The US central bank is widely expected to keep interest rates unchanged at its policy meeting next week, as energy prices stay high and supply chains snarled due to war in the Middle East.

The Federal Reserve’s two-day meeting, starting Tuesday, could be chairman Jerome Powell’s last at the helm of the independent institution.

But it takes place against a tricky backdrop. Powell’s successor has faced a bumpy road to confirmation, while policymakers battle competing pressures as steeper fuel prices drive inflation and job market worries linger.

Fed officials are set to keep rates steady at a range between 3.50 percent and 3.75 percent, extending their pause since the start of the year.

“We still have a very high level of uncertainty on what’s happening in the Middle East,” KPMG senior economist Kenneth Kim told AFP.

Oil and gasoline prices remain elevated even if they have peaked, meaning “there’s certainly an energy shock that’s still impacting both consumers and businesses,” he said.

The Fed has a dual mandate of maintaining price stability and low unemployment.

It tends to keep interest rates high to curb inflation or lower them to spur growth, meaning that current conditions pull officials in different directions.

Navy Federal Credit Union Chief Economist Heather Long expects Powell to be “non-committal” on the path of rates, as the full impact from the war on Iran remains unknown.

The oil price hikes came after US-Israeli strikes targeting Iran from February 28 sparked Tehran’s retaliation in virtually closing the Strait of Hormuz -- a key waterway for energy transit.

CONTAINING INFLATION

Fed officials will likely focus more on containing inflation than the jobs market this meeting, with the war entering its ninth week.

The strait is also a key passage for fertilizers, and disruptions threaten to hit food production.

Already, US consumer inflation reached its highest level in nearly two years in March at 3.3 percent as energy costs rocketed.

Fed Governor Christopher Waller, who earlier backed lower rates to support employment, indicated this month that a prolonged conflict could make it hard for the central bank to cut rates this year.

If there were high inflation and a weak labor market, one would have to balance risks on both sides.

This “may mean maintaining the policy rate at the current target range if the risks to inflation outweigh those to the labor market,” he told an Alabama event.

KPMG’s Kim said solid hiring recently “gives the Fed some cushion” to temporarily focus more on prices.

Analysts will monitor if the Fed signals in its post-meeting statement that rate hikes are a possibility.

‘CRITICAL JUNCTURE’

The Fed is also taking its next steps under intense political scrutiny.

President Donald Trump has made no secret of his wish for lower interest rates, and regularly slammed Powell for not cutting them aggressively.

Beyond rhetoric, Trump has sought to oust Fed Governor Lisa Cook over claims of mortgage fraud. The Supreme Court is set to rule on whether he can fire her.

Meanwhile, Trump’s choice of new Fed chairman -- Kevin Warsh -- has faced a bumpy road to confirmation.

Republican senator Thom Tillis on the Senate Banking Committee vowed to block Fed appointments until a Justice Department probe into the Fed and Powell is resolved, setting up a potential impasse on the panel Warsh needs to clear.

But the Department of Justice said Friday it would drop the investigation linked to renovation costs overruns, potentially paving the way for Warsh’s ascendance.

Asked by journalists Saturday about the DOJ’s move, Trump said he still wants to look into the cost of the Federal Reserve building renovations, which he has claimed is too high.

“I tell you, I want to find out. I have an obligation to find out,” he said.

Warsh has repeatedly pledged to remain independent if confirmed.

“We’re at a critical juncture for the Fed,” EY-Parthenon chief economist Gregory Daco told AFP.

“It may be that under Warsh, we’re going to see less Fed transparency, less Fed communication than we had in the past,” he said, referring to Warsh’s confirmation hearing testimony.

Powell’s chairman term expires May 15, and he originally intended to stay on the Fed’s board of governors until the probe on him is completed.

All eyes are on his future plans at his scheduled press briefing Wednesday.

A quiet but fast-moving shift is underway on Bangladesh's roads as electric bikes and e-scooters emerge as a new growth industry, drawing over Tk2,000 crore in fresh investments and rapidly rising consumer demand.

What began as a niche market just a few years ago is now drawing significant investment from some of the country's largest conglomerates, including Nasir Group, Walton, PRAN-RFL Group, Runner Automobiles and Akij Group.

Driven by high fuel prices, rising urban living costs, traffic congestion and growing demand for cleaner transport, e-bikes are increasingly becoming a practical choice for commuters and a serious business opportunity for manufacturers.

Industry insiders estimate that at least five major companies made fresh investments in the sector over the past year alone, with ongoing commitments exceeding Tk2,000 crore.

At the same time, imports have surged sharply, highlighting how rapidly consumer demand is building. Just three years ago, monthly e-bike sales in Bangladesh were negligible, hovering around 100 units. Today, monthly sales have climbed into the thousands.

National Board of Revenue data show imports of e-bikes quadrupled within three years. Imports rose from 2,446 units in FY23 to 10,053 units in FY25. However, industry players say the actual market is significantly larger.

Subail bin Alam, chief operating officer of Nasir Syntax Motors Ltd, said NBR import data do not fully capture the market because a large volume of CKD kits entered Bangladesh in 2025 and many of those shipments are not reflected in the headline numbers.

"If those are added, the actual figure would be several times higher, with hundreds of e-bikes now being sold every day," he added.

He said the market received a major boost after the government reduced taxes on imported electric two-wheelers and parts in 2024. Currently, completely built-up unit imports face 98.87% tax, while CKD imports are taxed at around 37%, making local assembly increasingly attractive. For fuel-based motorcycles, the rates are 125% and 90%, respectively.

This shift has encouraged multiple firms to enter the market or expand operations.

Subail added that while fuel-based motorcycles cost around Tk3-4 per kilometre to operate, e-bikes cost only 30-40 paisa per kilometre, making them highly cost-effective for daily users.

"A battery costing Tk30,000-35,000 can last around three years. Over the same period, maintenance costs for petrol bikes are much higher. That is why consumers are turning to e-bikes as an alternative."

Major players scale up investments

Among the newest major entrants is Nasir Group, which has already invested Tk300 crore in the sector.

The company launched five models in November 2025, two with graphene batteries and three with lithium batteries, and has already built showrooms in 40 districts as part of an aggressive expansion strategy.

Subail said Nasir Syntax Motors initially began producing around 70 bikes per day, but has built a factory with the capacity to scale several times higher depending on demand.

"Our target is to invest Tk500 crore in EVs," he said.

PRAN-RFL Group has also entered the race with its RYDO e-scooter brand. The company has invested around Tk200 crore, with production beginning in January this year at its Habiganj facility.

The plant currently produces around 500 units per month, with plans to scale up to 3,000 units monthly at full capacity.

RN Paul, managing director of RFL Group, said current duty structures remain a challenge because they raise retail prices.

He said the company is engaging with policymakers and aims to bring e-scooters to market at around Tk50,000 by 2027, subject to stronger policy support.

Walton, one of Bangladesh's largest electronics manufacturers, has already established an early lead. The company launched the country's first locally produced e-bike under the Takyon brand in 2022 and currently commands around 18% market share.

Its manufacturing ecosystem already includes assembly lines, plastic moulding, PCB SMT production for digital systems and battery management systems, as well as battery manufacturing facilities.

Touhidur Rahman Rad, chief business officer of Walton Digi-Tech Industries Ltd, said Walton plans a dedicated 1,20,000-square-foot e-bike factory with an annual production capacity of 20,000 units.

The project is expected to generate more than 1,500 jobs with an investment running into several hundred crore taka.

He said e-bikes can reduce household transport fuel costs by as much as 80%, allowing families to recover the cost of ownership within a relatively short period.

Runner, Akij intensify competition

Runner Automobiles, a long-established player in Bangladesh's motorcycle market, has also accelerated its EV strategy.

After entering motorcycle manufacturing in 2012 with over Tk500 crore in phased investment, Runner began assembling e-scooters in 2025 in partnership with China's Yadea.

It had already launched e-bikes under the eWave brand several years earlier.

Priced between Tk70,000 and Tk100,000, Runner's e-bikes have gained a strong foothold.

Runner Automobiles Chairman Hafizur Rahman said the company plans to move from assembly to full manufacturing at its Bhaluka factory in Mymensingh.

Meanwhile, Akij Motors entered the e-bike segment between 2020 and 2022 and now assembles seven models at its Gazipur facility.

The company is focusing on the premium segment, with most models priced above Tk1,00,000.

An Akij official said customer preferences are shifting towards better performance, durability and higher-quality vehicles.

Why consumers are switching

A petrol-powered motorcycle typically costs Tk2-3 per kilometre in fuel. An e-bike costs only Tk0.30-0.40 per kilometre.

There is no engine oil, lower servicing costs, and monthly charging expenses can be as low as Tk300-500.

Nawshad Alam, an HR official at BRAC Bank, recently bought a Jiho A8 SE electric scooter for Tk2,20,000.

The lithium-powered scooter can travel 105–110 kilometres on a full charge.

"I bought an e-bike to avoid the hassle of fuel," he said.

"I no longer need to stand in petrol pump queues. I charge it at home. There is almost no fuel or servicing cost, and the company gave a three-year warranty."

He added that premium models are expensive, but entry-level bikes begin at around Tk50,000.

Md Mahmudur Rahman, general manager of RFL E-bike, said young professionals, especially women, are increasingly adopting e-bikes.

Their controlled speed makes them appear safer to many families, helping transform them from transport tools into lifestyle products.

He said countries such as India, China and Vietnam demonstrate the long-term potential of electric mobility.

Even families that already own cars or motorcycles are buying e-scooters for short urban trips because of their affordability and convenience, he added.

Md Matiur Rahman of Transsion Holdings said rising fuel prices and worsening congestion are steadily pushing consumers away from conventional motorcycles.

Import dependency

Despite growing local assembly, Bangladesh remains heavily reliant on imports.

Most units arrive fully built from China, while another 20-30% come in as SKD or CKD kits for local assembly. Foreign brands still dominate parts of the market.

Revoo, imported by Transsion Holdings since 2022, controls around 20% market share, offering high-performance models with ranges of up to 80 kilometres, swappable lithium batteries and NFC smart unlocking.

Chinese brands such as TailG, Salida, AIMA and Exploit also maintain strong positions.

Charging, registration still major barriers

Industry leaders say the sector's biggest growth constraints are inadequate charging infrastructure and cumbersome registration processes.

Bangladesh currently has only 112 public charging stations, concentrated in Dhaka and Chattogram, creating severe range anxiety outside major cities.

Subail of Nasir Syntax Motors said a rider who leaves home with a partial charge has few options if the battery runs out mid-journey.

"Fuel stations exist everywhere, but charging stations do not. The government still has no clear policy framework. This is a major barrier for EV adoption," he said.

Walton's Touhidur Rahman said demand is currently stronger in Khulna and Chattogram than in Dhaka in some cases, partly due to road-use patterns and infrastructure realities.

He said rapid expansion of fast-charging and battery-swapping stations would dramatically accelerate growth.

Md Moshiuzzan, director of corporate affairs at Nasir Syntax Motors, said e-bike registration costs range from Tk8,000 to Tk12,000.

He added that no dedicated BRTA desk exists for e-bike registration, forcing many buyers into lengthy procedures and leaving many vehicles unregistered.

Bangladesh's motorcycle market is now worth an estimated Tk7,000-8,000 crore, expanding at 16-17% annually.

Nearly 99% of motorcycles sold locally are now manufactured or assembled in Bangladesh, a transformation driven by supportive industrial policies.

If registration systems are simplified, charging infrastructure expanded and tax policies remain supportive, Bangladesh's e-bike market may soon become the next major success story in domestic manufacturing and urban mobility, stakeholders say.

Separating tax policy from administration and establishing a credible macro-fiscal framework are "mission-critical" reforms for Bangladesh, according to development partners and economists speaking at a high-level policy dialogue in Dhaka yesterday (26 April).

Jean Pesme, division director of the World Bank for Bangladesh and Bhutan, said strengthening the tax system requires urgent institutional clarity and consistent implementation.

"Let me begin by echoing two key points that have already been raised. First, the separation between tax policy and tax administration is absolutely mission-critical. While there may have been reasons for not advancing this reform earlier, it is something that now needs to happen. This separation is essential for improving governance within the tax system, as well as for advancing digitalisation," he said.

He stressed that Bangladesh must move forward with a clear tax reform roadmap and avoid policy reversals.

"The second major challenge is to establish a clear tax reform plan and begin implementation without policy reversals. What matters most at this stage is that the overall direction is crystal clear, and that implementation supports this direction to demonstrate credibility," he added.

Pesme also warned that investors judge policies based on execution rather than announcements. "From an investor's perspective, the key question is whether policy announcements will actually be implemented. It may be more effective to start with less ambitious reforms, but ensure they are properly executed."

He further said Bangladesh's investment climate requires stronger foundations, noting that revenue mobilisation, financial sector stability, and business environment reforms must move together. "Countries that attract investment do so not just through incentives, but through macroeconomic stability, strong institutions, rule of law and efficient administration," he added.

He also highlighted concerns over low tax-to-GDP ratio, high tax expenditures, and over-reliance on exemptions, stressing the need to broaden the tax base and improve transparency.

Echoing similar concerns, Chandan Sapkota, country economist at the Bangladesh Resident Mission of the Asian Development Bank, said revenue reform and macro-fiscal discipline are central to improving economic stability.

"I think the point on revenue is very important, particularly the institutional reforms around how the National Board of Revenue is structured," he said.

He noted that weak fiscal discipline creates mid-year policy adjustments and discretionary space within tax administration.

"Bangladesh is the only country in South Asia without a clear fiscal anchor. As a result, there is no strong discipline on the expenditure side, and when that discipline is missing, it also affects revenue discipline," he said.

He added that improving the macro-fiscal framework is urgent in the context of rising debt pressures and long-term fiscal sustainability.

The remarks came at a high-level luncheon organised by the Foreign Investors' Chamber of Commerce and Industry (FICCI) at a hotel in Dhaka today, focusing on "Conducive Fiscal Policy for a Better Investment Climate".

The event brought together policymakers, economists, development partners, business leaders, and members of the diplomatic community to discuss Bangladesh's fiscal outlook. The session featured M Masrur Reaz, chairman of Policy Exchange Bangladesh, as the keynote speaker. He noted that tax policy and administration remain key concerns for investors, citing high corporate tax rates, complex compliance processes, fragmented administration, and policy unpredictability as major challenges.

The panel discussion was moderated by Shams Zaman, board member of FICCI and country managing partner at PwC. Panelists included Jean Pesme of the World Bank, Chandan Sapkota of the Asian Development Bank, Fahmida Khatun, executive director of Centre for Policy Dialogue, and Abul Kasem Khan, chairperson of Business Initiative Leading Development (BUILD).

Panelists broadly agreed that ensuring policy stability, simplifying the tax system, strengthening institutions, and improving coordination among regulatory bodies will be critical to attracting and sustaining foreign investment in the coming years.

Fahmida Khatun called for tariff rationalisation to be the most urgent reform priority this year, stressing that Bangladesh must prepare for a post-LDC graduation reality by strengthening domestic revenue mobilisation without over-reliance on import duties.

Rupali Haque Chowdhury, FICCI president and managing director of Berger Paints Bangladesh, said that to improve the business environment, attract investment, and increase the tax-to-GDP ratio, it is essential to ensure transparency, digitalisation, and policy continuity.

Abul Kasem Khan said, "M Masrur Reaz showed a corporate tax rate of around 27.5%, but in reality we are paying close to 40%. One of my companies is even paying about 45% because of the Advance Income Tax. So, this requires a radical reform.

"I would suggest doing away with AIT if possible. I understand it is a difficult policy choice, but if additional taxes are collected on income or profits, that amount should either be refunded or adjusted against next year's liabilities."

He added, "If such a reform is introduced and linked with employment generation, it could create a strong incentive structure. Companies that generate more employment could receive refunds, encouraging them to reinvest profits into capital machinery, expansion, or new business ventures instead of distributing everything as dividends. This kind of reform would help promote reinvestment, productivity, and job creation."

Tax deduction at source (TDS) has long served as an efficient mechanism for revenue collection within Bangladesh’s income tax framework. However, its growing overlap with the turnover-based minimum tax, and the treatment of tax deducted at source as minimum tax in many cases under the Income Tax Act 2023, is creating unintended structural distortions in the business environment. While these measures may ensure a predictable revenue stream for the government, their combined effect is becoming increasingly burdensome for businesses, particularly in terms of cash flow, tax equity, and overall economic efficiency.

The main objective of the minimum tax is to ensure that no taxpayer is left out of the tax net. That is, even if a person or organization shows a loss or very little profit, they must pay a minimum tax on a certain basis. It is a way to prevent tax evasion and protect revenue. In Bangladesh, this minimum tax is mainly implemented in two ways.

First, the turnover-based minimum tax imposes a levy on gross receipts, irrespective of profitability. Currently, companies and institutions exceeding Tk 50 lakh in turnover and individuals exceeding Tk 4 crore are subject to this tax, with rates ranging from 0.1% to as high as 3% depending on the sector. For instance, tobacco and soft drink manufacturers face a 3% rate, mobile operators 1.5%, and most other sectors around 1%.

Second, Tax Deducted at Source (TDS), although legally designed as an advance tax, often functions in practice as a de facto minimum or even final tax. In theory, TDS should be adjustable against final tax liabilities. However, in reality, such adjustments are frequently limited or unavailable, particularly for businesses operating at a loss or with slim profit margins. As a result, taxes deducted at source effectively become non-refundable, locking in a tax burden regardless of actual income.

In many cases, TDS effectively serves as a minimum tax, ensuring that the government secures a certain level of revenue even when the taxpayer’s financial condition is unfavorable. A significant portion of taxes deducted or collected at source under various provisions, spanning Sections 88 to 139 of the Income Tax Act 2023, functions in this way.

Even if the final tax calculation suggests a lower liability, the amount already deducted or collected often remains unchanged, creating a structural mismatch and undermining fairness in the tax system.

This dual application creates a significant imbalance. A substantial portion of tax collected under multiple provisions of the Income Tax Act now carries the characteristics of minimum taxation. Consequently, businesses often face effective tax rates far exceeding statutory rates, sometimes by five to ten times. This is particularly damaging for credit-dependent enterprises, which may struggle to maintain liquidity, meet loan obligations, and sustain operations. The implications extend beyond individual firms, posing risks to the broader financial system, including banking sector stability.

Fundamentally, this structure deviates from the core principle of income taxation—that tax should be levied on net income, not gross receipts. By ignoring costs, losses, and the taxpayer’s ability to pay, the current system imposes what can only be described as economically punitive measures.

Moreover, the absence of a mechanism to carry forward excess minimum tax paid during loss-making periods further compounds the problem, effectively leading to elements of double taxation.

In contrast, most developed tax systems treat TDS strictly as an advance payment, fully adjustable against final liabilities. Even in neighboring economies like India, such adjustments are standard practice. Bangladesh’s partial and inconsistent integration of these systems has resulted in unnecessary complexity and diminished business confidence.

As the government prepares the national budget for 2026–27, there is a timely opportunity to recalibrate the tax framework. Several policy measures merit serious consideration:

Repealing the provision of minimum tax under Section 163, which conflicts with fundamental income tax principles and imposes disproportionate burdens.
Clearly redefining TDS as an adjustable advance tax, ensuring full reconciliation at the time of final assessment.
Rationalizing TDS rates, setting them at 2% for industrial and trading sectors, and 1% for service, advertising, and media sectors.
Reducing the turnover-based minimum tax rate to a uniform 0.5% to ease pressure on businesses.
Introducing a carry-forward mechanism to allow adjustment of minimum tax paid during loss-making periods against future profits.
Simplifying the overall tax structure to eliminate instances of multiple taxation on the same income stream.
Providing targeted relief or conditional exemptions for small and medium enterprises (SMEs), which are particularly vulnerable to cash flow constraints.
Revenue mobilization is undeniably critical for national development. However, it must not come at the expense of economic vitality. A tax system that is perceived as punitive or inequitable risks discouraging investment, stifling industrial growth, and undermining long-term competitiveness.

A balanced, transparent, and business-friendly tax regime is not merely desirable—it is essential. The upcoming budget presents a crucial opportunity to address systemic issues and lay the foundation for a more sustainable, growth-oriented fiscal framework. While ensuring revenue generation remains important, it is equally critical to foster a competitive and sustainable business environment.

The current structure of minimum tax and tax at source, combining features of advance, minimum, and partial final taxes, can act as a deterrent to investment, industrialization, and long-term economic growth. Therefore, the need of the hour is to revisit these mechanisms in the next budget and introduce a more balanced, fair, and investment-friendly tax system.

A US naval blockade of Iranian ports is likely to squeeze Iran’s oil output in the coming weeks but claims it will throw the Islamic republic into economic free fall remain premature, analysts say.

After weeks of bombing and counter-strikes, focus has shifted to the standoff in the Strait of Hormuz, which ordinarily carries around a fifth of the world’s oil and liquefied natural gas.

In response to Iran’s blockade of the strait since the start of the Middle East war, the US imposed a counter-blockade of the Islamic republic’s ports, a push to force its leaders into a compromise in peace talks.

That bid, however, looks set to fail, at least in the short term.

“If the blockade lasts for more than two or three months, it can cause more damage” to Iran, economic analyst and professor at Shahid Beheshti University in Tehran Saeed Laylaz told AFP.

“If Iran suffers any damage, the damage to the countries in the southern Persian Gulf will definitely be greater,” he added.

There’s a limit on how long Iran can bide its time, however.

Arne Lohmann Rasmussen, chief analyst at Global Risk Management said Iran “was expected to run out of storage capacity within approximately one month, but it may already be forced to shut in part of its oil production within a couple of weeks”.

‘COLLAPSING FINANCIALLY?’

Trump said Tuesday that Iran was “collapsing financially” under the blockade imposed by the US Navy on April 12, claiming that the country was “starving for cash”.

Treasury Secretary Scott Bessent said the blockade meant storage at Iran’s Kharg Island, the main export terminal through which most of the country’s crude is shipped, “will be full and the fragile Iranian oil wells will be shut in”.

Jamie Ingram, managing editor of Middle East Economic Survey (MEES), told AFP it was likely the timeline for Iran to hit its oil storage limits would be measured in “weeks rather than days”.

He added it was likely that “Iran will slightly reduce production before getting to the stage where storage constraints start to bite”.

According to analysis by oil expert Homayoun Falakshahi shared by energy intelligence firm Kpler, Iran’s crude production has already slowed since the start of the war.

Output fell by around 200,000 barrels per day in March to 3.68 million bpd and is expected to drop a further 420,000 bpd in April to about 3.43 million bpd, reflecting “the broader impact of export disruptions and refining constraints linked to the ongoing conflict,” Falakshahi said.

But Laylaz in Tehran said beyond the psychological effect of the blockade, the “real material effect has been small so far”.

Ingram said Kharg Island “shouldn’t be a particular bottleneck,” for Iran.

“This is the final storage facility used before oil is exported and Iran can divert crude oil to other facilities rather than straight to Kharg,” he said.

‘MUTUALLY ASSURED DISRUPTION’

The MEES expert also said Iran’s dependency on oil exports via Hormuz had “deepened due to the damage caused by US and Israeli strikes to other sections of the Iranian economy”.

“But Iran has also proven its ability to withstand huge oil-revenue declines during previous rounds of sanctions. I would not underestimate the regime’s resilience in this regard,” he added.

As the initial two-week truce between Iran and the US was set to expire Trump had said Tuesday he would maintain the ceasefire to allow more time for peace talks.

Iran said it welcomed the efforts by mediator Pakistan but made no other comment on Trump’s announcement, while vowing not to reopen Hormuz so long as the US blockade remains in place.

“It will take a long time before such economic pain forces Iran to compromise,” Ingram said, explaining it is “more likely economic disruption... pushes China into exerting more pressure on Iran to negotiate”.

Ali Vaez, Iran project director at the International Crisis Group, said “Iran’s economy was battered before the war, is contending with added strains caused during it, and now faces the combination of sanctions, seizures and potential strikes”.

“Iran’s leadership has previously shown a high threshold for pain even if the pressure on ordinary Iranians increases. It also likely calculates that its own efforts to subdue traffic through Hormuz act as a sort of mutually assured disruption,” he added.

Demand for rooftop solar systems across Europe has surged since the start of the Iran war, as households rush to shield themselves from soaring power prices triggered by the worst global energy disruption in history.

The ​conflict has pushed oil, gas and electricity prices sharply higher, hitting companies and households alike and accelerating efforts to find cheaper alternatives and reduce exposure to volatile energy ‌markets.

Solar is among those options, with demand from homeowners more than doubling for some industry players since the war began in late February, according to interviews with more than half a dozen energy equipment wholesalers and renewable utilities in Germany, Britain and the Netherlands.

It’s a timely boost for a technology that accounts for about a third of Europe’s total power capacity, but saw the pace of new installations dip last year for the first time in ​nearly a decade. Industry advocates argue Europe still needs to do far more to cut its reliance on imported oil and gas.

“The war has merely exposed the problem that has ​existed all along: energy dependency,” said Janik Nolden, co-founder of German privately owned solar equipment wholesaler Solarhandel24, adding European governments had been “walking into a trap”.

Solarhandel24 said net sales more than tripled in March to nearly 70 million euros ($82 million) from a year earlier, and are expected to triple again this month to ​as much as 60 million euros. The company plans to expand its workforce by about 85 people, roughly a third, to cope with demand.

To secure supply, Solarhandel24 has stocked up around half a ​million solar panels in recent weeks - a costly decision, Nolden said, but one he sees as worthwhile given the potential for net sales to rise to around 400 million euros in 2026 from about 250 million euros last year.

Germany’s Enpal is seeing a similar trend. The energy firm said orders rose 30 percent year-on-year in March to 130 million euros, while April was on track for a 33 percent increase to about 120 million euros, driven by rooftop ​solar installations.

“This is about European resilience,” said Enpal CEO and founder Mario Kohle. “We are seeing this trend in the defence sector too. Just as Europe must be able to defend itself, we must ​be able to supply our own energy.”

The financial figures from Solarhandel24 and Enpal have not been previously reported.

While aggregated installation data for Europe are not yet available, industry associations in Germany and the Netherlands have confirmed ‌a pickup ⁠in demand since the war began.

Executives say homeowners are increasingly opting for full systems combining solar panels - nearly 90 percent of which are supplied by China - with batteries and electric-vehicle wallboxes, allowing surplus power to be stored and used later.

That trend is also lifting demand for energy storage technologies, which Holland Solar’s Wijnand van Hooff says is seeing demand increases of 40 percent-50 percent.

“This cannot be explained by purely seasonal factors,” said Filip Thon of E.ON (EONGn.DE), , Europe’s largest energy network operator, which also sells rooftop solar systems. Customer requests, he said, have nearly doubled year-on-year.

A STRUCTURAL SHIFT?

Some executives also point to upcoming changes ​to Germany’s renewable energy law as an additional ​driver of demand for rooftop installations, which ⁠typically cost between 10,000 and 20,000 euros for an average family home.

The war-driven surge comes after the pace of new European solar installations slowed, in 2025, according to industry lobby SolarPower Europe, with weak residential demand a key factor following the phase-out of support schemes.

Shares in SMA Solar (S92G.DE), , the world’s third-largest ​solar inverter maker and one of the few remaining European equipment producers, have risen about 50 percent since the war began. The company has ​also reported an uptick in ⁠demand.

“We view the spike in demand as a structural shift that current geopolitical events are accelerating, not creating,” said Ed Janvrin, who heads the solar and heating business at Britain’s OVO Energy, adding April sales in the division were roughly 10 times higher than a year earlier.

Chinese solar manufacturers, however, say any war-related boost in global demand is unlikely to significantly ease the sector’s overcapacity, with China alone having enough ⁠manufacturing capacity to ​meet this year’s expected global demand nearly twice over.

Even so, the surge highlights how geopolitical shocks can rapidly reprice ​the value of renewables, said Jannik Schall, co-founder of German renewables firm 1Komma5Grad, noting that solar demand during the 2022 energy crisis had been even stronger.

“The recurring energy crises prove the renewables sector right.”

When the International Monetary Fund (IMF) released its latest World Economic Outlook (WEO) database on April 14, one data point quickly made its way through financial markets and newsrooms.

Bangladesh is projected to record a higher gross domestic product per capita than India in 2026, measured in current US dollars. The forecast puts Bangladesh at $2,911 per person against India at $2,812. The difference is small in absolute terms, but its symbolism is significant.

India’s economy, valued at $3,916 billion in 2025, is roughly eight times the size of Bangladesh’s $458 billion. It is also one of the most closely watched growth stories in the world. Yet on this narrow measure, the smaller neighbour appears set to edge ahead.

The reaction in India was swift. Kaushik Basu, former chief economist of the World Bank, described the development as "shocking". Indian commentators debated whether the figure reflected a deeper structural divergence or merely a statistical quirk.

The answer, as is so often the case with economic data, is: both.

Measured in current dollars, Bangladesh led India in per capita income for seven years from 2018.

India moved ahead in 2025 after the Bangladeshi taka weakened sharply. This is not without precedent.

Bangladesh was also ahead of India in per capita GDP between 1989 and 2002.

India then pulled in front for around 15 years before slipping below Bangladesh in 2018.

The rupee's own depreciation against the dollar in the subsequent period then swung the comparison back.

According to the latest projections, Bangladesh is set to move ahead in 2026 by roughly $100 per person.

The IMF expects India to regain the lead in 2027 and to remain ahead at least until 2031.

To understand why this measure is so volatile, consider the arithmetic.

GDP per capita in current dollars is calculated by converting each country's output into US dollars at the prevailing exchange rate.

When a currency depreciates — as both the taka and the rupee have done in recent years, though at different speeds — it compresses the dollar value of output regardless of how productive the underlying economy has become.

The crossing of the two lines in 2026, seen on any given screen, tells us something real: that exchange-rate dynamics now place the two economies' dollar incomes within touching distance of each other. It does not, on its own, tell us which population is better off.

The second measure complicates the picture considerably. The IMF also publishes GDP per capita adjusted for purchasing power parity (PPP), which strips out exchange-rate movements and instead converts output into a common "international dollar" based on what each currency can actually buy domestically.

On this basis, India leads Bangladesh by a wide margin — and always has in the modern era.

In 2025, India's PPP-adjusted GDP per capita stands at $11,789 — some 15 percent above Bangladesh's $10,271.

By 2031, the IMF projects the gap will widen to nearly 24 percent, with India reaching $18,485 against Bangladesh's $14,857.

Nearly 1.6 crore people in Bangladesh faced high levels of acute food insecurity in 2025, placing the country among the top ten nations with the largest number of people struggling to secure enough food, according to the latest Global Report on Food Crises.

The 2026 report, published by an alliance of UN agencies, the European Union and other partners, said that food conditions in those ten worst-affected countries are unlikely to improve this year.

Together, including Afghanistan, Myanmar and Pakistan, they accounted for two-thirds of the 26.6 crore people worldwide who experienced acute food insecurity last year.

The other countries on the list are the Democratic Republic of the Congo, Nigeria, South Sudan, Sudan, the Syrian Arab Republic and Yemen.

The report said chronic economic weakness continues to erode resilience at both household and national levels.

"Half of the world's poorest people live in five countries, three of which -- Bangladesh, the Democratic Republic of the Congo and Nigeria -- are in protracted food crises," it said.

Acute food insecurity occurs when one or more dimensions of food security, including availability, access, utilisation and stability, are disrupted to a degree that threatens lives or livelihoods.

Despite the scale of the challenge, Bangladesh recorded progress. The number of people facing acute food insecurity fell by 32 percent in 2025 compared with the previous year, with no major natural disasters reported.

The report, however, highlighted worsening conditions among forcibly displaced Myanmar nationals in two districts, amid a fresh influx of Rohingya refugees, flooding and cuts to humanitarian assistance.

Bangladesh is also listed among countries facing a moderate nutrition crisis, alongside Niger, parts of Nigeria and Sudan, and the Syrian Arab Republic, even as overall food security indicators improved.

Qu Dongyu, director-general of the UN Food and Agriculture Organization (FAO), said acute food insecurity had become structural rather than temporary. "Acute food insecurity today is not just widespread -- it is also persistent and recurring.”

Conflict remained the primary driver, accounting for more than half of all people facing severe hunger. More than 39 million people in 32 countries faced emergency levels of food insecurity, while the number experiencing catastrophic hunger had risen ninefold since 2016.

Children bore a heavy toll. In 2025, 35.5 million children were acutely malnourished, including nearly 10 million suffering from severe acute malnutrition.

Ricardo Pires, spokesperson for the UN Children's Fund (Unicef), warned that children with severe wasting faced heightened mortality risk, as weakened immune systems left them vulnerable to ordinarily non-fatal illnesses.

UN Secretary-General António Guterres, writing in the foreword, called for scaled-up investment in aid and an end to the conflicts driving the crisis.

The report also states that the outlook for 2026 remains bleak. Ongoing conflict, climate shocks, economic instability and Middle East-linked supply chain disruptions are expected to sustain critical food insecurity levels across multiple countries.

Bangladesh’s macroeconomic outlook is fragile as it faces three concurrent adverse external headwinds, including the Middle East crisis and the country’s impending graduation from the least developed country (LDC) category, said the Policy Research Institute (PRI) of Bangladesh yesterday.

Presenting the institute’s Monthly Macroeconomic Insights at its Dhaka office, Principal Economist Ashikur Rahman said uncertainty around US tariff policies is another factor casting a shadow over the economy’s prospects for a faster recovery.

“These shocks are feeding through energy prices, weakened trade flows, and supply chain disruptions, with broad economy-wide implications,” he said.

At the same time, pressure is building on the balance of payments amid weaker exports and higher energy costs, with limited policy buffers heightening overall vulnerability amid the US-Israel war on Iran.

Rahman noted that around 31 percent of Bangladesh’s energy imports originate from the Middle East, largely transiting the Strait of Hormuz. A study by Zero Carbon Analytics found that severe price shocks could raise the country’s energy bill by 40 percent to $16-$17 billion in the ongoing fiscal year 2025-26 (FY26).

The PRI economist noted that Bangladesh has seen a fragile recovery over the 18 months to February 2026, with reserves rising from about $18 billion to $30 billion, inflation easing to 8-9 percent, and deposit growth strengthening.

“Yet, this recovery was underpinned by core vulnerabilities,” said Rahman, noting growth slowed to 3 percent in the second quarter of FY26, the weakest since Covid. Non-performing loans stand at around 30 percent, dampening private credit growth to 6 percent, while limited fiscal space is pushing the government toward costly bank borrowing.

Against this backdrop, Rahman warned that rolling back reforms now would be self-defeating. “If we step back from economic reforms at this stage, it would be an economically suicidal decision. It must be treated as a national economic imperative.”

The reforms, he stressed, should not be framed as conditions set by the International Monetary Fund (IMF). “These are essential for strengthening our own economy and ensuring long-term growth.”

ICC Bangladesh President Mahbubur Rahman, speaking as the chief guest, said persistent uncertainty is making it harder for businesses to plan.

He pointed to a disconnect between policy direction and business expectations as a drag on private investment — and, by extension, on foreign direct investment. “In Bangladesh, politics and business often operate in parallel rather than in coordination. In reality, they should be deeply interconnected. Government, businesses, and investors are part of the same ecosystem.”

Besides, he said weak domestic investment is also constraining foreign direct investment inflows. “Local investment is not picking up, and naturally that raises a question: how will foreign direct investment come if domestic investors themselves are hesitant? Even machinery imports are declining because investors lack confidence.”

Uncertainty over energy supply and financial sector risks are key concerns, he said. “There is deep uncertainty among investors about whether they will get gas or electricity tomorrow. This lack of predictability is holding back decisions.

“On top of that, fears of becoming loan defaulters and difficulties in accessing finance are further increasing risk perception.”

Khondokar Shakhawat Ali, a visiting research fellow at the BRAC Institute of Governance and Development at BRAC University, stressed that economic stability requires structural reforms rather than short-term fixes.

He also pointed to the close nexus between political actors, bureaucrats, and sections of the private sector, saying, “It has blurred lines of responsibility and made reform more urgent.”

With Bangladesh facing both internal and external shocks, he cautioned that without prudent fiscal management, the country risks sliding into a deeper economic crisis.

Meanwhile, highlighting rising external risks, PRI Chairman Zaidi Sattar said geopolitical tensions, particularly around the Strait of Hormuz, are posing systemic risks to global supply chains and fertiliser trade.

“Rising food, fuel, and fertiliser prices are pushing up import costs and intensifying inflationary pressures,” he said.

On Bangladesh’s LDC graduation, he said preparedness remains limited due to gaps in export diversification and competitiveness.

He also noted slow reform progress, stressing that “comprehensive tax reform is essential to strengthen domestic resource mobilisation.”

Former National Board of Revenue (NBR) chairman Muhammad Abdul Mazid said revenue reform is essential for economic stability, warning that delays will deepen fiscal risks.

“We must stop thinking that reforms are imposed from outside; these are reforms we need for our own survival,” he said, adding that continued failure to meet revenue targets is pushing the government into a cycle of borrowing that weakens the financial system.

“You cannot fix the economy without fixing the revenue system. This is where the foundation lies,” he said, noting that while reforms take time, postponing them will only raise long-term costs.

“If the economic ‘bleeding’ continues and we fail to act, recovery will become extremely difficult,” he added.

Top business leaders have urged the market regulator to be flexible on the use of initial public offering (IPO) funds for loan repayment, including allowing repayment of rescheduled loans amid a challenging business climate.

They made the request at a meeting organised by the Bangladesh Securities and Exchange Commission (BSEC) at its Dhaka office yesterday to discuss the use of IPO proceeds.

Syed Nasim Manzur, managing director of Apex Footwear Limited, said many countries, including neighbouring ones, do not impose restrictions on the use of IPO funds for loan repayment.

Considering global standards, the scope for using IPO proceeds to repay loans could be expanded, he added.

In 2025, the regulator introduced the Public Offer of Equity Securities Rules, 2025. Under the new rules, companies may use up to 30 percent of IPO proceeds for debt repayment or investment, subject to conditions.

For loan repayment, the borrowing must have been used for a company project, business, machinery, renovation or expansion, and an auditor report must confirm proper utilisation of the funds.

The loans being repaid cannot be classified or rescheduled. In other words, they must not be overdue or deferred because of repayment problems.

These provisions are stricter than those under the 2015 rules, which allowed up to one-third of IPO funds to be used for debt repayment or working capital without linking the loans to specific projects or imposing conditions on their classification status.

Riad Mahmud, president of the Bangladesh Association of Publicly Listed Companies, said even well-performing companies may incur losses because of global crises and economic challenges, and may have rescheduled loans.

It is not sufficient to follow strict policies based only on ideal situations; flexibility is also necessary considering real-world circumstances, he said.

Taking into account economic conditions and global crises, he called for allowing the repayment of rescheduled loans using IPO proceeds.

Mominul Islam, chairman of the Dhaka Stock Exchange, also spoke in favour of allowing IPO funds to be used for loan repayment.

Khondoker Rashed Maqsood, chairman of the BSEC, thanked stakeholders for their opinions and proposals. He said the regulator would evaluate their views and recommendations, adding that one of its key mandates is to protect investor interests in the capital market.

He said, “The commission will ensure overall market development while safeguarding investor interests.”

Maqsood also said efforts are ongoing to bring fundamentally strong companies to the capital market.

Tapan Chowdhury, chairman of the Central Depository Bangladesh Limited and managing director of Square Group, said regulators must assess whether IPO funds are used properly and whether they genuinely benefit the company or project.

He noted that many large and reputed groups in the country have highly ambitious projects, and merely relying on the group’s reputation should not justify using IPO proceeds to repay loans for such projects.

Abdul Hai Sarker, chairman of the Bangladesh Association of Banks, said a strong and developed capital market is an effective solution for maintaining competitiveness in the global market and ensuring economic growth.

He called for the proper development and expansion of the market.

Mashrur Arefin, chairman of the Association of Bankers Bangladesh, said companies should have an opportunity to restructure capital by repaying loans taken for productive or expansion purposes using IPO funds.

Considering the country’s economic conditions and various crises, he said loans that have not been rescheduled more than twice could be allowed under such provisions, while maintaining appropriate control mechanisms.

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry, Dhaka, said, “In the country, short-term deposits are being used to finance long-term investments. This practice should be discouraged, and long-term financing should be ensured through the capital market. To achieve this, policy and regulatory alignment are necessary.”

AKM Habibur Rahman, chairman of the Chittagong Stock Exchange, Saiful Islam, president of the DSE Brokers Association of Bangladesh, and senior BSEC officials also attended the meeting.

Reinstating the package-VAT system to bring marginal businesses under the tax net is now under active consideration of the government, as compliance with the existing value-added-tax regime remains weak, sources say.

Officials at the National Board of Revenue (NBR) say the move is being made targeting the small and informal businesses that struggle to maintain proper accounts under the current VAT framework.

Package VAT is a fixed monthly amount paid by businesses, typically through their trade associations. The system was abolished in June 2019 following the introduction of the new VAT and Supplementary Duty Act and the VAT Online Project, which aimed to digitise tax collection.

However, NBR officials now acknowledge that bringing businesses in growth centres and retail hubs onto the VAT net has proven difficult, leading to significant revenue losses from the large informal sector.

The existing system, too, has been criticised for giving "discretionary powers" to field-level VAT officials to assess sales and determine payable value-added tax-- often resulting in harassment and allegations of corruption.

"We are overhauling the VAT law to make compliance easier for small and medium enterprises," NBR Chairman Abdur Rahman Khan told members of the Economic Reporters Forum (ERF) at a pre-budget meeting with Finance Minister Amir Khosru Mahmud Chowdhury. Personalfinance advice

"We have not yet been able to effectively implement the standard 15-percent VAT rate. Now we are compiling data on marginal and new SMEs to bring them under a fixed VAT system," he says.

The VAT base remains significantly smaller than the income-tax base, with only about 0.8 million VAT-registered entities compared to 12.8 million income taxpayers, Mr Khan points out the mismatch.

Business leaders have welcomed the proposed move but urged caution in setting the VAT amount.

Md Zahirul Haque Bhuiya, Secretary-General of the Bangladesh Dokan Malik Samity, also acknowledges that the government currently earns little revenue from sectors previously covered under package VAT. Bangladeshtravel guideBangladesh market analysis

However, he warns that excessive rates could discourage compliance.

"When the package VAT was increased sharply -- from Tk 4,200 to Tk 28,000 annually -- many small businesses dropped out of the system," he says .

Efforts to digitise VAT collection through Electronic Cash Registers (ECR) and the Electronic Fiscal Device Management System (EFDMS) have also failed to significantly improve revenue mobilisation from small businesses, he adds.

NBR data show that package -VAT collection had declined steadily before its abolition.

Revenue stood at Tk 23.81 billion in the fiscal year 2015-16 but dropped to Tk 18.91 billion in FY2016-17 after the rate was doubled. Collection had reached a rock-bottom Tk 11.75 billion until February of FY2018-19.

Under the previous system, VAT was fixed based on business location. Annual rates were set at Tk 28,000 for Dhaka and Chattogram city corporations, Tk 20,000 for other city corporations, Tk 14,000 for district towns, and Tk 7,000 for other areas.

Earlier rates ranged between Tk 3,600 and Tk 14,000 before being doubled in FY2016-17.

Business owners allege that corruption among field-level officials also contributed to the decline in compliance.

Solaiman Parsee, a trader in Old Dhaka, says many businesses were willing to pay VAT but were "discouraged by officials seeking bribes".

"A section of VAT inspectors often persuades traders not to pay the official amount and instead demands informal payments," he says about the deprivation of state exchequer by such taxmen who line their own pockets.

He argues that the fixed VAT is not burdensome, noting that the highest annual rate translates to around Tk 76.71 per day.

He also suggests making Business Identification Number (BIN) mandatory to prevent misuse of the system.

However, some experts would like to dislike the reintroduction of package VAT over again.

Dr Abdur Rouf, chairman of the VAT Forum, says the government should prioritise helping small businesses grow instead of imposing fixed taxes.

He also recommends scrapping the turnover tax, arguing that it generates minimal revenue while adding to compliance burdens.

He opines that rather than introducing package VAT, "it shall be much expedient to remove the existing Turnover Tax since collection of TT is less than one -core taka annually, a very insignificant amount".

"Then a good number of SMEs shall go beyond VAT net but government will lose nothing."

He further suggests reduction in trade VAT to 3-5 per cent and abolition of Advance Tax at import stage which is trade VAT in other words.

He thinks introduction of package VAT will seriously undermine the objective of standard VAT and give rise to manifold complications at the field level without any significant impact on VAT collection.

Citing three major economic challenges, the government has prepared its position paper ahead of a United Nations hearing on Bangladesh’s request to defer its graduation from the least developed country (LDC) category.

In a virtual meeting of the United Nations Committee for Development Policy (UNCDP) on April 29, Bangladesh will seek a three-year deferral of its scheduled graduation in November this year.

Dhaka plans to highlight a serious gap in preparedness, incomplete core reforms and the economic fallout from the US-Israel war on Iran as key reasons for postponement.

In addition, Bangladesh will raise concerns over vulnerabilities in the financial sector, weaknesses in the banking system, an export slowdown due to volatile global supply chains, high interest rates and an uncertain business and investment climate, said Md Abdur Rahim Khan, additional secretary to the commerce ministry.

Khan, who is also in charge of the commerce secretary, told The Daily Star over the phone that Bangladesh’s case for deferment has strengthened after Nepal, another South Asian LDC set to graduate, also applied to the UN for a three-year extension.

Bangladesh, Nepal and Lao PDR are scheduled to graduate from LDC status on November 24 this year. However, Bangladesh and Nepal have now sought to delay the transition until 2029, citing domestic and external economic pressures.

Earlier on February 19, the newly elected government sent a letter to Jose Antonio Ocampo, chair of the UNCDP, requesting that the preparatory period be extended until November 24, 2029, mentioning that more time is needed to ensure readiness.

Following Bangladesh’s request, the UNCDP discussed the issue at its annual meeting in February and agreed on a process to assess the proposal.

The UNCDP has now called a public hearing on Bangladesh’s request on April 29. After the hearing, the committee will submit its recommendations to the United Nations Economic and Social Council (ECOSOC) in June.

ECOSOC will then forward its assessment to the United Nations General Assembly (UNGA), which is scheduled to meet in September. The final decision on the deferment will be taken through a vote at the UNGA.

A UN assessment report last month said Bangladesh still faces serious gaps in its readiness for graduation, as its economy continues to be affected by both domestic and international shocks, including the US-Israel war on Iran.

The report highlighted a series of disruptions between 2017 and 2026, including climate vulnerability, the Rohingya crisis, a prolonged macroeconomic slowdown that predated the regime change, the Covid-19 pandemic, the Russia-Ukraine war, inflation, and pressure on the balance of payments.

It also noted that while Bangladesh meets all three criteria for graduation, significant risks persist, including the loss of trade preferences, fiscal and financial vulnerabilities and weak institutional coordination.

The report stressed the need for urgent reforms, stronger implementation capacity, adequate policy space and a whole-of-society approach to ensure a smooth and sustainable transition.

It added that a difficult political changeover and prolonged macroeconomic stress have eroded socio-economic gains, increasing risks linked to graduation.

Rising import costs for fossil fuels have created operational constraints, with gas shortages worsening due to the Middle East conflict, the report said. Economic growth slowed from 7.1 percent in FY22 to 3.5 percent in FY25, weakening momentum ahead of graduation.

Inflation has outpaced wages, pushing millions into hardship and vulnerability.

Private investment has also weakened, with capital machinery imports falling from $5.1 billion to $2.8 billion during the 2019-2024 period. The labour market has also come under pressure, with nearly 1.9 million jobs lost between 2023 and 2024, disproportionately affecting women.

The Bank Resolution Act-2026, passed with new provisions added overnight, is effectively rehabilitating bank looters and putting the entire banking sector at risk, economic experts, academics, and activists said yesterday.

Clause 18(a) of the law could allow those who previously looted the sector in a planned manner to regain ownership, the speakers warned at a roundtable organised by Voice for Reform at the BDBL building in Karwan Bazar, Dhaka.

Badiul Alam Majumdar, secretary of Shushashoner Jonno Nagorik (Shujan), noted that many of those who looted the sector are yet to be brought to justice.

He said all masterminds behind the takeover of Islami Bank Bangladesh, including S Alam, should be held accountable.

He outlined three steps needed to put the banking sector on a firm footing. First, identifying and ensuring exemplary punishment for perpetrators of banking fraud. Second, implementing systemic reforms such as cashless transactions to prevent recurrence. Lastly, completing institutional reforms, including making Bangladesh Bank an independent constitutional body.

AKM Waresul Karim, dean of the School of Business and Economics at North South University, said the government had resorted to “very low-grade tactics” over the proposed ordinance.

He criticised the Bank Resolution Act as one of its provisions allows shareholders who held ownership immediately before a bank was placed under resolution to apply for reinstatement.

He said the provision blocks the return of long-standing institutional owners like Kuwait Finance House while opening the door for those who acquired ownership by creating “pressure through the DGFI” or through other unethical means.

Toufic Ahmad Choudhury, former director general of the Bangladesh Institute of Bank Management (BIBM), called for bringing willful defaulters to book, saying that no resolution measures would yield results unless those responsible for the current crisis are punished.

He also cautioned that rescheduled loans should not have their default status changed until fully repaid – a rule routinely flouted as elections approach, when defaulters reschedule debts.

“Through this process, they remove themselves from the list of defaulters and become ‘regular’ borrowers. Subsequently, they take the opportunity to secure hundreds of crores of taka in additional loans from the same banks,” he said.

Shawkat Hossain Masum, head of online at Prothom Alo, said it was inevitable that some banks in the country would reach the point of insolvency.

He stated that in November 2022, the central bank claimed that there were no problems in the banking sector, even though the real situation was more or less known to everyone. “It was not that Bangladesh Bank was unaware; rather, it was either helpless in the face of politicisation, complicit in it, or both.”

He claimed that the interim government opted for merging troubled banks as “no government wants to bear the stigma” of closing banks.

Considering various realities, he said merging two weak banks and making the initiative successful is already very difficult. “Expecting five weak banks to merge and succeed together is a very remote aspiration.”

Meanwhile, Professor Mushtaq Khan of SOAS University of London said the interim government should have nationalised or confiscated assets of individuals involved in bank looting.

“Failing to do so was a major mistake,” he said, noting that the manner of the looting makes recovery through collateral seizure difficult.

Sarwar Tusher, a joint convener of the National Citizen Party (NCP), accused the current BNP-led government of setting “extreme examples of politicisation” in the economy within two months of taking office.

Criticising BB Governor Md Mostaqur Rahman, the NCP leader said the governor was a “politically affiliated individual” who reportedly has “past links with S Alam”.

He went on to allege that several ministers of the new government have connections with the controversial business group, warning that a major crisis in the banking sector, similar to that in the energy sector, may be imminent.

Shams Mahmud, former president of the Dhaka Chamber of Commerce & Industry, said Islami Bank was captured through the stock market.

Instead of direct acquisition as entrepreneurs, the bank’s shares were quietly purchased through various anonymous groups and later transferred to a specific group, he added.

“Even if the front door is closed through banking laws, such looting cannot be stopped if the back door, like the stock market, remains open,” said Mahmud.

Asif Khan, president of CFA Society Bangladesh, suggested issuing long-term bonds to depositors as an immediate measure to heal the deep wounds in the banking sector.

He said that while small depositors could be fully repaid, larger depositors might need to accept some “haircut,” or partial losses.

Bangladesh’s mobile and broadband internet services rank among the worst in the world despite a large subscriber base, and a connectivity-led reform plan is being prepared to address the challenge, Rehan Asad, the prime minister’s adviser on telecom and ICT, said yesterday.

Speaking at a seminar titled “New Telecom Policy: Expectations of Entrepreneurs”, organised by the Telecom and Technology Reporters Network Bangladesh, he said the government sees better connectivity as the key to solving long-standing structural problems in the sector.

“Nothing is more important than connectivity for this government. And that connectivity means both mobile and broadband services. It is not either-or -- it is both,” he said.

Asad said Bangladesh is among the top 10 countries by mobile subscriptions, but service quality remains very poor.

“Even in South Asia, Nepal and Bhutan are ahead of us,” he said.

He added that broadband services are also weak. “In broadband, we are in an equally bad or worse position -- 141st out of 153 countries in terms of service quality,” he said.

“These are not my findings. They come from global reports by GSMA and the International Telecommunication Union,” he added.

He said the government plans to fix these problems by rapidly expanding mobile and broadband infrastructure.

“We want to connect 90 percent of the population with 5G and provide 100 Mbps internet to 90 percent of users,” he said.

He said the goal is to ensure consistent internet service across both urban and rural areas, so users no longer face uncertainty in accessing basic connectivity.

The second priority is to build a unified digital ecosystem through a nationwide digital identity system.

He explained that each citizen will receive a digital ID linked to a digital wallet that can connect with banking and mobile financial services.

The government is studying global models such as Singapore’s Singpass and Estonia’s digital system, with plans to begin rollout within the next 12 to 18 months.

The third priority is to turn Bangladesh into an AI-enabled economy, he said, adding that artificial intelligence will be introduced in education and industry.

The fourth priority is reforming the telecom tax system.

“When someone recharges Tk 100, they receive only Tk 62 worth of service. The remaining Tk 38 goes to the government,” he said.

“We want to examine the whole value chain so that a person can receive Tk 80 to Tk 90 worth of service.”

He added that Bangladesh is the third-largest collector of telecom taxes globally, which also affects affordability, including access to smartphones.

Asad said the reforms will require coordination between industry players and government agencies, and that discussions with stakeholders are already underway.

Not all problems will be solved immediately, he said, adding that the current work marks the start of a longer reform process.

Sumon Ahmed Sabir, deputy managing director of Fiber@Home, said at the event that policies and guidelines enacted by the interim government unfairly allowed foreign entities to obtain licences across multiple layers.

“The cross-layer empowerment of foreign entities could ultimately lead to ‘super-dominance’ in mobile infrastructure by one or two companies,” he said.

He also warned of risks to national security and data governance.

Some representatives of local companies at the event also alleged that the Bangladesh Telecommunication Regulatory Commission (BTRC) formulated policies and guidelines without adequate consultation with industry stakeholders.

Md Emdad Ul Bari, chairman of the BTRC, stated that their claims were unfounded.

BTRC had conducted extensive consultations with industry players, academia, and government bodies during the policy formulation process, he said.

Bari added that the primary objective of the regulator was to ensure that the policies serve the industry as a whole.

He also noted that the guidelines and policies are currently being reviewed again, in consultation with the newly elected government.

Stocks closed the week marginally higher, supported by bargain hunting in beaten-down equities, even as record-high fuel price hikes and persistent Middle East tensions cast a shadow over investor sentiment.

The benchmark indices managed to eke out gains as selective accumulation of undervalued stocks by tactical investors helped cushion broader market weakness.

Analysts noted that while geopolitical uncertainties continued to cloud the near-term outlook, resilient participation signalled underlying confidence in the market's medium-term trajectory.

The positive close came despite a significant headwind: the government on Saturday announced steep increases in fuel prices, pushing them to historic highs. Diesel was raised by Tk 15 per litre, octane by Tk 20, petrol by Tk 19, and kerosene by Tk 18, a move expected to exert inflationary pressure across supply chains and household budgets.

Despite energy price hike, the opportunistic investors engaged in bargain hunting while closely monitoring developments around the Middle East tensions.

The market opened the week on a cautious note, with the first two sessions closing lower as traders digested the fuel price shock and lingering uncertainty surrounding Middle East negotiations. However, sentiment pivoted mid-week following early indications of progress in ceasefire discussions.

Of the five trading sessions, the final three closed in positive territory, underpinned by renewed interest in high-quality large caps. Selective positioning in December-closing companies ahead of expected earnings announcements also supported the recovery.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) finally rose 42 points or 0.79 per cent to close at 5,299, after remaining flat the previous week.

The DS30 index, comprising blue-chip stocks, gained 25 points to close at 2,015, while the DSES index, tracking Shariah-compliant securities, edged up 0.21 point to 1,067.

Analysts said any tangible progress in US-Iran negotiations could restore investor confidence and trigger a short-term rally.

According to EBL Securities, the market demonstrated resilience with sustained two-way participation throughout the week. Still, investors largely maintained a cautious stance amid evolving macroeconomic and geopolitical developments.

The ongoing corporate earnings season is expected to play a key role in determining near-term market direction. Strong earnings, especially from banking and pharmaceutical sectors, could attract fresh investment, said the stockbroker.

Selective gains in blue-chip stocks, including BRAC Bank, City Bank, Asiatic Laboratories, Eastern Bank and Power Grid Company of Bangladesh, largely contributed to the index rise, jointly adding more than 27 points to the benchmark index.Bangladesh economic statistics

Market liquidity improved notably during the week. Total turnover on the DSE stood at Tk 45.16 billion, up from Tk 32.7 billion in the previous week, aided by an additional trading session.

Accordingly, average daily turnover rose 10 per cent to Tk 9.03 billion, compared to Tk 8.18 billion a week earlier.

Sector-wise, the engineering sector dominated turnover with 17 per cent share, followed by textile (13.4 per cent) and general insurance (12.2 per cent).

Market breadth remained positive, with 194 issues advancing, 168 declining and 35 remaining unchanged out of 390 traded securities. Among sectors, general insurance posted the highest gain of 5.8 per cent, followed by power, telecom, food, non-bank financial institutions and banking.

City Bank topped the turnover chart with shares worth Tk 1.6 billion changing hands, followed by Dominage Steel, Acme Pesticides, Khan Brothers and Summit Alliance Port.

The Chittagong Stock Exchange also closed the week slightly higher. Its All Shares Price Index (CASPI) rose 70 points to 14,832, while the Selective Categories Index (CSCX) gained 52 points to close at 9,093.

The port city bourse recorded a turnover of Tk 1.46 billion, with 48.4 million shares and mutual fund units traded during the week.

The European Union and United States signed an agreement Friday to coordinate on the supply of critical minerals needed for key industries including defense, as China's dominance becomes a growing concern.

The pact marks a rare embrace by President Donald Trump's administration of the role of the EU, which it often berates as it instead champions right-wing populists within Europe.

Flexing its muscle at times of tension, Beijing has restricted exports of critical minerals needed for products including semiconductors, electric vehicle batteries and weapons systems.

"The overconcentration of these resources, the fact that they're dominated by one or two places, is an unacceptable risk," US Secretary of State Marco Rubio said as he signed a memorandum of understanding with EU trade chief Maros Sefcovic.

Sefcovic told a separate press briefing that the agreement "formalizes our partnership across the entire value chain, from exploration and extraction to processing, refining, recycling and recovery."

On concerns that China could retaliate against a potential critical minerals deal involving multiple parties, Sefcovic said: "For us, it's really a matter of economic security. It's a matter of overcoming dependencies."

From recent experience, "we know how dependencies could be expensive, and we have a huge price tag for being dependent on the sources of our fossil fuels," he added.

"We simply want to learn from that experience and have a much more diversified portfolio of suppliers," Sefcovic said.

Rubio noted that the United States and the EU combined are "the largest customers and users" of critical minerals.

"We have to make sure that these supplies and these minerals are available for our futures and in ways that are not monopolized in one place or concentrated heavily in one place," Rubio added.

An action plan said that the EU and United States would explore setting minimum prices on critical minerals -- effectively preventing China or other outside powers from flooding the market with inexpensive exports.

They will also look at coordinating any subsidies and stockpiles of critical minerals, and could coordinate joint standards to ease trade across the Western world, and together invest in research.

The US Trade Representative's office said this plan will be the main mechanism to "coordinate trade policies and measures on critical minerals supply chains with a view to concluding a binding plurilateral agreement on trade."

The Trump administration has previously called for a preferential trade zone among allies on critical minerals.

Washington has also unveiled critical minerals action plans with Mexico and Japan, alongside a supply framework with Australia and others.

A surfeit of 'high-powered' money in the economy stokes concern about inflation upturn as reserve money more than doubled in terms of year-on-year growth as of February.Economic analysis reports

The central bank of Bangladesh has injected Tk 200 billion in printed money into

economy recently to feed government expenditure needs, economists say.

Bangladesh Bank officials, however, play down such concern as they claim the regulator has got a stronger rise in its net foreign assets (NFA), including foreign- exchange reserves, during the current fiscal year.

The increase in reserve, dubbed 'high-power money', signifies a sharp expansion of liquidity on the money market. Data released from the central bank show reserve money grew 13.35 per cent in February 2026, up from 6.16 per cent in the same month a year earlier.

The BB attributes the increase largely to a stronger rise in its net foreign assets, including foreign-exchange reserves, during the fiscal year 2025-26, compared with only a marginal increase in the previous year.

Reserve money is also referred to as the monetary base that comprises currency in circulation and commercial banks' reserves held with the central bank.

It forms the foundation of the broader money supply and can have significant implications for inflation and credit conditions, economists explain.Bangladesh economic statistics

People familiar with the developments told The Financial Express that the recent surge in the net foreign asset reflects sizeable dollar purchases by the Bangladesh Bank.

The central bank bought more than $5.50 billion from the market during the fiscal year, boosting its foreign-asset holdings and in turn expanding reserve money.

They also say inflows of foreign grants and assistance from some international lenders, for example, the World Bank and the Asian Development Bank, also contributed to the rise in net foreign assets in the state treasury.

Some economists strike a note of caution that the increase in high-powered money could add fuel to inflationary pressures if not managed carefully.

"We believe the situation remains under control," says Dr Md Ezazul Islam, director- general of Bangladesh Institute of Bank Management.

He says a potential increase in private-sector imports in the coming months could help moderate reserve-money growth.

Others appear more concerned about the inflationary impact.

"This helps explain why inflation is not easing," says Dr M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh.Financial news subscription

He adds that the central bank has recently injected around Tk 200 billion in the economy, amplifying liquidity through multiplier effects and contributing to persistent price pressures.

Prime Bank PLC has signed a $30 million term-loan agreement with the Opec Fund for International Development (Opec Fund), an international development finance institution.

The strategic collaboration is expected to significantly enhance Prime Bank’s capacity to support critical trade finance requirements across the country’s small and medium enterprise (SME), agriculture, and corporate sectors.

Faisal Rahman, chief executive officer (current charge) of the bank, and Abdulhamid Alkhalifa, president of the Opec Fund, signed the agreement in Dhaka recently, according to a press release.

Commenting on the partnership, Alkhalifa said, “MSMEs and agribusinesses play a vital role in jobs, food security, and economic resilience in Bangladesh, yet many still struggle to access trade finance.”

“Our partnership with Prime Bank will help unlock new opportunities, diversify exports, and strengthen the country’s private sector. This loan builds on our long-standing collaboration and reflects our commitment to inclusive, sustainable growth,” he added.

Rahman said, “We are delighted to enter into this strategic partnership with the Opec Fund. The three-year expandable term-loan facility will meaningfully enhance our capacity to support the trade financing needs of our valued clients.”

“This collaboration comes at a critical time when businesses are navigating uncertainties in the global economic landscape,” he added.

The Opec Fund’s support reinforces our relationship and reflects its strong confidence in Prime Bank’s governance, operational resilience, and future ambitions in supporting the national economy, the release added.

The facility, structured as a term-loan, will be provided to Prime Bank’s offshore banking unit by the Opec Fund.

It carries an initial tenor of one year, with a provision for extension up to three years.

This financing is expected to strengthen Prime Bank’s trade finance portfolio, providing much-needed stability and support to Bangladeshi businesses navigating complex global economic headwinds.

US consumer sentiment fell to a record ​low in April as households shrugged off a ceasefire in the war with Iran, remaining focused on the inflation ‌fallout from the conflict.

The University of Michigan's Surveys of Consumers said its Consumer Sentiment Index dropped to a final reading of 49.8 this month, an all-time low. The reading was a slight improvement, however, from the 47.6 reported earlier in the month.

Economists polled by Reuters had forecast the index at 48.0. It was at 53.3 ​in March. The deterioration in sentiment was across political party affiliation, and among consumers with investments in the stock market.

The Iran war ​has disrupted shipping in the Strait of Hormuz, boosting the price of oil, and ultimately the cost of gasoline ⁠and diesel. Prices for other commodities, including fertilizers, petrochemicals and aluminum, which will soon impact consumers, have also surged.

Tehran effectively closed the strait ​after the start of the war on February 28. President Donald Trump this week indefinitely extended the ceasefire with Iran, though a US Navy blockade ​of Iranian ports remained in effect.

"The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices," said Joanne Hsu, the director of the Surveys of Consumers. "In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers."

GASOLINE AND DIESEL ​PRICES INCREASE

The national average retail gasoline price has hovered above $4 a gallon this month, with diesel well above $5 a gallon, data from the US ​Energy Information Administration showed.

A Reuters/Ipsos poll on Friday showed a clear majority of Americans blamed Trump for surging gasoline prices, which are weighing on his Republican Party ahead ‌of November's ⁠congressional midterm elections.

Expensive diesel is likely to raise prices of goods transported by road. Economists said while the correlation between consumer sentiment and spending was weak, they expected households, especially lower-income groups, to scale back on consumption.

"We expect the hit to real disposable income growth from higher gas prices will slow consumption growth," said Grace Zwemmer, a US economist at Oxford Economics. "The impact will be mostly felt by low- and middle-income households, ​since a larger share of their ​overall spending goes toward gasoline."

The ⁠survey's measure of consumer expectations for inflation over the next year jumped to 4.7 percent this month from 3.8 percent in March. April's reading exceeded levels that prevailed in 2024 and remained well above the 2.3 percent-3.0 percent range seen ​in the two years before the COVID-19 pandemic.

Consumers' expectations for inflation over the next five years climbed ​to 3.5 percent from 3.2 percent ⁠last month.

Higher inflation expectations added to a survey from S&P Global on Thursday showing a measure of prices charged by businesses for their goods and services jumped in April to the highest level in nearly four years in strengthening financial market expectations that the Federal Reserve would probably not cut ⁠interest rates ​this year.

"More pain will come as higher transportation costs are passed along for food, ​appliances, toys and every other item that travels on a ship, car or plane," said Heather Long, chief economist at Navy Federal Credit Union. "Sentiment won't improve until the Strait of ​Hormuz is open and there is a permanent end to the conflict."

Three years after launch and with 99 percent of its budget unspent, a nearly Tk 1,700 crore customs modernisation project is set to be presented to the Executive Committee of the National Economic Council (Ecnec) today with a proposal to extend its deadline and raise costs by nearly 40 percent.

The Customs Modernisation and Infrastructure Development project was launched in April 2023 with World Bank (WB) financing to modernise key customs offices, including Chattogram, Benapole and Dhaka.

It was scheduled for completion by March 2026. As of June 2025, only Tk 5.14 crore had been spent of the original Tk 1,686 crore budget, of which Tk 1,475 crore was a WB loan.

Although Tk 113 crore has been allocated in the current fiscal year, the government is now seeking to extend the project’s duration and increase its cost.

A senior planning ministry official said a revised proposal has been listed for presentation at today’s scheduled Ecnec meeting.

The proposal, seen by The Daily Star, recommends increasing the project cost by 39 percent to Tk 2,344 crore, with the WB loan increasing by 34 percent, or Tk 507 crore. It also proposes extending the deadline to June 30, 2028.

The proposal attributes the cost increase to revisions made at the detailed design stage, after the initial estimate was based on conceptual design.

The earlier exchange rate assumption of Tk 102 per US dollar has been revised to Tk 122. Rising construction rates and higher VAT and tax rates have also contributed to the escalation.

At present, Dhaka Customs handles large volumes of air freight and courier consignments, Chattogram Customs manages 90 percent of the country’s import-export activity, and Benapole Customs oversees the bulk of land trade.

The project will introduce modern infrastructure and technology at these offices to speed up import-export operations, reduce tax evasion, and strengthen the detection of money laundering.

Planned works include construction of office buildings, laboratories, warehouses and residential facilities at Chattogram Customs House, as well as a new building for the Customs, Excise and VAT Training Academy. Baseline, midline and endline time-release studies will be conducted at major customs stations.

A tariff policy implementation plan will also be prepared, the existing tariff structure reviewed, and the feasibility of tariff reforms assessed using ASYCUDA World, National Single Window and Automated Risk Management System software.