The government is set to backtrack from its plans to reintroduce a wealth tax and impose a first-ever advance income tax (AIT) on motorcycles and battery-run auto-rickshaws in the upcoming budget for fiscal year 2026-27, according to officials familiar with the matter.

The development follows Prime Minister Tarique Rahman’s directives to scrap the proposed levies, they said.

The planned AIT sparked public backlash and street demonstrations by motorcycle owners and ride-share drivers. Such pressure might have contributed to the reversal, finance ministry officials said. On the wealth tax, officials did not disclose specific reasons for the decision but hinted that political considerations may have played a role.

“We worked extensively on the wealth tax and developed what we believe was one of the most comprehensive proposals aligned with global standards. However, the government did not accept it,” said a senior official of the ministry, requesting anonymity.

The proposed wealth tax had been designed to be calculated on net wealth declared in tax returns, given the difficulties in assessing market values of assets. The National Board of Revenue had also planned to gradually build a system for valuing assets at market prices.

Under the proposal, net wealth up to Tk 4 crore would have been exempt, in line with the existing wealth surcharge threshold. Wealth between Tk 4 crore and Tk 6 crore would have been taxed at 0.25 percent, followed by 0.50 percent on the next Tk 5 crore, 0.75 percent on the subsequent Tk 5 crore, and 1 percent on wealth exceeding Tk 16 crore.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said Bangladesh already has a wealth surcharge in place, but a separate wealth tax could still be justified if its slab structure is carefully designed.

“The government may be taking additional time to study the proposal, particularly its impact on the overall tax burden,” he said.

He noted that the outcome would depend largely on how the slabs are structured and whether further technical refinement is needed.

Rahman observed that while a wealth tax was intended to align with international standards, its rationale is already partly reflected in the existing surcharge system.

He said a surcharge differs structurally from a wealth tax, as it is applied on top of tax liabilities rather than directly on wealth.

The policy expert cautioned that any shift toward a wealth tax must account for the fact that wealth is often accumulated from already-taxed income, and should be designed to avoid discouraging investment or triggering capital flight.

At the same time, he said there is merit in moving toward a more formal and structured wealth taxation framework.

On broader reforms, he stressed the need to expand the tax base and strengthen enforcement, noting that although many taxpayers hold Taxpayer Identification Number (TIN), only about a quarter actually pay taxes.

He also called for greater digitalisation, reduced human interface in tax administration, and improved governance to enhance revenue collection.

AIT on motorcycles, rickshaws

The proposed AIT on motorcycles above 110cc sparked protests outside the NBR last week, with bikers and ride-sharing workers staging demonstrations against the planned measure.

The proposal also drew widespread criticism on social media, with users arguing that motorcycles have become an essential means of daily transportation and livelihood, not merely recreational vehicles.

In response, Prime Minister Rahman first directed that the proposed tax be halved, and later ordered it withdrawn entirely, said officials familiar with the matter.

Owners of motorcycles with engine capacities above 150cc will, however, still be required to obtain a TIN.

The tax authority had also planned to impose AIT on the growing fleet of battery-run auto-rickshaws.

Under that proposal, such vehicles operating in city corporation areas would have faced an annual AIT of Tk 5,000, those in municipal areas Tk 2,000, and those in union parishad areas Tk 1,000.

The government is now expected to drop that proposal as well amid concerns over public backlash, according to officials involved in the process.

The government is moving away from its widely discussed plan to introduce a wealth tax. It may also abandon its proposal to allow the whitening of undisclosed money with indemnity in sectors such as real estate.

In addition, plans to impose taxes on motorcycle owners and battery-powered auto-rickshaws may also be dropped. Instead, the government is considering a one-time tax on higher-capacity motorcycles.

According to finance ministry sources, the decisions were made at a meeting yesterday (3 June) attended by the prime minister, the finance minister and the chairman of the National Board of Revenue (NBR). The finance minister is expected to place the budget proposal in parliament on 11 June.

Speaking to The Business Standard on condition of anonymity, a senior NBR official said, "The prime minister has instructed us not to pursue policies that could create controversy or place additional burdens on ordinary people. As part of that directive, plans to provide indemnity for investing undisclosed money and to impose broad-based taxes on motorcycles and battery-powered auto-rickshaws have been shelved.

"Regarding the wealth tax, the prime minister has asked for an impact analysis before any proposal is finalised. As a result, it is unlikely to be included in the upcoming budget."

He added, "To avoid placing a burden on ordinary people, there may not be a tax on all motorcycles. At the same time, the government does not want to face criticism by allowing black money to be invested with indemnity."

Earlier, NBR Chairman Abdur Rahman Khan had indicated that a wealth tax would be introduced in this year's budget. Sources involved in the budget process had also said that the proposal received preliminary approval at a meeting chaired by the prime minister in May.

Sources further said the government had considered allowing undisclosed money to be invested in sectors such as real estate to stimulate economic activity and boost revenue collection.

However, after reports emerged about plans to tax motorcycles, a group of bikers staged a protest in front of the NBR headquarters in Agargaon. Economists and several civil society platforms also voiced opposition to proposals that would allow black money to be invested with indemnity.

The government has now decided to retreat from those plans.

Dr Syed Md Aminul Karim, former NBR member of the Income Tax Policy Wing, believes it would not be justified to abandon the wealth tax proposal.

He told TBS, "A wealth tax could have been a useful tool both for raising revenue and reducing inequality. The government may be stepping back because of concerns over public reaction."

He also said there should be a mechanism to bring the large volume of money outside the formal economy into productive investment.

In his view, the proposed taxes on motorcycles and battery-powered auto-rickshaws were also reasonable.

However, Snehasish Barua, an income tax expert and managing director of SMAC Advisory Limited, believes that implementing a wealth tax could create inequality, as those who declare their assets would bear the tax burden, while those who conceal assets might escape taxation altogether.

He also warned that valuing assets for wealth tax purposes could be highly complex and may trigger a large number of legal disputes and court cases.

"For that reason, it would not be prudent to implement such a tax without adequate preparation," he said.

Barua added that the government should also examine why countries such as India eventually abandoned wealth taxes after introducing them. "The experiences of those countries and the reasons behind their policy reversals should be taken into consideration before making any decision," he said.

At present, individuals with assets worth more than Tk3 crore are required to pay a surcharge on their income tax at prescribed rates. The NBR had planned to introduce a direct tax on wealth itself, at rates of up to 1% of asset value.

Meanwhile, the existing system already allows undisclosed money to be invested after payment of the applicable tax plus a 10% penalty. However, agencies such as the Anti-Corruption Commission can still question the source of those funds.

The government had initially considered removing the authority of any agency to question the source of such money.

In FY2020-21, the government allowed black money to be invested in any sector by paying a flat 10% tax and granted indemnity from further scrutiny.

More than Tk20 thousand crore was legalised under the scheme that year, generating over Tk2 thousand crore in tax revenue for the government. The policy, however, drew widespread criticism.

A growing number of Bangladeshi freelancers, students and small businesses are turning to informal reseller networks to gain access to premium artificial intelligence and software tools as high subscription costs and limited access to international payment methods make official services difficult to afford.

The expanding market reflects the growing dependence on digital tools across the economy, while also exposing users to cybersecurity risks and operating within a largely unregulated environment.

Official subscriptions to global digital platforms typically require payment in US dollars through international credit cards, which remain inaccessible or inconvenient for many Bangladeshis. Local resellers have stepped in to bridge the gap by purchasing subscriptions in bulk, using family or team plans, or sourcing packages from lower-priced regions before reselling access in local currency through mobile financial services like bKash and Nagad.

The price differences are substantial. ChatGPT Plus, which officially costs around Tk2,400 to Tk2,500 per month, is commonly sold by local resellers for about Tk400. Canva Pro and VPN services, which officially cost between Tk1,500 and Tk1,800 per month, are available through resellers for Tk150 to Tk350.

Similarly, YouTube Premium, priced at Tk239 per month for individual users, is offered through shared arrangements for Tk100 to Tk150. Netflix's Premium 4K plan, which costs around Tk1,200 to Tk1,250 per month, is frequently resold through shared profiles for approximately Tk450.

According to the ICT Division, Bangladesh has around 6,50,000 freelancers working in a sector valued at nearly $1 billion annually, making the country one of the world's largest freelance labour markets. A 2025 study published by the International Journal of Research and Innovation in Social Science found that many freelancers earn less than $209 per month, making multiple full-price software subscriptions financially out of reach.

"For most freelancers, paying full international prices for several tools together becomes almost impossible," freelancer Sourav Biswas told TBS.

Digital tools becoming essential

As AI and digital productivity platforms become increasingly integrated into everyday work, many users now regard premium subscriptions as essential rather than optional.

Digital marketing agencies rely on design and content creation tools, while freelancers use AI and writing assistance platforms to serve international clients. Students increasingly depend on such tools for assignments, presentations and research.

Tanvir Hassan, executive director of Ekush Communication, said premium software has become indispensable for agency operations.

"Content teams use them for design, copywriting, presentations, client communication and productivity. AI tools especially have significantly reduced turnaround time in many creative tasks," he said.

For smaller agencies with multiple employees, he added, maintaining official subscriptions across all required platforms can create a significant monthly financial burden.

University student Aniruddha Biswas said many students could not afford official subscriptions individually.

"Usually, a group of students purchases subscriptions together through local sellers to reduce costs," he said.

Several freelancers and students said access to such tools directly affects their competitiveness in global digital marketplaces.

Digital inequality driving demand

Md Neamul Hasan Mimu, chairman of reseller business Bongo Digital, said demand for subscriptions to ChatGPT Plus, Canva Pro, Adobe products, Spotify and Grammarly had increased rapidly in recent years.

His company currently serves between 30 and 50 customers daily.

"A large number of users in Bangladesh still do not have access to international payment cards, and the high exchange rate makes official subscriptions relatively expensive," he said.

Neamul called on global technology companies to introduce local currency billing and integrate domestic payment platforms.

BM Mainul Hossain, director at the Institute of Information Technology of the University of Dhaka, said the growth of the reseller market highlighted broader digital inequality.

"Global pricing is often too high for a country like Bangladesh. If regional pricing or localised access models are not introduced, many users simply cannot afford these services," he said.

According to Mainul, unofficial parallel markets tend to emerge naturally when digital services remain financially inaccessible to large segments of the population.

Security and privacy concerns

Despite their lower prices, reseller services carry significant cybersecurity and privacy risks, according to experts.

Mainul warned that shared accounts may expose users' browsing histories, prompts and personal information to others. He also noted that some unofficial login methods could facilitate the spread of malware.

Cybersecurity expert Arif Mainuddin said many consumers prioritise affordability over account security.

According to him, some resellers request customers' email credentials, passwords or even remote access to their devices, creating risks of identity theft, unauthorised account access and credential misuse.

The Business Standard also observed that some group-buy services rely on browser extensions to provide access. Experts caution that such extensions may gain access to browsing sessions, cookies and account activity.

"While unofficial subscription markets may appear economically attractive, users must understand that lower costs often come with hidden cybersecurity and privacy trade-offs," Mainuddin said.

The Business Standard contacted Group Buy Services, one of the larger operators in the market, for comment, but the company declined to respond.

Regulatory uncertainty

The market currently operates in a legal grey area. No publicly known licensing framework exists under the Bangladesh Telecommunication Regulatory Commission specifically for the resale of shared software-as-a-service subscriptions.

Despite repeated attempts, TBS could not obtain comments from commission officials.

Although subscription reselling itself may not be illegal, practices involving unauthorised credential sharing, cracked software or stolen payment methods could potentially violate platform policies, copyright protections or cybercrime laws.

After a brief recovery in April, exports returned to a year-on-year decline last month, according to official data, as weak demand for apparel in key markets and lower order volumes from Western buyers weighed on earnings.

With merchandise exports dropping in May, overall shipments in the first 11 months of the current fiscal year also fell compared with the same period a year earlier.

Amid mounting external pressures largely caused by the war in the Gulf, exporters say a prolonged slowdown could put pressure on the country’s foreign exchange inflows and overall economic growth.

Meanwhile, with only one month remaining in the fiscal year, economists are questioning whether exports will end FY2025-26 in negative territory, reversing the recovery recorded in FY2024-25 after two consecutive years of decline.

In May, the country’s merchandise exports fell 7 percent year-on-year to $4.40 billion. As a result, exports in the July-May period of FY2025-26 declined 2.60 percent year-on-year to $43.80 billion, according to data released by the Export Promotion Bureau (EPB) yesterday.

The figure was down 2.6 percent from $44.95 billion in the corresponding period of the previous fiscal year, EPB data showed.

“Negative growth in May was expected,” said Mohammed Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

The readymade garment sector generates more than 80 percent of Bangladesh’s export earnings.

During the first 11 months of FY26, garment exports fell 3.4 percent year-on-year to $35.31 billion. Knitwear exports dropped 4.3 percent to $18.78 billion, while woven garment shipments declined 2.4 percent to $16.53 billion.

The BKMEA president said export orders have remained sluggish for much of FY26 as buyers in major markets continue to place orders cautiously amid global economic uncertainty.

“The global market is still weak, and export orders are lower than expected. That is why the sector is posting negative growth,” Hatem told The Daily Star.

He also pointed to the Eid-ul-Azha holidays, which began in late May and reduced factory working days, affecting production and shipments during the month.

According to Hatem, the strong growth recorded in April was partly due to a favourable comparison with the same month a year earlier, when overall production hours were reduced by Eid holidays.

“This year’s April had more working days, so some growth was natural. But the market situation has not improved significantly,” he said.

Hatem said the apparel sector has been under pressure throughout the fiscal year and there are few signs of a sharp recovery in the coming months. “We do not see any strong indication that orders will rebound significantly in the near future.”

He added that a prolonged weakness in exports could put pressure on the country’s foreign exchange inflows and overall economic growth.

In the first 11 months of the current fiscal year, Bangladesh’s terry towel and linen exports fell 14 percent as manufacturers grappled with weak global demand and rising business costs.

M Shahadat Hossain Sohel, president of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, said the sector was being squeezed by multiple crises, including the lingering impact of the Russia-Ukraine war, conflicts across the Middle East and an inflation-driven slowdown in demand in key markets such as Europe and the United States.

He said many small and medium-sized factories had shut down since the pandemic, while larger firms were surviving largely on bank financing rather than profits.

Sohel also blamed soaring production costs, unreliable gas and power supplies, and a difficult business environment for eroding competitiveness.

According to him, without stronger policy support, similar to incentives offered by India to its textile sector, Bangladesh could lose further ground in global markets.

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said it was still too early to conclude whether Bangladesh’s exports would end the fiscal year in negative territory, as one month remained.

“However, export growth is unlikely to improve significantly,” he said.

Razzaque said the prolonged weakness in exports was already affecting investment and the labour market. If exports fail to recover quickly, the adverse effects could persist for a longer period.

Citing data from the Bangladesh Bureau of Statistics (BBS), he said the country had been facing labour market challenges for the past two years, making a near-term recovery unlikely.

As Bangladesh’s exports are heavily concentrated in the readymade garment sector, any slowdown in apparel shipments has ripple effects across the broader economy, including backward linkage industries, said the economist.

The war in the Middle East has dented economic growth prospects worldwide, with a more severe shock likely if no effective ceasefire is agreed before 2027, the OECD warned today (3 June).

Global economic growth is now forecast to slip to 2.8% for 2026 if Gulf exports of oil and gas return to pre-conflict levels in the third quarter, the group of 38 industrialised countries said in its quarterly update.

Previously, the OECD had forecast full-year global growth of 2.9%.

But if the Mideast war continues into next year, global growth could slow to 2.1%, the OECD said -- well below the average annual growth of 3.45% seen from 2013 to 2019, before the Covid pandemic.

"The longer the disruptions last, the larger the economic and social costs become," the group's chief economist Stefano Scarpetta said in the report.

Many countries would risk falling into recession, he noted, and a drop in investment spending -- "including in energy-intensive AI" -- would likely push up unemployment.

Sustained high prices for energy as well as fertiliser and other key products from hydrocarbon production in the Gulf would weigh especially hard on developing countries that have "higher shares of energy and food in household consumption".

Even if the war sparked by US and Israeli strikes on Iran in late February ends in the coming weeks, the OECD forecasts global inflation rising to 4%this year from 3.4% in 2025.

In this "time-limited disruption scenario", the group expects US growth to slow to 2% this year and 1.8% in 2027, after growing 2.1% last year.

In the eurozone, where many countries are highly dependent on energy imports, GDP growth will slump to 0.8% this year after 1.4% last year, assuming a Mideast ceasefire is secured in the coming weeks.

After a strong rebound in April, Bangladesh's export earnings fell again in May by 7.07% year-on-year, according to Export Promotion Bureau (EPB) data released today (3 June).

Exporters attribute the fall mainly to factory closures during the extended Eid holidays and a sustained slowdown in global demand.

In value terms, Bangladesh exported goods worth around $4 billion in May, down from $4.73 billion a year earlier. However, exports rose nearly 10% compared to April, indicating a short-term monthly recovery amid a broader slowdown.

Overall, export earnings in the first 11 months (July-May) of the fiscal 2025-26 fell by 2.55% compared to the same period last year. Total exports stood at $43.80 billion, down from $44.95 billion. Of the 11 months, nine recorded negative growth.

The ready-made garment (RMG) sector, which accounts for over 80% of national export earnings, remained the main drag. In May alone, garment exports fell by 8.29%.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President Shehab Uddin Chowdhury told The Business Standard that Eid holidays disrupted production and shipments.

"Factories remained closed for five to six days at the end of May due to Eid, which reduced shipments," he said, adding that global apparel demand remains weak.

Segment-wise data show knitwear performed worse than woven products. Knitwear exports fell 8.29% in May year-on-year, while over July-May they declined 4.26%, compared to a 2.42% drop in woven exports.

Industry stakeholders say the contraction in knitwear – largely basic apparel items – signals weakening global demand for low-value garments, a segment where Bangladesh has traditionally been strong.

Sparrow Group Managing Director Shovon Islam said the trend reflects a structural shift in demand. "A decline in knitwear exports indicates shrinking demand for basic items globally. To stay competitive, Bangladesh needs to move toward higher-value products, including man-made fibre-based garments," he said.

Outside garments, several major export categories also declined in May: frozen and live fish fell 22%, agricultural products 2.19%, leather and leather goods 13%, other footwear products 7%, and paper products 23%.

Some sectors, however, posted growth. These included home textiles (3.67%), specialised textiles (4.91%), jute and jute goods (8.40%), plastic goods (14.15%), and chemical products (11.65%).

Exporters warned the weak trend may continue into June, although business leaders expect a gradual recovery. "We expect exports to pick up from July," said Shehab Uddin Chowdhury.

The Financial Institutions Division has directed Bangladesh Bank representatives and managing directors of all scheduled banks to take necessary steps to enrol their officers and employees in the Pragati Scheme under the Universal Pension System.

The instruction was issued at a discussion meeting chaired by Nazma Mobarek, secretary of the Financial Institutions Division under the Ministry of Finance, at the Secretariat in Dhaka yesterday.

It was noted at the meeting that the National Pension Authority (NPA) has signed memorandums of understanding (MoUs) with 48 banks and financial institutions, while 24 banks are actively involved in collecting and disbursing pension contributions.

Addressing the meeting, the secretary said separate desks should be set up at all bank branches to increase enrolment in the Universal Pension System.

She also directed banks to display banners in accordance with the MoUs and ensure that marketing officials play an active role in promoting the scheme.

Mobarek further stressed the need to bring all officers and employees of private banks under the Pragati Scheme.

Md Suratuzzaman, executive chairman of the NPA, presented a keynote paper highlighting the progress of the Universal Pension System, the features of the Pragati Scheme and its importance for private-sector workers.

He said around 18 million private-sector workers in Bangladesh lack formal retirement security, unlike government employees who are covered by state pension arrangements. The Pragati Scheme was introduced to address this gap under the Universal Pension System launched in 2023.

The meeting also discussed proposals to introduce a shariah-based pension scheme, extend lifelong pension benefits to nominees and bring outsourced workers under the Pragati Scheme. The Pragati Scheme is designed for private-sector employers and employees.

Under the scheme, employees and employers each contribute 50 percent of the monthly contribution. Monthly contributions range from Tk 1,000 to Tk 15,000, and participants receive lifelong monthly pension benefits after retirement.

The scheme also offers tax incentives, as contributions are eligible for income tax rebates while pension income remains fully tax-free. Upon reaching the age of 60, participants receive up to 30 percent of their accumulated corpus as a one-time gratuity payment. The scheme is backed by government-guaranteed investments.

As of May 30, 2026, a total of 3,77,930 people had registered under the four pension schemes, with deposits reaching about Tk 260 crore and investments standing at Tk 286 crore.

The Cabinet Committee on Government Purchase has recommended separate proposals to import five liquefied natural gas (LNG) cargoes to meet the country's fuel requirements.

Among the proposals was the purchase of two LNG cargoes from SOCAR Trading SA of Switzerland under a direct procurement process for 2026. The proposal was placed by the Energy and Mineral Resources Division.

Under the proposal, the LNG will be purchased at a price linked to the JKM benchmark, with a premium of $0.25 per million British thermal units (MMBTU).

The committee also recommended another proposal for the purchase of three LNG cargoes through the international Request for Quotation (RFQ) process under the Public Procurement Rules 2025.

The cargoes are scheduled for delivery during three separate windows: June 26-27, June 30-July 1, and July 6-7 this year.

Under the RFQ process, BP Singapore Pte Ltd was selected to supply one cargo, while TotalEnergies Gas & Power Ltd, UK, was selected to supply two cargoes.

The government will spend over Tk 2,372 crore for the three cargoes.

The recommendations came at the cabinet committee's 24th meeting of 2026, held on June 3, according to a press briefing released after the meeting.

A total of seven proposals were placed before the committee for discussion.

Qatar is a long-term supplier of LNG to Bangladesh, and it ships a large amount of LNG through the Strait, which accounts for roughly a fifth of global LNG flows.

Bangladesh meets nearly 30 percent of its gas demand through imported LNG, while domestic output continues to fall short of the total requirement of about 2,650 mmcfd (million cubic feet per day), according to energy ministry data.

LNG prices have nearly doubled compared with the pre-war level of around $10–12 per MMBtu.

The global economic outlook hinges on how long the war in the Middle East lasts, with recession in some countries and sharply higher inflation a real possibility if it drags on into next year, the Organisation for Economic Co-operation and Development warned on Wednesday.

If the conflict proves short-lived, Gulf oil and gas production could gradually return to pre-crisis levels from the third quarter with shortages confined to Asia and cushioned by strategic reserves and shipments from other producers.

If energy disruption persists well into next year, global growth could slow sharply to 2.1 percent in 2026 and 1.8 percent in 2027 - rates rarely seen outside major crises such as the 2008 to 2009 financial crash or the COVID pandemic.

Some economies could fall into outright recession, with Asian countries reliant on Middle East energy supplies expected to be hit hardest.

In the protracted disruption scenario, higher energy prices could add 0.4 percentage points to global inflation in 2026 and 1.3 percentage points in 2027, likely prompting central banks to hike interest rates by 0.5 to 0.75 percentage points in the short term.

In the baseline scenario, the OECD forecast that inflation across G20 economies would peak at 4 percent this year before slowing to 3.1 percent next year with interest rates largely on hold this year and cuts expected next year.

“Around one-third of OECD economies are projected to experience negative real wage growth this year.

Workers in these countries will see their living standards fall, which is the human reality behind the inflation numbers,” OECD Secretary General Mathias Cormann said.

Global trade growth is set to moderate following a strong 2025, though robust demand for AI-related goods and investment, especially in Asia, should provide some support.

In the baseline scenario, stronger energy exports are expected to support US growth, partly offsetting the drag from higher prices on household purchasing power. Growth is projected to ease from 2.1 percent in 2025 to 2.0 percent in 2026 and 1.8 percent in 2027.

In Europe, euro zone growth was seen slowing from 1.4 percent to 0.8 percent this year before rising to 1.2 percent next year as resilient labour markets and higher defence spending help offset government belt-tightening.

In Britain, growth is projected to slow to 0.9 percent this year before recovering to 1.1 percent in 2027 as global trade stabilises and financial conditions ease.

In Asia, China was seen slowing from 5.0 percent growth in 2025 to 4.5 percent in 2026 and 4.3 percent in 2027 with ample energy reserves limiting exposure to oil price spikes. Exports are set to benefit from lower US tariffs and a competitive tech sector, although a property slump remains a drag.

Japan is expected to be among the hardest-hit by trade disruptions linked to the Gulf conflict, with growth slowing from 1.1 percent in 2025 to 0.6 percent in 2026 before edging up to 0.8 percent in 2027, a downgrade from March.

While subsidies will help cushion the energy shock, the OECD said Japan needs a “clear and credible” plan to rein in public finances over the medium term as interest rates rise.

Any new US tariffs on European Union goods on top of the rates agreed last year would be unacceptable, senior EU lawmaker said on Wednesday, ​rejecting US claims the EU was not curbing trade in forced labour ‌goods as “utterly absurd”.

The US Trade Representative’s office on Tuesday proposed imposing additional duties of 10 percent or 12.5 percent on imports from 60 economies, including the European Union, saying investigations showed they failed to curb ​trade in goods made with forced labour.

“The impression is increasingly emerging that a tariff measure is sought first, ​and only then is a suitable legal justification found. The approach here is: ​if it doesn’t fit, make it fit,” he said.

Lange said that at the end of 2024, the ‌European Union adopted the world’s strictest legislation against products made using forced labour and that companies were already preparing for the new requirements to make supply chains more transparent, identify risks and demonstrate that countermeasures are in place.

The European Commission was working on the ​final implementation guidelines ​for authorities and businesses, he said.

“The claim that the EU is not taking sufficient action against forced labour does not stand up to serious scrutiny. ​Anyone who examines the facts knows that the European Union is ​setting global standards in this area,” he said.

“The key question will therefore be whether the proposed additional tariff of ten per cent will exceed the Turnberry agreements,” he said referring to ⁠an agreement ​from July 2025 in which the EU agreed ​to remove tariffs on US goods and Washington agreed to a maximum tariff on most EU goods of ​15 percent.

Gold prices slipped on Wednesday, as renewed hostilities ‌in the Middle East pushed crude higher and stalled US-Iran talks, while investors awaited upcoming US economic data.

Spot gold fell 0.5 percent to $4,460.36 per ounce by 0702 GMT, after rising ​more than 1 percent in the previous session. US gold futures for August ​delivery slipped 0.7 percent to $4,488.90.

US Secretary of State Marco Rubio said on Tuesday that President ​Donald Trump’s negotiating team has not offered Iran sanctions relief in exchange for reopening the Strait of Hormuz and insisted that any sanctions relief was tied to Tehran giving up its ​nuclear programme.

“The market is now looking at the possibility that this ceasefire with ​Iran may not hold even though Trump is going to push for a peace deal ‌resolution,” said Kelvin Wong, a senior market analyst at OANDA.

“If we start to see further escalation, that could also dampen whatever recovery that gold might have had.”

Oil prices rose more than 1 percent, deepening concerns over inflation and interest rate hikes.

Cleveland ​Federal Reserve President Beth ​Hammack said on Tuesday the US central bank may need to raise interest rates soon should already-high inflation pressures continue to mount.

Investors are ​now awaiting the US nonfarm payroll data, due later in ​the day, and employment report due on Friday to gauge the Fed’s monetary policy path.

Although gold is typically viewed as a hedge against inflation, it tends to lose its appeal ​as a non-yielding asset in a high interest-rate ​environment.

The government has increased electricity tariffs by 16.68% at the consumer level in a move aimed at reducing the power sector's mounting subsidy burden, a decision economists, industry leaders and energy analysts warn could fuel inflation, raise business costs and further strain households already grappling with rising living expenses.

The Bangladesh Energy Regulatory Commission (BERC) today (3 June) raised the weighted average retail electricity tariff by Tk1.52 per unit, from Tk9.11 per kilowatt-hour (kWh) to Tk10.63 per kWh.

The new rates will take effect from June's billing cycle.

The regulator also increased the weighted average bulk electricity tariff by 19.85%, or Tk1.39 per unit, from Tk7.00 per kWh to Tk8.39 per kWh.

The increase follows a series of energy price adjustments introduced by the government in recent months as it sought to contain subsidy costs.

Amid pressure on the energy sector stemming from the Iran war, the government raised the prices of four types of fuel oil on 18 April. While prices remained unchanged in May, three of those fuel types were increased again in June, with diesel being the only exception.

Following those fuel price adjustments, discussions intensified over a possible increase in electricity tariffs, culminating in today's decision.

The wholesale electricity tariff was last revised in February 2024, when the average bulk tariff was increased from Tk6.70 per unit to Tk7.40.

Subsidy reduction behind the hike

BERC Chairman Jalal Ahmed said the latest adjustment was necessary to reduce the government's subsidy requirement in the power sector.

According to BERC, the government would need around Tk56,000 crore in power subsidies in fiscal year 2026-27 under the existing tariff structure.

The latest tariff increase is expected to reduce that requirement by about Tk14,200 crore, lowering the subsidy burden to nearly Tk41,000 crore.

"Even after the tariff increase, the government will still have to provide a substantial amount of subsidy," Jalal said while announcing the decision.

Officials at the Power Division said the move was consistent with the government's broader commitment to gradually reduce energy subsidies, a reform recommendation repeatedly highlighted by the International Monetary Fund (IMF).

Several officials familiar with the matter, however, said there had also been pressure to demonstrate progress on subsidy reforms ahead of budget preparations and ongoing discussions with development partners.

Responding to questions about whether external lenders had influenced the decision, the BERC chairman said, "There was no pressure. The decision was taken quickly considering the upcoming budget."

Inflation fears mount

Economists warned that the sharp rise in electricity prices would inevitably raise living costs and add to the cost pressures already facing businesses.

Asked whether BERC had assessed the impact of the tariff increase on inflation and household expenditure, Jalal Ahmed acknowledged that no such evaluation had been conducted. "The price increase will increase people's expenses, but an economic evaluation has not been done. There is an opportunity to do this."

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said the increase would have direct consequences for inflation and industrial production costs.

"The tariff hike will certainly contribute to higher inflation and increase the cost of industrial output. However, the current level of subsidy in the power sector is also unsustainable," she said.

She argued that tariff increases alone would not solve the problem and called on the government to address inefficiencies, wastage and governance shortcomings within the sector.

Industry, consumers faces higher power bills

Industrial and commercial consumers have been among the hardest hit by the latest adjustment.

Commercial tariffs have been increased from Tk13.46-16.00 per unit to Tk15.36-18.40 per unit, while small industries will now pay Tk12.73 per unit, up from Tk11.05.

Medium-voltage industrial consumers will pay between Tk12.52 and Tk16.36 per unit, compared with Tk10.94-Tk14.24 previously. High-voltage industrial tariffs have been raised to Tk12.12-Tk15.91 per unit from Tk10.62-Tk13.84.

Shawkat Aziz Russell, president of the BTMA, said the increase would significantly affect the country's export-oriented textile and apparel sector.

"Energy accounts for nearly 30% of total production costs in many textile and spinning units, and this increase in power prices could raise overall production costs by around 10%," he said.

"At a time when manufacturers are already struggling with high interest rates, gas shortages, rising wages and global market uncertainties, this additional burden will further erode the competitiveness of Bangladeshi products in the international market," he added.

"We understand the government's need to mobilise resources ahead of the national budget, but such a sharp tariff hike will have broader consequences for inflation, investment and industrial growth. This decision could prove highly disruptive to the overall economy if not accompanied by structural reforms in the power sector," Russell further said.

Mahmud Hasan Khan, president of the BGMEA, told TBS that businesses were already struggling with higher fuel costs and operational challenges.

"We have asked the government to ensure an uninterrupted power supply. It would have been better if the decision to raise electricity prices had come after that was guaranteed," he said.

Speaking to TBS on the issue, Business Initiative Leading Development Chairperson Abul Kasem Khan said that while Bangladesh is able to produce goods at lower costs than some countries in certain cases, energy costs account for a significant share of production expenses. As a result, an increase in electricity prices directly raises production costs.

"Broadly speaking, there is little we can do – the cost of production will increase. We hope the government will consider the issue and provide some form of support or compensation in other ways. The additional cost could be partially adjusted through tax relief and other measures," he added.

Consumer groups also criticised the decision.

Residential consumers will also face higher bills across all consumption slabs. The lifeline tariff for consumers using up to 50 units a month has been increased from Tk4.63 to Tk5.32 per unit, while households consuming more than 600 units will pay Tk17.35 per unit, up from Tk15.40.

The Consumers Association of Bangladesh expressed deep concern, arguing that higher electricity prices would have a broad economic impact and that consumers would ultimately bear the burden.

In a statement, the organisation's vice-president, SM Nazer Hossain, said the move was difficult to justify at a time when many countries were waiving utility bills for low-income and marginal consumers.

He said that increasing prices in the name of reducing subsidies for small consumers was not acceptable.

Structural reforms needed

On the matter, Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), also noted that tariff hikes alone would not resolve the financial challenges facing the power sector.

According to him, structural reforms were essential to reduce dependence on subsidies.

"Addressing overcapacity and capacity payment obligations should be the priority. Tariff increases may provide temporary relief, but they will not resolve the underlying causes of the subsidy burden," he said.

He warned that continued additions to generation capacity despite sluggish demand growth could force the Bangladesh Power Development Board to keep making large capacity payments while purchasing less electricity from operational plants, increasing financial pressure on the sector.

Higher transmission charges

BERC has also increased the transmission, or wheeling, charge for Power Grid Bangladesh PLC from Tk0.3135 per kWh to Tk0.3886 per kWh, an increase of Tk0.0751 per unit.

The regulator, however, left retail demand charges unchanged across all consumer categories and retained the existing 0.5% rebate on net electricity bills for prepaid meter users.

Bangladesh's stock market extended its winning streak today (3 June), with turnover reaching an eight-month high as investors rushed into distressed and underperforming stocks amid optimism over government support measures and expectations of regulatory reforms.

The rally was driven largely by the government's decision to create a Tk60,000 crore special fund aimed at reopening closed industrial units and supporting financially troubled enterprises.

Investor sentiment was also boosted by discussions over the expected reconstitution of the Bangladesh Securities and Exchange Commission (BSEC), which many market participants believe could pave the way for reforms and help restore confidence in the capital market.

At the close of trading, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) rose 35 points to settle at 5,442. The blue-chip DS30 index gained 7 points to 2,057, while the DSES Shariah Index advanced 10 points to 1,099.

Turnover on the premier bourse climbed to around Tk1,279 crore, the highest daily turnover in the past eight months. The figure was 18.43% higher than the previous trading session, reflecting a notable increase in trading activity and investor participation.

Market breadth remained firmly positive. Of the securities traded on the DSE, 243 advanced, 98 declined and 49 remained unchanged.

Investors said the newly announced government fund has raised expectations that several listed companies suffering from prolonged financial distress and operational disruptions may eventually be able to resume business activities.

As a result, buying interest concentrated on stocks seen as potential beneficiaries of the initiative.

The optimism was particularly evident among distressed and low-priced shares, which dominated the day's gainers' list.

Regent Textile Mills and Prime Finance jumped 10% each, while Sonargaon Textiles gained 9.93%. Meghna Pet Industries rose 9.89%, Bangladesh Industrial Finance advanced 9.76%, Nurani Dyeing added 9.68%, New Line Clothings climbed 9.43%, and Emerald Oil Industries gained 9.18%.

In its daily market review, EBL Securities said the benchmark index reached a three-month high, extending its rally to eight consecutive trading sessions.

The brokerage noted that investor sentiment remained upbeat amid expectations of supportive policy measures for capital market development, encouraging investors to accumulate stocks viewed as attractively valued.
According to the brokerage, buying interest remained broad-based throughout the session, helping sustain the market's upward momentum despite some mild selling pressure.

Sector-wise, the engineering sector dominated trading, accounting for 17.1% of the day's turnover, followed by textiles at 13.4% and pharmaceuticals at 12.7%.

Most sectors ended in positive territory. The services sector led the gainers with a 3.7% rise, followed by paper and printing at 3.2% and financial institutions at 2.9%. The banking sector was the only laggard, declining 0.5%.
The positive sentiment was also reflected at the Chittagong Stock Exchange (CSE). The Selective Categories Index (CSCX) rose 55.9 points, while the All Share Price Index (CASPI) gained 104.8 points.

Analysts, however, cautioned investors against making investment decisions based solely on expectations.

They noted that the sharp gains in many distressed stocks remain largely driven by sentiment rather than fundamentals, and that the longer-term impact will depend on how effectively the government's revival fund is implemented and whether struggling companies can successfully restart operations.

Even so, the latest rally suggests confidence is gradually returning to the market after a prolonged period of weakness.

The International Monetary Fund (IMF) has agreed to Bangladesh’s request for a new loan programme to replace the existing $5.5 billion arrangement, with a staff mission expected to visit Dhaka soon to begin discussions.

In a statement issued yesterday, the international lender said a final decision on the new programme would require approval from its executive board.

“Any new arrangement would need to be based on Bangladesh’s balance-of-payments needs and strong policy commitments anchored by a credible reform agenda, and would be subject to the IMF’s policies and Executive Board approval,” Ivo Krznar, IMF mission chief for Bangladesh, said in the statement.

IMF staff are engaging with the Bangladeshi authorities on their reform agenda and policy priorities as part of the fund’s consideration of possible next steps, he said.

Krznar said the upcoming staff visit would allow the IMF to assess recent economic developments, engage with authorities on policy priorities, and evaluate the outlook and reform challenges.

“Discussions about the parameters of a potential new IMF-supported programme -- including its size and related reform commitments -- would take place in the context of a subsequent program negotiation mission,” he added.

The latest development came after a virtual meeting on May 21 between Finance and Planning Minister Amir Khosru Mahmud Chowdhury and IMF Deputy Managing Director Nigel Clarke.

The two sides discussed Bangladesh’s macroeconomic situation, progress under the ongoing programme, and prospects for future cooperation.

On May 25, the finance minister said the government and the IMF had agreed to a new three-year programme to replace the existing package.

The IMF approved $4.5 billion for Bangladesh in January 2023 under three facilities -- the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF).

The package was expanded by $800 million in May last year under the interim government, bringing the total to $5.5 billion. Bangladesh has so far received $3.8 billion across five tranches.

The sixth tranche has been pending since November last year, when the IMF suspended discussions and decided to resume talks with the new government after the February election.

Under the previous schedule, the fifth and sixth tranches – together worth $1.3 billion -- were due by June, with a final tranche expected in December.

Discussions on a replacement programme began during the IMF-World Bank Spring Meetings in April. The lender signalled at the time that no further tranches would be released without visible progress on economic reforms. Virtual talks have since continued weekly over the proposed loan amount and accompanying reform conditions.

While noting that the current arrangements have provided an important policy anchor during a very difficult period, Krznar acknowledged that the macroeconomic and political context had changed substantially since it was approved in 2023.

Authorities now face a more complex set of challenges. Banking-sector weaknesses and low revenue mobilisation, he said, underscored the need for a renewed and sustained reform effort.

“The IMF remains a committed partner to Bangladesh in its efforts to secure lasting macroeconomic and financial stability, strengthen resilience, and support strong, inclusive growth,” Krznar said.

The Trump administration on Tuesday (2 June) proposed imposing additional duties of 10% or ​12.5% on imports from 60 economies after determining that their failure to curb trade in ‌goods made with forced labour is unreasonable and restricts US commerce.

The proposal from the US Trade Representative's office (USTR) is the latest finding from a Section 301 unfair trade practices investigation to be released as the Trump administration seeks to ​rebuild its emergency tariffs, which were struck down by a US Supreme Court decision in ​February, Reuters reports.

The USTR said it determined that it would impose 10% duties related to ⁠the forced labour investigation on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, ​Cambodia, El Salvador, Guatemala, Malaysia, Taiwan and Britain.

The trade agency said it would impose additional duties ​of 12.5% on the remaining 45 countries that it investigated.

"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable," US Trade Representative Jamieson Greer said in a statement. "This creates ​a dynamic where American workers are forced to compete globally on an uneven playing field."

Reacting to the news, Fazlee Shamim Ehsan, executive president of BKMEA and president of the Employers Federation of Bangladesh, told TBS, "There is no justification for imposing this new tariff on Bangladesh, as the country is not among those accused of using forced labour.

"They are trying to use tariffs as a tool. This will ultimately harm the free market economy and the global economy."

The USTR said ​it was also proposing a textile mechanism that would allow for a certain volume of apparel and textile imports ‌to enter the US at a reduced tariff rate, though the duties and volumes were not disclosed, according to the Reuters report.

The announcement comes ahead of the 24 July expiration of a 10% temporary tariff imposed by the Trump administration on 10 February, the day the Supreme Court struck down US President Donald Trump's tariffs under the International ​Economic Emergency Powers Act.

The trade agency ​is also expected to soon unveil the findings of another major Section ​301 probe into ⁠the buildup of excess industrial capacity in 16 trading partners, including China.

The USTR said it would accept public comments on the proposed tariffs and other remedies through 6 July, with a public ​hearing scheduled for 7 July.

Dr Mohammad Abdur Razzaque, the chairman of Research and Policy Integration for Development - RAPID), told TBS, "It is unfortunate that a matter as universally important as the eradication of forced labour is being addressed through a unilateral trade investigation. This approach of the US appears to establish a new benchmark not grounded in any widely accepted international legal obligation."

Bangladesh has long supported international efforts to eliminate forced labour and remains committed to strengthening labour standards and enforcement, he mentioned.

"However, the present USTR proposal raises important conceptual, legal and practical questions that warrant careful consideration, particularly given its potential implications for developing countries and for the broader rules-based trading system," Razzaque added.

Bangladesh should support the objective but challenge the conceptual basis of the USTR framework, he said, adding, there is an important distinction between prohibiting forced labour itself, which is widely recognised under ILO conventions and domestic legal systems, and imposing a dedicated border measure that bans imports allegedly linked to forced labour. Bangladesh can argue that the latter represents one regulatory instrument among several and that its absence should not automatically be regarded as an unreasonable trade practice.

"Bangladesh should pursue a dual-track diplomatic strategy. On one track, we should work with other affected economies, including developing and advanced countries, to argue for proportionality, recognition of alternative regulatory approaches through international consensus, adequate transition periods, etc.

"On the other track, Bangladesh should maintain close bilateral engagement with Washington and present a credible domestic reform roadmap. Such a roadmap could include legal review, customs enforcement improvements, supply-chain due diligence measures, labour-inspection strengthening, and institutional coordination," Razzaque further said.

Bangladesh needs to project itself as reform-oriented and cooperative while avoiding unnecessary concessions or confrontation, he opined.

"It has been a matter of concern that the USTR proposal reflects a growing tendency to use tariff threats to advance regulatory norms that have not been established through multilateral agreement. While combating forced labour is a legitimate and widely shared objective, making market access conditional on a specific US-preferred regulatory model risks weakening the MFN-based trading system and further fragmenting global trade governance," Razzaque concluded.

Bangladesh is one of the fastest-growing economies, with expanding trade and GDP growth of around 4 percent. As a major South Asian trading hub, it attracts many foreign companies. While the country aims to become a developed nation by 2041 and continues progress towards the Sustainable Development Goals (SDGs), sustainable advancement requires looking beyond trade and economic indicators. The priority, I believe, should be a stronger focus on human capital development.

Human resources (HR) plays a vital role in corporate success by upholding company values, ensuring legal compliance, managing employees and mitigating risk. Today, HR managers face the challenges of rapid innovation, growing regulatory demands and increasingly complex operations. While compliance and HR are closely linked, they remain distinct functions. Effective coordination between the two is essential to maintain integrity and productivity.

Bangladesh produces around 750,000 graduates each year. National University accounts for about 450,000 of them, yet nearly 70 percent of its curriculum is considered misaligned with industry needs. Meanwhile, the economy generates around 300,000 formal jobs annually. Between 2016 and 2022, 8.7 million jobs were created for the 14 million young people who reached working age during that period. Bangladesh’s labour force stood at around 77 million in 2024, with an employment rate of 61.9 percent.

Most companies hire fewer than 10 employees a year. So, who succeeds in such a competitive environment? The phrase “managers hire attitude, not skills” reflects a hiring philosophy that prioritises mindset, character and coachability over technical ability. Yet 62 percent of employers report that young job applicants are underprepared or unsuitable for the roles they seek. There is also a shortage of skilled managers capable of training new entrants. Experience is often valued more highly than potential. Technology presents another challenge. By 2030, AI and automation could displace 20 percent to 30 percent of jobs in developing countries, including Bangladesh.

Against this backdrop, HR managers need a broad mix of soft skills, technical expertise and HR-specific competencies, as well as opportunities for continuous professional development. Recent global workforce and HR reports show that about 90 percent of executives plan to maintain or increase investment in upskilling, reskilling and workforce development in response to AI and labour market transformation. This reflects a strong commitment to learning and development.

These capabilities should be embedded in current and future managers through training and professional development and should also be considered during recruitment. Analytical thinking, active learning, problem-solving, stress tolerance, adaptability, social influence and leadership are essential qualities for HR and compliance professionals. Equally important is the ability to use technology effectively and navigate increasingly digital workplaces.

Empathy and emotional intelligence are also critical. HR professionals must respond effectively to unexpected situations, maintain discretion, uphold ethical standards and manage sensitive matters responsibly. Empathy and compassion help create supportive workplaces and strengthen employee engagement. Strong interpersonal communication skills are another key requirement. Effective communication shapes relationships, resolves conflicts and improves organisational performance. Coaching helps employees improve future performance, while counselling addresses emotional and psychological concerns. Both are important tools for supporting people in the workplace.

In Bangladesh, the outdated education system remains one of the greatest barriers to meeting the demands of a rapidly evolving job market. We continue to rely heavily on methods established nearly a century ago, particularly memorisation-based learning. If we want to compete globally, education reform must be the starting point. Competition today extends far beyond local industries. The global marketplace is the real arena. Adapting to change will help us remain competitive, but embracing change proactively will enable us not only to keep pace but also to lead with confidence in a rapidly evolving world.

The government is preparing to submit a three-year reform roadmap to the United Nations in a final effort to secure a postponement of Bangladesh's graduation from the least developed country (LDC) category until November 2029, despite a UN committee recommending a "shorter" extension.

A high-level meeting chaired by Finance Minister Amir Khosru Mahmud Chowdhury yesterday (3 June) reviewed and finalised a draft 25-point action plan that will be sent to the UN Committee for Development Policy (CDP) following the national budget announcement.

The reform commitments had already been presented to the CDP during a virtual meeting on 29 April, officials said. The proposed reforms are scheduled to be implemented between 2026 and November 2029 by various ministries and agencies, they said.

Officials said the central strategy hinges on demonstrating visible progress, monitored by a newly proposed oversight committee led by the finance minister, which will meet monthly to evaluate domestic implementation.

A senior official familiar with the discussions, on condition of anonymity, told TBS that the government plans to submit a formal letter to the CDP within the next two weeks outlining its commitments and implementation framework.

"The finance minister is highly committed to these reforms and emphasised during the meeting that they are necessary for the country's economic interests," the official said.

Based on an ERD press release, the country's newspapers yesterday published news that the CDP recommended that the United Nations General Assembly extend Bangladesh's preparatory period for LDC graduation until November 2029. But the CDP actually meant a shorter extension rather than a specific three-year period.

Reform commitments

The draft document, titled "Action Plan for Bangladesh's Preparation for LDC Graduation (2026-2029)," focuses on strengthening macroeconomic stability, financial sector governance, fiscal reforms, business deregulation, export diversification and institutional capacity.

The government has pledged to begin implementing measures to ensure macroeconomic stability from June 2027, with implementation continuing until November 2029. The plan includes stronger coordination between monetary and fiscal policies, regular assessment of demand and supply conditions for essential commodities, and trade policy adjustments to maintain uninterrupted supplies.

Bangladesh will also commit to addressing debt vulnerabilities identified in debt sustainability assessments conducted by the International Monetary Fund and the World Bank.

Financial sector reforms feature prominently in the draft roadmap. The government plans to strengthen Bangladesh Bank's supervisory authority and restore discipline across the financial sector by December 2027. It also intends to conduct annual comprehensive reviews of all commercial banks, covering asset quality, capital adequacy, liquidity, governance and stress testing, with corrective measures taken where necessary.

The reform programme further includes anti-corruption initiatives and governance improvements. The government aims to expand digital public service delivery systems to reduce direct interactions between citizens and officials while strengthening transparency, accountability and parliamentary oversight through November 2029.

Deregulation and tax reforms

Business deregulation is another major pillar of the proposed reforms. By June 2027, the government plans to establish a unified digital application platform covering licences, certificates, approvals and renewals. Licensing procedures will be simplified, provisional licences will be issued within seven days and the validity period of licences and permits will be extended from one year to five years.

The government also intends to make the National Single Window fully operational within the same timeframe.

Under fiscal reforms, state-owned enterprises are expected to become commercially viable by June 2028, with selected entities potentially listed on the stock market. The government has also pledged to broaden the tax base and strengthen transparency and accountability in the collection of fees and non-tax revenues.

Plans include integrating data systems between banks and the Central Depository Bangladesh Limited by June 2028 to facilitate automated reporting of savings and investment information.

Other measures include reducing the discretionary powers of tax officials, fully automating the National Board of Revenue and its commissionerates, limiting tax exemptions and strengthening value-added tax compliance.

To monitor implementation, the government intends to establish a joint government-private sector task force.

Export competitiveness and infrastructure

As part of efforts to diversify exports ahead of graduation, the government plans to provide targeted incentives and policy support to pharmaceuticals, leather, information and communications technology, agro-processing, jute and light engineering industries.

By December 2028, authorities aim to improve central effluent treatment facilities for the tannery sector and operationalise the Active Pharmaceutical Ingredient Park.

The government also intends to reduce logistics costs from 15% to 10% by June 2029 through port modernisation, customs reforms, improved multimodal connectivity and the development of integrated industrial and logistics corridors.

In the energy sector, Bangladesh plans to encourage investment in renewable energy, develop a carbon market policy and expand green financing initiatives.

The draft roadmap also outlines measures to secure Generalised Scheme of Preferences Plus benefits in the European Union after graduation. Bangladesh may additionally seek to conclude free trade agreements with South Korea, Oman, the United Arab Emirates, Hong Kong and New Zealand by 2029.

The government has pledged continued support for exporters seeking to meet standards in major markets, including the European Union, the United States, Japan, South Korea, China and regional trading partners.

A revised Smooth Transition Strategy reflecting current domestic and global realities is expected to be completed by March 2027, while progress on implementation will be reviewed monthly.

What happens next?

According to officials, the CDP's recommendation will now be considered by the United Nations Economic and Social Council (ECOSOC) at its meeting on 22-23 July. ECOSOC is expected to forward the recommendation to the United Nations General Assembly.

If procedural constraints prevent ECOSOC from formally adopting the recommendation, Bangladesh may have to seek approval directly from the General Assembly during its September session.

Experts said a favourable recommendation from ECOSOC would improve Bangladesh's prospects of securing an extension at the General Assembly.

Although Bangladesh has met all three formal graduation criteria, analysts believe the government's request for additional preparation time prompted the CDP to recommend a shorter extension as a special accommodation.

They stressed that commitments alone would not be sufficient. Bangladesh must demonstrate measurable progress on reforms and clearly identify areas where international institutions such as the IMF, the World Bank and the Asian Development Bank are involved.

Several experts described the CDP's recommendation as an exceptional concession rather than a precedent for future requests from other LDCs.

This year, Bangladesh is scheduled to graduate from LDC status alongside Nepal and Laos. However, Nepal has also submitted a letter to the CDP seeking a postponement.

After Prime Minister Tarique Rahman sent a letter to the CDP on 6 April requesting a three-year deferment of Bangladesh's graduation, the committee subsequently decided to recommend a postponement.

At that time, however, the CDP's assessment report on Bangladesh's preparedness for LDC graduation had not yet been completed. As a result, the report was not attached to the resolution sent to the ECOSOC. The assessment will now be forwarded separately to ECOSOC.

Under the CDP's recommendation, ECOSOC may endorse a postponement of one year, two years, or the full three years requested by Bangladesh. The final decision, however, will be taken through a vote at the United Nations General Assembly.

What experts say

Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue and a member of the CDP, said the extension represents a unique opportunity for Bangladesh.

"This is an exceptional opportunity for Bangladesh. The government should quickly communicate its reform commitments and establish a monitorable implementation framework. That could positively influence consideration by both ECOSOC and the UN General Assembly," he said.

He added that LDC graduation should be viewed not only as an economic issue but also as a political commitment that reflects the country's future development trajectory.

Zahid Hussain, a former lead economist at the World Bank's Dhaka office, said the CDP's recommendation was conditional on Bangladesh implementing fiscal, banking and structural reforms to diversify the economy.

"Bangladesh comfortably meets all graduation criteria even after accounting for the adverse factors identified to make the case for deferment," he said.

According to Zahid, the recommendation reflects concerns about the country's capacity to implement its Smooth Transition Strategy amid challenges arising from the Middle East crisis, disruptions to global trade and the country's political transition.

"Two things are clear. First, this is the last extension if it makes it through the next steps. Second, the period of extension will be less than three years," he said.

The economist added that while approval remains uncertain, Bangladesh's prospects of securing an extension have improved significantly.

The internet regulator has granted the Chittagong Port Authority (CPA) temporary access to 20 MHz of spectrum in the 3.5 GHz band to test a private 5G network aimed at transforming the Chattogram seaport into a smart port.

Under a decision taken at a Bangladesh Telecommunication Regulatory Commission (BTRC) meeting, the 20 MHz spectrum in the 3780 MHz to 3800 MHz band will be provided free of charge for a three-month trial period ending on 31 August.

The CPA had earlier applied to the regulator for this allocation.

The spectrum will be used to build a private 5G network designed to modernise port operations through high-speed, secure and reliable communications.

According to BTRC application documents, the system will support port automation, remote crane operations, IoT-based logistics management, automated container handling and real-time monitoring of port activities.

BTRC technical teams will monitor and inspect spectrum use and the performance of private 5G applications throughout the trial. After completion, the CPA must submit a detailed report to the regulator on the results
The initiative is part of the “Port Modernisation and Digital Connectivity Enhancement Project” under the Ministry of Shipping.

The CPA also plans to establish a 5G long-term evolution (LTE)-based encrypted communication system within the port to improve operational security, ensure stable connectivity and strengthen data protection.

The network is expected to deliver ultra-low-latency communications for critical logistics operations across the port.

BTRC officials said private 5G networks are still an emerging technology in Bangladesh, although several developed countries already use them commercially in ports, factories, logistics hubs and utilities.

Countries including the United States, Germany and Switzerland have allocated parts of the 3.5 GHz band for private 5G use in smart ports, airports, logistics hubs and industrial automation.

Germany is a leading example, with its regulator reserving the 3.7 GHz to 3.8 GHz band for private industrial 5G networks, enabling standalone systems in ports, factories and airports.

Officials said a dedicated, CPA-controlled communication system is increasingly important given the strategic nature of port operations and the need for secure and reliable connectivity.

The proof-of-concept trial will allow authorities to test the system in a real-world environment before deciding on a permanent CPA-owned network.

As part of future spectrum planning, the BTRC is also considering reserving the upper portion of the 3.5 GHz band for private 5G use in key government institutions and sensitive infrastructure projects, including ports and smart utilities.

Under the proposal, 50 MHz between 3310 MHz and 3360 MHz may be reserved for law enforcement and security agencies, while 400 MHz would be allocated to mobile operators for commercial 5G services. A further 40 MHz between 3760 MHz and 3800 MHz would be set aside for private 5G networks.

According to the BTRC spectrum roadmap, around 460 MHz in the 3.5 GHz band is expected to be opened for international mobile telecommunications services in 2027.

The final price for 3.5 GHz spectrum in Bangladesh has not yet been fixed, although a recent auction in Pakistan set a base price of around $0.65 million per MHz.

The commission said that if spectrum prices are later set, the CPA would need to pay the required charges for the test-and-trial period before any permanent commercial allocation.

Under the approval conditions, the CPA must also obtain prior permission from the BTRC before importing or installing any radio equipment for the trial.

BTRC technical teams will monitor and inspect spectrum use and the performance of private 5G applications throughout the trial. After completion, the CPA must submit a detailed report to the regulator on the results.

The allocation was approved under the Bangladesh Telecommunication Act, 2001 (amended in 2026), which allows the commission to support the introduction, research and testing of new technologies, said BTRC Chairman Md Emdad ul Bari.

“As this spectrum band is being used globally for IoT, industry development, public infrastructure and individual use, we have allowed it on a trial basis,” he added.

He also said the new regulation will enable the commission to support experimental deployment and testing of many emerging technologies in the future.

Oil prices trended lower on Tuesday following the previous session’s sharp gains as ​the market remained cautious about progress in US-Iran peace talks.

US President Donald Trump said on Monday talks with Iran were ‌ongoing, while Tasnim news agency reported earlier that Tehran had suspended indirect negotiations with Washington.

Brent crude futures lost 53 cents, or 0.56 percent, to $94.45 a barrel at 0649 GMT, while US West Texas Intermediate fell 56 cents, or 0.61 percent, to $91.60 a barrel.

Both benchmarks rose more than 5 percent in ​the previous session, having posted a monthly loss of more than 16 percent in May on hopes of a ​peace deal.

“While markets had hoped to move past the uncertainty amid prospects of a potential deal, nothing appears to have changed for oil as of this morning,” said Priyanka Sachdeva, senior market analyst at ​Phillip Nova.

In an interview with CNBC on Monday, Trump said he did not mind if the talks were over. But shortly ​after, he issued a social media post saying talks with Iran were continuing and told ABC News that he expected a deal to extend the ceasefire and reopen the Strait of Hormuz “over the next week”.

“The market is currently focused on whether there’s any concrete progress or setbacks ​in US-Iran negotiations, the tone and substance of statements from both sides (particularly Iran’s threats regarding the Strait of Hormuz), ​and actual physical tanker movements through the waterway,” said Tim Waterer, chief market analyst at KCM Trade.

The status of the US-Iran negotiations at ‌any given point will ultimately determine whether the current risk premium stays embedded in oil prices or starts to unwind, Waterer added.

Lebanon on Monday announced a partial ceasefire between Hezbollah and Israel, in what would amount to a limited de-escalation of a conflict that has inflamed the broader war with Iran.

Iran has effectively halted nearly all non-Iranian shipping into and out of the ​Gulf since the war began, ​choking off about a fifth of global oil and liquefied natural gas flows and driving prices up by 50 percent or more.

The government has decided to introduce a 0.25% fee on guarantees issued against loans taken by state-owned, autonomous, and government-controlled entities.

In a circular issued by the Ministry of Finance today (2 June), it stated that the fee will apply to both local and foreign loans backed by state guarantees.

According to the circular, the Finance Division, under the authority of the Public Debt Act 2022 and the State Guarantee or Counter-Guarantee Policy 2014, will impose a one-time guarantee fee on loans taken under sovereign backing. The fee must be deposited into the government treasury through the designated payment system.

A Finance Division official told The Business Standard that the measure applies when state-owned companies, public entities, or joint ventures seek loans from domestic or international sources that require government guarantees. "The move aims to discourage excessive reliance on sovereign guarantees while also increasing revenue collection."

"State-owned and autonomous institutions often rely on borrowing to finance development projects, with lenders frequently requiring government guarantees as a condition. These guarantees are issued by the Finance Division on behalf of the government," the official added.

According to the ministry, by December 2025, the government had provided guarantees worth Tk106,973 crore for various domestic and foreign loans. Of this, Tk58,383 crore was in foreign loans and Tk48,590 crore in domestic loans.

More than half of the guaranteed loans are in the power sector. Guarantees have also been extended to agriculture-related loans and to Biman Bangladesh Airlines.

The government has also guaranteed foreign borrowing by the Bangladesh Petroleum Corporation (BPC) for fuel imports, as well as agricultural loans from Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank (Rakub).