispute resolution, land access bottlenecks and weak data systems.

The report said investment approvals remain sequential rather than parallel, even after the launch of BanglaBiz offering over 100 services and fast-track foreign loan approvals up to $10 million for export-oriented firms.

CPD recommended mandatory API-based integration among the Bangladesh Investment Development Authority (BIDA), National Board of Revenue, Registrar of Joint Stock Companies, Customs, BEZA and BEPZA to ensure simultaneous processing and real-time tracking.

The think tank called for converting profit repatriation commitments — including the 30-working-day resolution target — into binding legal standards through legislative amendments.

It also proposed designating specialised commercial benches within the High Court within 180 days and establishing a full-fledged International Commercial Court within 24 months.

To enhance transparency, CPD recommended creating a unified national FDI monitoring dashboard linked to the government's target of raising FDI to 2.5 % of GDP, with quarterly public reporting.

A national readiness audit of economic zones, including litigation-free land and confirmed utility capacity, should be completed within 180 days, the study added.

Dr Moazzem said that raising tax revenue, reducing business costs, negotiating trade agreements and attracting FDI must be guided by knowledge-based decision-making and parliamentary oversight.

He stressed that without structural reforms in fiscal governance, regulatory transparency and institutional accountability, policy initiatives may remain fragmented and ineffective.

"The new government has a strong electoral mandate. The challenge is to translate it into evidence-based, transparent and accountable decision-making," he said.

CPD's findings come as the government prepares to implement its first 180-day priority agenda following the 12 February national election.

After the interim government took over, Ahsan Mansur was perhaps one of the few people who carried out some substantial and visible work. Those of us who closely observed and evaluated his actions tend to agree on one point: during the interim period, the economic sector was the only area where meaningful steps were taken. Compared to other sectors, this one saw concrete reform initiatives, particularly from the central bank.

If we look at the record, significant reforms were introduced in the banking sector. Changes were made to the boards of directors of several banks, and restructuring efforts began. The exchange rate situation improved, foreign reserves showed signs of recovery, and remittance inflows increased. These are not minor developments. I would suggest that during Dr Ahsan H Mansur's tenure, the economic sector experienced notable progress.

That said, it is also true that despite his goodwill and intentions, some reforms could not be completed.
For example, we cannot claim that full monetary discipline was established. Nor can we say that a strong structure of accountability, transparency, and responsibility was fully institutionalised. Still, leaving those limitations aside, I would argue that his tenure left behind considerable achievements.

Now, the question is why he had to leave so abruptly. When a political government is elected, it certainly has the authority to appoint a new governor. It can reshuffle ministries and bring in people it considers more suitable or capable. That is not unusual. What surprised many of us, however, was the manner in which Dr Mansur's departure took place.

As far as we know, he did not receive a formal termination letter. He reportedly learned about his removal through news channels. To me, this indicates that proper institutional due process was not followed. When he left, there was agitation among central bank staff, and he had to leave amid that unrest.

A newly elected government has every right to bring in new leadership, but there is also a matter of institutional etiquette. A proper and respectful transition would have reflected better on the system.

If we think about the monetary and banking reforms initiated during this period, important groundwork has been laid. Discussions had also begun on recovering embezzled funds that were laundered abroad. These were serious steps.

I would like to highlight three concerns about what might happen in his absence.

First, regarding reforms: Many of the recent monetary and financial reforms were undertaken on our own initiative. In the past, such reforms often came in response to directives from institutions like the IMF. This time, however, there was an effort to act proactively. Don't we want a financial sector that operates under a proper system? Don't we want transparency and accountability? Don't we want structural changes that strengthen the sector? Of course we do. These reforms had begun to move in that direction, and many of us appreciated that.

Second, we now have a newly elected government with many pressing political priorities. There are pending bills left by the interim administration, the referendum issue, implementation of the July Charter, and several other political commitments.

My concern is how high financial sector reform will rank among these priorities. There is always the possibility that some regulatory frameworks could be rolled back. Much will depend on how seriously the new government chooses to prioritise economic and financial reform.

Third, and perhaps most importantly, just before the interim government's tenure ended, the issue of granting full autonomy to Bangladesh Bank resurfaced. Dr Mansur raised the matter and placed it before the interim administration, leaving it for consideration by the newly elected government.

The future of many reforms depends heavily on this question of autonomy. Without real independence, the central bank risks functioning more as a department of the finance ministry rather than as the state's monetary authority. In such a scenario, vested interests could exert influence, and reform efforts could stall.

Ultimately, the future of banking and monetary reform in Bangladesh will depend largely on whether the central bank is allowed to operate as a truly autonomous institution. Without that foundation, sustaining meaningful reform will be extremely difficult.

Selim Jahan is a Professorial Fellow at the BRAC Institute of Governance and Development.

ChatGPT developer OpenAI has secured $110 billion in fresh funding from a group of major technology firms led by Amazon, pushing the company's pre-money valuation to $730 billion.

OpenAI co-founder and CEO Sam Altman said yesterday (27 February) that Amazon has committed $50 billion to the round, while Nvidia and SoftBank will each invest $30 billion.

He added that more investors may join as the funding process continues.

'Unbelievably dangerous': ChatGPT Health may miss life-threatening emergencies, finds study

Amazon will initially invest $15 billion, with the remaining $35 billion to be released over the coming months under certain conditions.

Altman said the partnerships will help expand OpenAI's global reach, strengthen infrastructure and improve financial stability, enabling the company to bring advanced AI tools to more users and businesses worldwide.

He noted that ChatGPT now has over 900 million weekly active users and more than 50 million paying subscribers. According to Altman, AI is entering a new stage where cutting-edge research is rapidly turning into everyday tools used at a global scale.

As part of a multiyear deal, OpenAI and Amazon will introduce new AI capabilities for enterprises, with Amazon Web Services becoming the exclusive third-party cloud provider for OpenAI Frontier.

The two firms will also expand their existing agreement by $100 billion over eight years.

OpenAI said it is also deepening ties with Nvidia, while stressing that its long-standing partnership with Microsoft remains unchanged and central to its strategy.

Japan aims to help transform India's Northeast into a geopolitical gateway to Southeast Asia by strengthening connectivity to the Bay of Bengal and the Indian Ocean, Deputy Foreign Minister Horii Iwao said on Thursday.

Speaking in Shillong, Horii said Japan remains "firmly committed" to the region's development and views it as a "powerful engine of growth" when integrated into a broader economic grid spanning Nepal, Bhutan, Bangladesh and Southeast Asia, says the Hindu.

The initiative forms part of Japan's Free and Open Indo-Pacific (FOIP) policy, under which Tokyo is working to establish an "Industrial Value Chain" linking India's Northeast to maritime routes. Officials say the objective is to promote holistic regional development by improving connectivity and supply chains.

Under the administration of Prime Minister Sanae Takaichi, Japan is expanding cooperation with India beyond infrastructure projects to include private-sector collaboration in strategic sectors such as semiconductors, economic security and clean energy.

Horii also highlighted renewed efforts to strengthen people-to-people ties between Japan and the Northeast, including social and cultural exchanges.

The push follows recent high-level diplomatic engagements. Indian Prime Minister Narendra Modi met Takaichi, Japan's first female prime minister, at the Group of 20 summit in South Africa in November 2025.

In January 2026, India's External Affairs Minister Subrahmanyam Jaishankar hosted Japanese Foreign Minister Toshimitsu Motegi for talks aimed at deepening the bilateral partnership.

To help the economy recover from its current challenges, investment should be boosted by increasing taxes on a priority basis, Finance and Planning Minister Amir Khasru Mahmud Chowdhury said today (27 February).

"Our priority is to increase taxes. We need to enhance investment by increasing taxes. Through this, the tax-to-GDP ratio can be increased," he told journalists while visiting the site of a proposed government hospital in the Patenga area of Chattogram city.

The minister made the remarks in response to questions from reporters regarding the government's priorities for overcoming the ongoing economic difficulties and the focus areas of the upcoming national budget.

Khasru said employment generation remains one of the key priorities outlined in the BNP's electoral programmes, emphasising that investment is critical to creating jobs.

"If there is no investment, where will employment come from? That is why we are emphasising domestic and foreign investment. And we have also pledged to make changes in healthcare and education," he added.

He said that employment generation would be the central focus of the next national budget, and the government would take all necessary measures to achieve that goal.

Earlier, the finance minister inspected the designated land in the Jelepara area under Patenga Police Station in Chattogram for the construction of the proposed government hospital.

Bangladesh's economic growth slowed for a third consecutive year in the 2024-25 fiscal year, falling to 3.49% – the weakest performance since the immediate recovery from the Covid-19 pandemic.

The Bangladesh Bureau of Statistics published the final GDP figures on its website today (26 February), showing that the country's economic growth stood 48 basis points lower than the provisional estimate of 3.97% for the last fiscal year to June 2025.

Economists describe the slowdown as inevitable, noting that growth was stifled by mounting pressure from falling investment, contractionary monetary policy, and weakening domestic demand.

The latest data show a steady deceleration in growth over three years. GDP growth stood at 7.10% in FY22 before falling to 5.78% in FY23 and 4.22% in FY24. During the height of the Covid-19 pandemic in FY20, growth had dropped to 3.45%.
Infographics: TBS
Infographics: TBS

The new reading suggests the economy is again hovering close to that low point.

According to the final BBS estimates, Bangladesh's GDP at current prices reached $456 billion in FY25, up from $450 billion in FY24. Per capita income rose to $2,769, after declining for two consecutive years.

Agri, service sectors slowed

Sectoral data show mixed trends, with agriculture and services slowing, while industry recorded a modest improvement compared with the previous year.

Agriculture grew by 2.42% in FY25, compared to 3.30% in the year before. The services sector's growth fell to 4.35% from 5.09% during the same period.

However, industries recorded 3.71% growth in FY25, slightly higher than the past year's 3.51%.

Investment, savings declined

The BBS data also show a broad weakening in investment and savings indicators.

In FY25, the investment-to-GDP ratio stood at 28.54%, down from 30.70% in FY24. The domestic savings-to-GDP ratio fell to 21.98% from 23.96%, while the national savings-to-GDP ratio declined to 27.67% from 28.42%.

Private investment dropped to 22.03% of GDP in FY25.

Per capita income rose to Tk334,511 ($2,769) from Tk304,102 ($2,738) in FY24. In nominal terms, this represents an increase of Tk30,409, or $31, year-on-year.

Slowdown not unexpected

Masrur Reaz, chairman and chief executive of Policy Exchange, said the slowdown, while concerning, was not surprising.

"For the past few years, Bangladesh's economy has been caught in a slow-growth cycle. The fall in GDP growth in FY25 is worrying but not unexpected," he said.

"Since FY2022-23, the economy has faced multiple challenges. High inflation and a decline in demand have reduced domestic output. At the same time, the central bank's high interest rates and contractionary monetary policy have reduced private sector loan demand and credit growth."

He added that the investment-to-GDP ratio has been declining steadily over the past few years. "This drop in growth is not surprising. High inflation, high interest rates and weak domestic demand have reduced output in industry and services, affecting overall economic output."

Masrur said the lack of new investment was another key factor. "Private sector investment has fallen to just 22% of GDP. The year following the political transition was also not supportive for the economic environment."

He noted that after August 2024, public investment also declined, with the Annual Development Programme reportedly at its lowest level in two decades. Law and order instability, protests, supply chain disruptions, and minor natural disasters also affected economic activity.

Disruptions in public administration and regulatory services further weighed on production and investment, he added.

"These four main factors – reduced domestic demand, high interest rates and falling credit growth, lack of new investment, and political and administrative instability – have together affected growth in FY2024-25. Overall, the final GDP figures reflect a slowdown that is quite normal and predictable under the circumstances," Masrur said.

'Economy in a sluggish phase'

Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development (InM), said the outlook was not encouraging.

"In terms of growth, the picture is not very positive. In FY2024-25 the economy was largely stagnant or sluggish," he said.

He explained that industry – particularly manufacturing – and services are the main drivers of growth. "Agriculture usually grows by only 2% to 3%; structurally it is a low-growth sector. Overall GDP growth mainly depends on industry and services. But sustaining and expanding these sectors requires large-scale investment."

He said both domestic and private investment had stagnated. "The private sector carries out most production activities, yet credit flow to this sector has fallen significantly. Recent data show private sector credit growth has dropped to around 6% to 6.5%, the lowest in several years."

Mujeri further said, "When investment falls, production does not increase, employment does not grow, and economic activities do not gain momentum. As a result, growth slows. Various economic indicators suggest the economy is currently going through a phase of stagnation, which is reflected in the GDP figures."

He noted that creating an investment-friendly environment was essential to reverse the trend. "To increase both domestic and foreign investment, policy stability, an environment of confidence, discipline in the financial sector, and stronger infrastructure support are needed."

He described this as a major challenge for the current government: how quickly it can restore momentum in the private sector. "If investment increases, production will rise, employment will grow, and overall economic growth will accelerate again," Mujeri added.

The per capita income in Bangladesh rose by 1 percent year-on-year to $2,769 in the 2024-25 fiscal year, according to final data from the Bangladesh Bureau of Statistics.

The per capita income was $2,738 in 2023–24.

In local currency, the figure stood at Tk 334,511 in 2024-25, up from Tk 304,102 in the previous year.

In FY25, the size of the Bangladesh economy increased to $456 billion from $450 billion a year earlier, although it was lower than the earlier estimate of $462 billion.

Bangladesh’s economy grew 3.49 percent in the fiscal year 2024–25, the slowest expansion in at least three years, owing to weaker performances in the agriculture and services sectors.

The final estimate of gross domestic product (GDP), a measure of the final value of goods and services produced in an economy in a certain period, is lower than the provisional estimate of 3.97 percent estimated earlier by the Bangladesh Bureau of Statistics (BBS).

The national statistical agency released the final calculation of GDP today, saying that only the industrial sector grew at a faster pace in the fiscal year 2024–25 than in the previous year.

Factory output increased by 3.71 percent in FY25, up 0.20 percentage points from the previous year.

Agriculture, the second-biggest employing sector, recorded 2.42 percent growth in FY25, down from 3.30 percent a year earlier.

The services sector, the biggest contributor to GDP, expanded by 4.35 percent in the last fiscal year, slower than the 5.09 percent recorded in FY24.

In FY24, the economy grew 4.22 percent, said the BBS.

For the current fiscal year 2025–26, sluggish economic growth is projected to continue, according to forecasts by multilateral agencies such as the International Monetary Fund.

The Centre for Policy Dialogue (CPD) has urged the government to halt new fossil fuel-based power projects, revise what it called inflated demand projections and bolster parliamentary oversight to put Bangladesh's power and energy sector on a fiscally sustainable and climate-aligned path.

CPD said Bangladesh's power and energy sector is at risk of fiscal stress, stranded assets and stalled renewable energy transition due to overestimated demand projections, fossil fuel lock-in and weak regulatory transparency.

Presenting a research paper titled 'New Government's Priorities in Addressing Socio-economic Challenges: Introducing Knowledge-based Decision Making in the Executive and Legislative Process' at CPD's Dhanmondi office today (28 February), CPD Research Director Khondaker Golam Moazzem outlined a series of structural weaknesses in the sector and recommended urgent reforms within the first 180 days of the new government.

The study identified 'Power and Energy: Reviving for Energy Transition' as the seventh priority sector and found that procedural transparency, accountability, and implementation efficiency remain the weakest pillars of decision-making in this sector.

CPD noted that existing master plans project electricity demand to reach 40-50 gigawatts (GW) by 2040, while independent estimates suggest a more realistic requirement of around 30 GW.

The study warned that inflated GDP-demand linkages, rather than actual industrial consumption data, have been used to justify aggressive expansion targets.

This could lead to massive surplus capacity that would be 'difficult to undo', increasing fiscal burdens through long-term contractual obligations.

Without structural reforms and parliamentary oversight, the sector risks repeating past mistakes of overcapacity, high tariffs and fiscal stress
Khondaker Golam Moazzem, Research Director, CPD

Spatial planning mismatch was also highlighted, with Dhaka receiving disproportionately high projections compared to emerging industrial hubs such as Chattogram and Sylhet.

CPD recommended that Bangladesh Power Development Board (BPDB) and Power Cell adopt rigorous econometric forecasting methods and subject revised projections to independent validation and parliamentary review.

The report underscored the structural burden of capacity payments to independent power producers (IPPs), even for idle plants. Despite recent tariff hikes reaching Tk 8.95 per unit in 2024 — fiscal stress persists.

According to the study, plant-by-plant payment details and the rationale behind tariff adjustments lack transparency, while public hearings by the Bangladesh Energy Regulatory Commission (Berc) have often been bypassed.
Banking sector remains most fragile area of Bangladesh's economy: CPD

CPD recommended introducing a 'No Electricity, No Pay' clause in future Power Purchase Agreements (PPAs) to eliminate unconditional capacity charges. It also called for renegotiation of rigid 'take-or-pay' contracts, though acknowledging the legal complexity involved.

The think tank warned of growing dependence on imported LNG and coal, raising concerns about stranded assets and fiscal instability.

It said long-term price volatility impacts are systematically downplayed and that insufficient assessment has been conducted regarding risks associated with new LNG terminals and coal-based infrastructure.

CPD proposed adopting a clear 'No New Fossil Fuel-Based Power Generation' policy and urged reassessment of planned coal projects, including Matarbari Phase 2, through parliamentary debate to ensure fiscal and climate accountability.

The study also called for scaling up regional power trading with Nepal and Bhutan to import hydropower and balance solar intermittency.

While the interim government approved the Renewable Energy Policy 2025, CPD observed that grid absorption capacity for variable renewable energy (VRE) remains capped at 20%, and smart grid implementation has been deferred to 2040-2050.
Next govt must go for swift reforms to stabilise economy: CPD

Private renewable energy developers face bureaucratic hurdles in securing grid interconnection approvals, the report said.

CPD recommended that Power Grid Bangladesh (PGB) conduct a technical grid stress test to determine upgrades required to absorb at least 30% renewable energy by 2030.

It also proposed establishing an Independent System Operator (ISO) to separate grid management from BPDB and ensure institutional neutrality.

A 'Resource-to-Grid Data Hub' integrating real-time renewable energy potential mapping across districts should be developed under parliamentary monitoring, the study added.

In the primary energy segment, CPD highlighted a persistent daily gas shortage of around 1,200 million cubic feet per day (mmcfd), with total demand at 3,800 mmcfd against supply of just over 2,600 mmcfd, including LNG imports.
CPD's Fahmida calls for 'comprehensive economic reforms'

The report argued that increasing LNG imports alone would deepen financial burdens and recommended prioritising domestic gas exploration instead.

It stressed that overemphasis on new LNG infrastructure and domestic coal exploration reflects weaknesses in evidence-based analysis and stakeholder engagement.

A central theme of the CPD study is embedding knowledge-based decision-making in both executive and legislative processes.

The report called on the Parliamentary Standing Committee on Power and Energy to review all major generation, fuel mix and procurement decisions to ensure statutory compliance and transparency.

It noted that suspension of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 by the interim government is a positive step toward restoring competitive procurement and judicial oversight.
Govt to renegotiate Hasina-era power deals, cites fiscal stress

CPD, however, warned that without institutional restructuring, real-time data transparency and structured parliamentary scrutiny, reform efforts may remain partial.

Immediate and long-term priorities

For the next 180 days, CPD recommended:

No approval of new fossil fuel-based power plants
Independent validation of revised demand projections
Introduction of "No Electricity, No Pay" clauses in future contracts
Engagement with export-oriented industries in designing a National Solar Rooftop Programme
Institutionalising parliamentary review of all major sectoral decisions

Beyond 180 days, the study proposed grid modernisation, establishment of an Independent System Operator, zonal energy audits, smart grid pilots, and legislative-backed accountability frameworks.

Moazzem said the success of the new government would depend on its ability to align fiscal prudence, climate commitments and energy security through transparent, evidence-driven policymaking.

"Without structural reforms and parliamentary oversight, the sector risks repeating past mistakes of overcapacity, high tariffs and fiscal stress," Moazzem added.

After eight consecutive years of losses and steadily declining sales, GQ Ball Pen Industries has surprised the market as its share price surged more than 200% in the eight months since June, raising eyebrows among investors.

Despite weak business fundamentals — low sales and persistent losses — the company's market capitalisation has climbed to about Tk476 crore, even though its annual sales are only around Tk2 crore.

According to data from the Dhaka Stock Exchange (DSE), GQ Ball Pen's share price rose from Tk169.6 on 30 June last year to Tk523.9 on Thursday (26 February).

The company manufactures various types of ballpoint pens and distributes them to stationery shops through distributor networks as well as to institutional buyers through its sales team.

GQ Ball Pen has a paid-up capital of Tk8.93 crore, divided into 89.28 lakh shares, around 60% of which are held by general investors.

Sales slump

A decade ago, the company's business was significantly larger. In 2015, GQ Ball Pen reported annual sales of Tk22.28 crore, a 23% increase from the previous year, although it still incurred a loss of Tk1.04 crore with a per-share loss of Tk1.17.

In the following fiscal year, 2016-17, the company posted a profit of Tk1.47 crore despite declining sales.

However, the company's performance has deteriorated since then. From FY2018 onward, the company has been incurring losses for eight consecutive years.

Industry observers say the once-popular Econo brand has struggled to remain competitive in a market increasingly dominated by imported and modern refill-style pens.

Sales hit bottom last year

In FY2025, GQ Ball Pen's sales fell to just Tk1.85 crore, while the company reported a loss of Tk1.63 crore, translating to a loss per share of Tk1.83.

Responding to questions about the business downturn, Uzzal Kumar Saha, managing director of GQ Ball Pen Industries Ltd, told The Business Standard that production has been affected by ongoing factory modernisation.

"Due to the ongoing Balancing, Modernisation, Rehabilitation and Expansion (BMRE) at our factory, production has declined significantly, which has limited product supply in the market," he said, adding that sales are expected to improve once the BMRE work is completed.

During FY2024-25, the company operated on a limited scale, resulting in sales dropping to Tk1.85 crore from Tk5.43 crore a year earlier. Most of the sales during the period came from selected institutional buyers.

In its annual report, the company cited two main reasons for the continued losses – aging machinery and shifting customer demand from traditional direct-fill pens to modern refill-style ball pens, reflecting the need for modernisation.

Pays regular dividend despite losses

Despite recording losses for the past eight years, GQ Ball Pen has continued to pay cash dividends to shareholders.

Over the years, the company has declared cash dividends ranging from 2.5% to as high as 12.55%. In FY2025, it paid a 10% cash dividend to general shareholders.

From market pioneer to struggling player

Founded in 1981, GQ Ball Pen Industries once revolutionised handwriting in Bangladesh with its popular Econo brand ballpoint pens.

For nearly three decades after its establishment, the company enjoyed strong business growth. However, since around 2012 it has gradually lost market share amid rising competition and changing consumer preferences.

Today, the company is attempting to revive its business through factory modernisation and product upgrades, hoping to regain a foothold in the competitive ballpoint pen market.

Bangladesh’s private investment fell for the third consecutive year, reaching 22.03 percent of Gross Domestic Product (GDP) in the fiscal year 2024-25, the lowest level in 11 years, amid a weak investment climate and macroeconomic stress.

Public investment as a share of GDP, a measure of the final value of goods and services produced in the economy over a period, also declined for the third year due to slow implementation of the Annual Development Programme (ADP).

It stood at 6.51 percent of GDP in FY25, the lowest since at least FY13, down from 6.74 percent a year earlier, according to the Bangladesh Bureau of Statistics (BBS).

Economists say that the falling investment trend indicates the creation of fewer jobs than required, especially for the growing number of young workers entering the labour market each year.

According to them, the investment decline also threatens future growth.

“It is very concerning, especially at a time when we need to accelerate investment to create employment and boost exports,” said M Masur Reaz, chairman and founder of Policy Exchange Bangladesh.

The investment-to-GDP ratio comes alongside an estimated economic growth of 3.49 percent, the lowest since the Covid year 2020, driven mainly by private consumption. The decline suggests overall investment has not kept pace with the growth of the economy.

Reaz attributed the fall in private investment to three main factors.

“Our investment environment is weak, and it was identified nearly a decade ago,” he said, citing Bangladesh’s ranking in the World Bank’s ease of doing business at 176 out of 190 economies.

“From that day, comprehensive and targeted reforms were necessary. But they were implemented in an isolated and fragmented manner.”

The economist added that investment depends on multiple factors, including licensing, policy predictability, land, energy, and trade facilitation.

The macroeconomic crisis that began to unfold from 2023 further dampened investment sentiment, he said. Weak domestic demand, import contraction caused by the dollar shortage, and political instability ahead of the election all played a role.

“Foreign investors perceive a country as high risk when a country suffers from a macroeconomic crisis,” he said, noting that uncertainty increased after the mass uprising in July 2024 that led to the ousting of the Sheikh Hasina government.

“We have seen demonstrations and unrest, and they have affected the policy environment too. The whole fiscal year 2024-25 was full of uncertainty. The declaration of the general election date came in August of this fiscal year.”

Reaz added that the recent demonstration at the Bangladesh Bank over the removal of the central bank governor could create a negative international perception, signalling fragility in decision-making and discipline.

Ashikur Rahman, principal economist at the Policy Research Institute (PRI) of Bangladesh, identified a weak business climate, infrastructure bottlenecks, and waning competitiveness in international markets as production costs rose amid supply-side constraints.

He said governance breakdown in the banking sector since around 2020 has severely distorted credit allocation.

“Instead of channelling funds toward productive small and medium-sized enterprises, the financial system became increasingly captured by entrenched economic oligarchs. Large-scale loan irregularities and weak oversight eroded confidence and crowded out genuine entrepreneurs.”

Rahman added that small and mid-sized firms, traditionally the backbone of the employment generation, found themselves sidelined from access to affordable finance.

“This created a perverse incentive structure in which politically connected borrowers benefited, while real sector innovators were marginalised.”

He added that the decline in private investment as a percentage of GDP has profound implications for the country’s economic development.

“Investment is the engine of productivity growth, job creation, and structural transformation. A sustained decline weakens the economy’s capacity to generate employment, particularly for a young and expanding labour force.”

Rahman said it also limits technological upgrading and diversification beyond traditional sectors.

“Moreover, without robust private investment, growth becomes increasingly consumption-driven and fiscally strained. This is not sustainable, especially as Bangladesh approaches LDC graduation and faces tighter external financing conditions. Weak investment today translates into slower growth tomorrow, and slower growth amplifies challenges such as unemployment, underemployment, and poverty,” he added.

Syed Akhtar Mahmood, former global lead for regulatory reforms at the World Bank Group, said the low investment rate is caused by a mix of short and long-term issues. While governments have tried to improve the investment climate, many fundamental problems remain, including regulatory hurdles and limited access to credit.

High interest rates, bank liquidity issues, and greater risk aversion have reduced the supply of credit.

“Even if investors were willing to borrow at the higher interest rates, they are not getting financing. Many investors, especially some large ones, have over-leveraged themselves by borrowing heavily when interest rates were low. These companies may not be in a position to take on large loans even if they see good investment potential,” he said.

Mahmood added that energy shortages and political uncertainty have further dampened investor confidence.

“Low investment means our production capacity is not augmented while our existing capacity is under-utilised,” he commented.

According to Mahmood, this affects both current growth and future growth prospects. It also limits technological upgrading, research and development, skills development, and new product creation, all of which are necessary to enhance productivity and diversify the economy, including exports.

“When investors are struggling to carry out even basic investments, they are unlikely to invest in things that make our economy more competitive,” he said.

The Dhaka Stock Exchange has experienced a volatile yet gradually stabilising trend during the first eight trading sessions after the BNP assumed office, reflecting investor optimism alongside uncertainty over regulatory reforms and policy direction.

On the day the BNP officially formed the government on 17 February, the benchmark DSEX index of the Dhaka Stock Exchange closed at 5,570 points with turnover at Tk1,222 crore, indicating strong investor participation. However, the rally quickly lost steam.

The following session on 18 February saw the index fall to 5,519, with turnover dropping to Tk936 crore. The downward trend continued on 19 February, the day Ramadan began, when the DSEX declined further to 5,465 and turnover fell sharply to Tk560 crore.
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Trading hours were shortened by 40 minutes for Ramadan, contributing to lower turnover in subsequent sessions. On 22 February, the index marginally recovered to 5,467 with turnover of Tk568 crore.

Momentum improved on 23 February as the DSEX climbed to 5,553 and turnover rose to Tk718 crore. The market slipped slightly again on 24 February, closing at 5,542 with turnover increasing to Tk825 crore.

On 25 February, the index edged up to 5,554 while turnover declined to Tk565 crore. By 26 February, the DSEX regained strength to close at 5,600, accompanied by a strong rebound in turnover to Tk947 crore.

The overall performance suggests that while initial euphoria faded quickly, the market has shown resilience amid ongoing discussions about regulatory restructuring and reform.

Finance Minister Amir Khosru Mahmud Chowdhury recently hinted at restructuring the securities regulator, stating that although the current upward trend may reflect optimism surrounding the democratic transition, only sustainable and structural reforms can ensure long-term stability.

Speaking to journalists during a visit to Chattogram, he emphasised that sentiment-driven gains would not bring fundamental change and that comprehensive reforms, including amendments to laws and regulatory frameworks, are under consideration.

He also stressed the importance of strengthening the Bangladesh Securities and Exchange Commission, enhancing transparency and adopting a zero-tolerance stance against irregularities.

The government has already begun searching for a new BSEC chairman, as the current commission, formed during the interim administration and led by Khondoker Rashed Maqsood, has struggled to restore investor confidence.

Finance ministry officials indicated that the regulator may undergo broader restructuring as part of efforts to address long-standing weaknesses in a market that has lagged behind the country's overall economic growth.

Stakeholders say that several private-sector professionals and at least one academic from the University of Dhaka have shown interest in leading the commission. However, many market participants favour leadership from the private sector, citing experience and the need for market-oriented reforms.

The DSEX had initially surged nearly 200 points to a five-month high on 15 February, the first trading session after the BNP's landslide victory in the 13th national election, reflecting investor optimism. That enthusiasm, however, was tempered by uncertainty over the regulatory leadership and broader policy direction.

Minhaz Mannan Emon, director of the DSE, said the BNP's election manifesto included a specific roadmap for capital market development, raising expectations among investors. According to him, thousands of investors who suffered heavy losses in the past decade are now looking to the new government for meaningful reform and accountability.

Notable gainers over the eight-session period included National Bank, S Alam Cold Rolled Steels, Shinepukur Ceramics Limited, Beximco Pharmaceuticals, BIFC, Prime Finance, GSP Finance and Fareast Finance.

Market insiders noted that several stocks that had remained under pressure during the interim government due to production closures and liquidation risks rebounded sharply following the political transition.

As the market moves forward, analysts say sustained improvement will depend less on short-term sentiment and more on the implementation of credible reforms aimed at strengthening governance, boosting liquidity and rebuilding trust among domestic and foreign investors.

Stocks maintained strong upward momentum today (26 February) as trading activity surged at the Dhaka bourse following the appointment of a new governor at Bangladesh Bank, with turnover soaring 68%.

The benchmark DSEX of the Dhaka Stock Exchange advanced 45 points, or 0.81%, to close at 5,600, regaining the key psychological level after recent volatility. The blue-chip DS30 index rose 17 points, also 0.81%, to finish at 2,169.

Market breadth remained firmly positive, as 239 issues advanced, 93 declined and 59 remained unchanged, reflecting broad-based buying.

Turnover climbed sharply to Tk947 crore, signalling renewed investor participation and improved liquidity. Market capitalisation also increased, supported by gains in large-cap stocks.

Major contributors to the ryesally included Islami Bank Bangladesh, Beximco Pharmaceuticals, City Bank, Eastern Bank and Robi Axiata, whose price appreciation lifted the indices.

Mostaqur Rahman FCMA was appointed governor of Bangladesh Bank for a four-year term on Wednesday, replacing Ahsan H Mansur.

Market observers noted that Mostaqur's prior experience as a board member of the Chittagong Stock Exchange between 1998 and 2000 underscores his familiarity with the capital market.

Minhaz Mannan Emon, director of the DSE and managing director of BLI Securities Limited, told The Business Standard that the day's rally and transaction growth had no direct correlation with the governor's appointment.

However, he voiced optimism about the new governor's integrity and longstanding engagement with national economic affairs, suggesting such factors could bolster investor confidence.

He also said the formation of a new government by the Bangladesh Nationalist Party has generated expectations of administrative changes across key institutions.

Speculation regarding potential leadership changes at the Bangladesh Securities and Exchange Commission may also be shaping investor sentiment, he added.

According to EBL Securities' daily market review, the capital market extended its recovery from a brief correction phase, driven by broad-based buying.

While mid-session profit-taking briefly slowed the rally, renewed buying interest in the latter half pushed the indices higher by the close.

Sector-wise, banking stocks dominated turnover with a 22% share, followed by pharmaceuticals (18.7%) and telecom (9.1%). All sectors ended in positive territory, led by ceramic (up 3.1%), IT (2.3%) and travel (2.3%).

City Bank, Robi, Orion Infusion, Khan Brothers PP Woven Bag and BRAC Bank topped the turnover chart.

Several loss-making firms featured among the gainers, including Familytex, BIFC, Union Capital and ICB Islamic Bank, each posting the maximum 10% rise.

Meanwhile, the Chittagong Stock Exchange PLC also closed higher. The CSCX index gained 69 points to 9,587, while the CASPI advanced 128 points to 15,597.

Turnover at the port city bourse stood at Tk19.54 crore, reflecting positive sentiment across both trading floors.