Unilever Consumer Care reported that its revenue dropped by 8% in the first quarter of this year.

According to the financial statement for the January-March period of 2026, the health drinks like Horlicks producer posted a revenue of Tk87.44 crore, which was Tk95.40 crore during the same quarter a year ago.

Following the revenue decline, its net profit also dropped by 12% year-on-year to Tk12.11 crore in the first quarter.

At the end of March, its earnings per share stood at Tk6.29, which was Tk7.13 a year ago.

In alignment with the BNP government's election manifesto, the finance ministry will prioritise 12 sectors in the upcoming FY2026-27 budget, including ensuring advanced education and healthcare, job creation, and food and energy security.

The Finance Division has instructed various ministries to submit their budget estimates for the next fiscal year and projections for the following two fiscal years to the finance ministry by 30 April, keeping these priorities in mind.

A circular issued today (20 April) emphasised prioritising human resource development, social protection, women and child development, poverty alleviation, the expansion of creative economic activities, tackling climate change, and bringing dynamism to economic development.

The first budget of the BNP government is likely to be announced on 11 June.

The estimated budget size is Tk9.30 lakh crore, which includes Tk3 lakh crore for development expenditure and Tk6.30 lakh crore for operating expenditure.

Pioneer Insurance PLC posted a 25% year-on-year growth in net profit in the first quarter of 2026, driven largely by a sharp cut in management expenses, even as its premium income declined significantly.

According to the company's financial statements for the January–March period, net profit after tax rose to Tk16.59 crore, up from the same period last year. Earnings per share (EPS) also increased to Tk1.70, compared to Tk1.36 a year earlier.

However, the insurer's premium income dropped by 19% to Tk77.72 crore during the quarter, reflecting a broader slowdown in the general insurance sector.

The profit growth was mainly supported by a 45% reduction in management expenses, which fell to Tk16.37 crore. The decline followed a regulatory move by the Insurance Development and Regulatory Authority (IDRA) to cancel agent commissions for non-life insurers, easing operational costs.

Despite the improved bottom line, the company faced rising claims, which surged by 64% year-on-year to Tk12.11 crore during the quarter.

Commenting on the performance, Syed Shahriyar Ahsan, chief executive officer of Pioneer Insurance, said the industry is currently navigating a challenging environment.

"The cancellation of agent commissions has significantly reduced business volumes that were previously driven by agents," he told The Business Standard.

He added that a slowdown in private sector exports and imports, coupled with geopolitical tensions in the Middle East, has further impacted the sector.

According to Ahsan, the general insurance industry experienced a combined premium income decline of Tk221 crore in the first two months of 2026, reflecting sluggish economic activity and the absence of agent incentives.

He also raised concerns over pricing practices among smaller insurers, alleging that some companies are undercutting premiums to secure business. "This creates an uneven playing field for companies that maintain standard pricing and transparency," he said, urging regulators to address the issue.

To stabilise the sector, he suggested reintroducing mandatory motor insurance, citing rising road accidents and the need to expand coverage while improving industry transparency.

Despite the quarterly profit growth, investor sentiment remained cautious. Pioneer Insurance shares declined by 1.13% to close at Tk61.30 on the Dhaka Stock Exchange on Monday.

For the year ended 31 December 2025, the company reported an EPS of Tk4.57 and a net asset value per share of Tk46.97. Based on this performance, its board has recommended a 25% cash dividend alongside a 5% stock dividend, subject to regulatory approval.

The company's annual general meeting is scheduled to be held on 4 May through a digital platform.

Shahjibazar Power Co Ltd, a concern of Youth Group, has reported a staggering 138% growth in its consolidated net profit during the first nine months of the 2025-26 fiscal year, driven by higher operational efficiency and strong contributions from its associate companies.

According to the company's price-sensitive disclosure released on Monday following its board meeting, consolidated net profit reached Tk81.53 crore for the July-March period, while the consolidated earnings per share (EPS) surged to Tk4.37 from the previous year's levels.

This growth was supported by a 15% increase in total consolidated revenue, which climbed to Tk1,055 crore.

The company's performance was even more robust in the third quarter alone, spanning January to March, where consolidated net profit skyrocketed by 254% to settle at Tk24.71 crore.

During these three months, consolidated revenue grew by 13% to Tk331.31 crore, yielding an EPS of Tk1.32.

The company attributed this stellar numerical performance primarily to a substantial increase in its plant factor, which rose to 77% during this period compared to just 55% in the corresponding period of the previous year.

Beyond its core operations, Shahjibazar Power benefited significantly from its diversified investment portfolio.

A senior company official noted that the firm's bottom line was bolstered by substantial earnings from its two associate companies – Midland East Power and Midland Power Company.

Additionally, the company's subsidiary, Petromax Refinery Limited, showed a healthy recovery, with its revenue jumping by 6% to Tk721.32 crore during the nine-month period.

The parent company, Shahjibazar Power, also displayed remarkable standalone strength as its revenue grew by 41% to reach Tk333.71 crore.

On Monday, Shahjibazar Power shares ended 2.12% higher at Tk53.10 at the Dhaka Stock Exchange.

Following a lack of consensus on several conditions during recent talks with the International Monetary Fund in Washington, Finance Minister Amir Khosru Mahmud Chowdhury is set to seek Prime Minister Tarique Rahman's guidance on the matter, according to ministry sources.

Sources in the finance ministry said the minister is expected to meet the PM this week, along with members of the delegation who attended the IMF meetings, to brief him on the discussions and decide the next course of action.

Further engagement with the IMF is likely to depend on that guidance.

A senior finance ministry official, speaking on condition of anonymity, told The Business Standard that the IMF has outlined its position on three major issues that Bangladesh is expected to implement from the next fiscal year: eliminating all forms of tax exemptions, withdrawing government subsidies, and allowing the exchange rate to become fully market-based.

While these conditions featured in negotiations with previous administrations, the IMF is now pressing the BNP government for a concrete implementation plan.

"There is a direct relationship between implementing these measures and an increase in consumer expenses. Therefore, decisions on these issues will have to come from the highest political level of the government," the official said.

"If tax exemptions are removed as per the conditions, the tax burden will fall on consumers, increasing costs and potentially fuelling inflation. Similarly, withdrawing subsidies will raise the prices of goods, further increasing expenses," the official added.

Sources at the NBR said its chairman, Abdur Rahman Khan, who attended the IMF meetings in Washington, held a meeting on Sunday (19 April) with senior officials to review the outcomes and explore ways to reduce tax exemptions and boost revenue collection.

According to the latest data published by the NBR for FY2022-23, the revenue board collected Tk3.25 lakh crore while granting tax exemptions worth approximately Tk2.75 lakh crore – nearly 85% of the total collection.

Meanwhile, in the current fiscal year (FY26), government spending on subsidies, incentives and cash support is estimated at Tk1.12 lakh crore.

Concerns over implementation

Given the prevailing economic landscape, economists argue that the new administration will find it challenging to overhaul all tax exemptions and subsidies, urging the government to adopt a more pragmatic approach.

Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), told TBS that the government needs to strike a balance.

"The government must increase revenue. However, it will be difficult to eliminate all exemptions at once. A realistic decision should be reached through discussions," he said.

"Tax exemptions exist not only in Bangladesh but also in other countries. These exemptions need to be rationalised. If all are removed at the IMF's insistence, it may create distrust among investors who have made investments based on government commitments," he added.

He suggested negotiating a two- to three-year timeline with the IMF. "Failure to reach an understanding with the IMF would send a negative signal. It may become difficult to secure loans from other development partners," Mustafizur added.

An NBR official told TBS that if IMF conditions are implemented, many existing exemptions would no longer be allowed. This could lead to the imposition of VAT on essential services such as agriculture, food, education and healthcare, raising costs for consumers.

Another senior NBR official warned that removing exemptions would bring several key sectors under the tax net, adding that even remittances could potentially be taxed.

Gradual reduction underway

Over the last three years, the NBR has been implementing a phased plan to curb tax exemptions, retaining them only for essential sectors and consumer-facing goods while introducing sunset clauses to ensure other incentives expire within a set timeframe.

In income tax, rates have been increased in sectors such as poultry and fisheries, effectively reducing exemptions.

Tax incentives for local manufacturing of products such as electronics, home appliances, mobile phones and semiconductors are also being gradually phased out, with timelines for full withdrawal outlined in last year's budget.

The standard VAT rate currently stands at 15%, and any lower rate applied to a sector is treated as a tax exemption.

To support export competitiveness, exporters benefit from reduced tax rates. They are exempt from import duties on raw materials and do not pay VAT on locally sourced inputs. Export-oriented firms are subject to a corporate tax rate of 12%, compared with 27% for non-listed companies.

The government raised fuel oil prices Saturday midnight to rein in mounting subsidies. The adjustment has had an immediate knock-on effect on transport fares and commodity prices, reflecting Bangladesh's heavy reliance on diesel-powered logistics.

The key question, however, is whether these cost increases are proportionate to the fuel price hike or significantly inflated. Take freight rates as an example. The cost of hiring a covered van from Dhaka to Chattogram jumped 30-40% to Tk20,000-Tk25,000 on Monday, up from Tk14,000-Tk15,000 on Friday.

Pickup fares from Bogura and Jashore have also risen from Tk12,000 to Tk15,500. This is despite diesel prices rising by around 15% to Tk115 per litre.

A typical truck or covered van consumes roughly 80-100 litres of diesel on the Dhaka-Chattogram route. Even at the higher end, the fuel cost increase would be about Tk1,500 per trip. In practice, however, freight charges have gone up by Tk6,000-Tk10,000.

"There is a shortage of vehicles due to fuel constraints. Those still operating are losing time refuelling, often stopping at multiple filling stations," said Syed Md Bakhtiar, executive president of the Bangladesh Truck and Covered Van Owners' Association.

In Dhaka's wholesale hubs, these inflated overheads have translated into immediate hikes for daily staples, leaving low- and middle-income households to tighten their belts. Egg prices, for instance, have risen by Tk2-Tk2.5 per piece, due to higher transport costs.

But the actual impact of the fuel hike should be no more than 20 paisa per egg, according to Mohammad Halim, a wholesale trader at Moghbazar.

Rice prices have increased by Tk4 to Tk6 per kg over the past week. Miniket rice is now selling at Tk82 to Tk85 per kg, up from Tk78, while Najirshail has risen to Tk88 to Tk94 per kg. Local lentils have increased by Tk10 per kg, now selling at Tk150 to Tk160.

Edible oil and sugar prices have also climbed. Loose soybean oil is selling at Tk170 to Tk175 per litre, while sugar has risen to Tk135 to Tk145 per kg amid supply shortages.

Vegetable prices have climbed across the board, particularly for items sourced from outside Dhaka. Brinjal now sells at Tk100-Tk120 per kg, while most other vegetables, including gourds, beans and leafy varieties, have moved into the Tk70-Tk120 per kg range. Even staple items like tomatoes, carrots, onions and cabbage have edged higher, tightening household budgets.

Spice prices have risen more sharply in comparison, with cardamom seeing the steepest jump, nearly doubling to Tk4,500–Tk6,099 per kg. Cumin, cinnamon, cloves and bay leaf have also recorded steady increases, adding sustained pressure on kitchen costs.

While poultry has remained a relative silver lining – with Sonali chicken at Tk360 to Tk380 and broiler chicken at Tk170 to Tk180 per kg – the fish market has seen a broad increase of Tk40 to Tk50 per kg.

Large tilapia is now selling at Tk300 per kg, rohu at Tk450, and pangash at Tk200, while the prized hilsa is fetching between Tk2,200 and Tk3,000 per kg.

Beyond transport, wholesalers like Khalek Uddin at Moulvibazar say that higher energy prices are driving up cold storage and packaging costs, further narrowing the margins.

At Karwan Bazar, trader Nurul Islam noted that the relentless rise in procurement costs has left merchants with little choice but to pass the buck to consumers, who now face an increasingly difficult battle to manage basic food expenses.

Once upon a time, banks in Bangladesh were regarded as highly reliable financial institutions. Any walk-in customer could open an account at a nearby branch and deposit their money without much concern for risk, as the perceived risk was virtually zero.

Financial Institutions (FIs), however, were considered less trustworthy. Only individuals with personal connections to FI officials or those familiar with their operational framework and oversight by the central bank, Bangladesh Bank, were willing to place funds there—mainly to earn higher returns than banks offered.

Public confidence in FIs deteriorated following the collapse of several institutions over the past decade. Although banks continued operations during this period, the acute liquidity crisis of Farmers Bank Ltd. in 2017 significantly undermined public trust in the banking sector.

This incident compelled people to reconsider the safety of keeping their savings in banks, intensifying concerns over the sector’s credibility and stability. Nevertheless, depositors did not withdraw their money en masse. Many banks, however, have since experienced prolonged financial distress and face substantial challenges in managing operational funds.

The required regulatory measures in 2024–25 constrained fund inflows, slowing deposit growth and, in some cases, increasing withdrawals, leading to a major setback for the sector and further erosion of public confidence.

Numerous factors contribute to vulnerabilities in the banking sector, most of which fall under the broad umbrella of corporate governance failure. Corporate governance encompasses institutional structure, internal systems, policies, implementation mechanisms, oversight processes, internal controls, audit functions, and consistent reporting to Boards and regulators.

While structural frameworks often align with global standards, deficiencies persist in implementation and oversight. Weaknesses in monitoring, execution of responsibilities by management and Boards, and ineffective audit functions—including internal audit—reflect a gap between formal compliance and the competence required for robust governance.

Senior management and boards should ensure strict compliance with policies across all stages of credit and investment operations:

(a) initial screening, including checkpoints such as the coachability of owners, legal compliance, financial performance, and sectoral outlook;

(b) rigorous due diligence covering financial and marketing performance, legal compliance, risk assessment, and management frameworks, concluding with structured investment decisions addressing repayment terms, security coverage, and monitoring as per agreement and covenant clauses;

(c) ongoing monitoring of borrowers’ operations and financial performance, ensuring adherence to agreements;

(d) effective functioning of Internal Control and Compliance Departments and Audit Committees; and

(e) implementation of early alert systems to identify and mitigate emerging risks.

Management must adhere strictly to these policies, while Boards should review implementation through regular reports and provide guidance, exercising oversight without interference, including political influence. Such processes were grossly neglected in vulnerable banks.

In practice, these policies were often only on paper, with many investments pre-decided due to personal connections or political influence (“name-lending”). Investment memos were sometimes based on illegal or non-compliant financial statements, with insufficient knowledge of the legally acceptable requirements under the Companies Act 1994.

Banks failing to comply with rigorous policies accumulated poor-quality loan portfolios and generated misleading reports that obscured asset classifications, creating persistent warning signals. The undue flexibility of Boards and regulators, instead of enforcing early corrective measures, contributed to recurring weaknesses, ultimately bringing banks to the brink of collapse.

All distressed banks should undergo independent compliance audits to identify wrongdoing and strengthen governance.

To restore public trust, they must ensure adequate capitalization, timely depositor repayment, prudent lending, regulatory compliance, transparent reporting, robust risk management, strong internal controls, and accountable, ethical leadership with effective oversight by Boards, audit committees, and regulators.

The writer is a fellow member of ICAB and partner at Basu Banerjee Nath & Co., Chartered Accountants.

The American Apparel and Footwear Association (AAFA), along with several other organisations, has urged the United States Trade Representative (USTR), the US government’s chief trade body, not to impose any new tariffs on countries currently under investigation over production capacity.

In a letter sent to the USTR on April 15, the AAFA warned that additional tariffs on supplying countries could raise costs for American consumers.

Last month, the USTR launched an investigation into 60 economies, including Bangladesh, over alleged failures to address issues related to production capacity and forced labour.

Bangladesh is scheduled to take part in a virtual USTR hearing on the matter on April 29.

The AAFA said in its letter that the US already imposes relatively high tariffs on textiles, apparel, footwear and accessories, even though these products contain significant US value, including intellectual property, raw materials such as leather, and textile inputs like yarns and fabrics.

As a result, textiles, apparel, footwear and travel goods face higher effective tariff rates than most other sectors.

The letter added that this burden disproportionately affects the industry, even though many of these goods are no longer produced in commercial quantities in the US.

It further said that although some countries identified in the investigation may run trade surpluses in certain product categories, these do not necessarily reflect structural excess capacity or practices that distort or restrict US commerce.

The concept of structural excess capacity does not reflect conditions in the US industry, it added.

Instead, the AAFA said, these trade flows are shaped by globally integrated supply chains, where production capacity is developed and used based on business decisions, long-term customer relationships and changing demand patterns.

The association urged the USTR to avoid any action that would further increase tariffs on these goods.

It also said the broad, multi-country investigation appears to be aimed at a pre-determined outcome rather than a focused review of specific practices.

The AAFA added that the investigation may be used to recreate tariff rates and structures that existed under the International Emergency Economic Powers Act (IEEPA).

It also cited Treasury Secretary Bessent, who said, “We will get back to the same tariff level for the countries. It will be just in a less direct and slightly more convoluted manner.”

The association warned that this approach could weaken the government’s ability to properly investigate and address specific foreign trade barriers.

In conclusion, the letter said the industry should not face unintended negative impacts from these investigations. It warned against further tariffs on an already heavily taxed sector, saying such measures would raise costs for American families while doing little to boost domestic production due to existing capacity and investment limits.

BANGLADESH EXPORTS SHOW STRONG GROWTH IN US MARKET

For example, in 2025, clothing exports -- accounting for 86 percent of Bangladesh’s total exports to the US -- rose by 12.36 percent to 266.15 crore square metre equivalents (SME). In value terms, exports increased by 11.75 percent to $8.20 billion compared with 2024, according to the USTR.

Footwear exports from Bangladesh reached 1.78 crore pairs, a rise of 76.43 percent in 2025 compared with 2024. In value terms, footwear exports grew by 52.67 percent to $391.77 million.

Travel goods exports increased by 26.32 percent to 2.15 crore pieces in 2025. Their value also rose by 35.44 percent to $12.37 million, the USTR said.

In another letter, the Forced Labor Working Group (FLWG) of the AAFA, along with 17 other trade organisations, urged the USTR not to impose tariffs linked to forced labour investigations.

They said companies that have invested heavily in compliance systems and are working to eliminate forced labour in supply chains should not be penalised through broad tariff measures that do not distinguish between responsible firms and bad actors.

The letter added that, under Agreements on Reciprocal Trade (ART) and related framework negotiations with the US, several economies -- including some covered by the investigation --have already committed to protecting labour rights and banning imports made with forced labour.

A consistent theme in global oil markets since the US and Israel attacked Iran is that the effective closure of the Strait of Hormuz will be short-lived, and therefore so will the disruption to the supply of crude and refined products.

That expectation has consistently been reflected in pricing for crude oil futures, which have risen sharply since ​the conflict began on February 28, but are still well short of the highs reached in the wake of Russia’s invasion of Ukraine in 2022.

In effect, the paper crude market has believed ‌US President Donald Trump’s slew of social media posts since the bombing started that the conflict will be short, and result in Iran accepting US terms for a peace deal.

The problem is that the reality on the ground doesn’t match the social media claims, and the longer the Strait of Hormuz remains closed the more severe the energy crisis will become, especially in Asia.

Brent crude futures fell 9.1 percent on April 17 to end at $90.38 a barrel in the wake of Trump’s post that the Strait of Hormuz was fully ​open. But they jumped 6.9 percent in early Asian trade on Monday to $96.59 when it became clear the waterway was still closed.

The latest round of optimism that the Strait of Hormuz would re-open began after a Trump social media post ​on April 17 that the waterway that carried as much as 20 percent of the world’s crude oil and refined product supply prior to the war was “fully open and ready for full passage.”

Trump’s assertion was even backed by elements within the Iranian government, but the optimism proved short-lived as Iran’s Islamic Revolutionary Guards Corps moved to keep the strait closed, given Trump’s decision to maintain a US ​naval blockade of Iranian ports.

There are several questions that the market should be asking about the current situation.

Does this mean that the Strait of Hormuz is now effectively being closed by the United States?

Would it re-open if Trump ended ​the blockade of Iranian ports?

Is there sufficient trust between the warring parties to accept a principle that the strait should be open to all?

Who is really in control in Iran, and are they willing to negotiate with a US administration that has a track record of abandoning agreements?

While these are issues for debate, the only fact that really matters is that the strait isn’t open and the risk of attack is likely to keep it that way for the hundreds of vessels waiting either side of the crucial waterway.

SUPPLY STRESS

In ​the meantime crude oil and refined product supply chains are becoming more stressed, especially in Asia, which was the destination for about 80 percent of all the shipments via the Strait of Hormuz prior to the conflict.

While crude futures have ​largely traded on the daily news flow and an underlying optimism that the conflict will be of a limited duration, physical oil and refined products have reflected a more dire near-term supply situation.

Refined products in the Asian trading hub of Singapore have ‌remained at extreme levels, with jet fuel ending at $204.13 a barrel on April 17, more than double the $93.45 close on February 27, the day before the war started.

Gasoil, the building block for diesel, ended at $145.27 a barrel on April 17, up 59 percent since the conflict started, although down from the record $199.89 hit on March 30.

The problem for Asia is that the worst of the supply crunch is probably still to come, as crude shipments into the region fall sharply.

Asia’s seaborne crude imports are estimated at 20.62 million barrels per day (bpd) in April, down from 22.36 million bpd in March, according to data compiled by commodity analysts Kpler. However, both March and April are well down on the 26.76 million bpd average for the ​three months prior to the attacks on Iran.

The situation ​is especially worrying for countries that are major refining centres and exporters of fuels to the region.

Singapore’s crude imports are forecast at 388,000 bpd in April, down from 715,000 bpd in March and 980,000 bpd in January.

South Korea’s crude imports are estimated at 1.68 million bpd in April, down from 2.24 million bpd in March and 2.74 million bpd in January.

Japan’s April imports are expected to be ​921,000 bpd, a drop from 1.63 million bpd in March and 2.16 million bpd in January.

Only India is bucking the trend, with April imports estimated by Kpler ​at 4.67 million bpd, up from 4.45 million bpd in March, but below January’s 5.15 million bpd.

India has been able to secure Russian oil to help offset the loss of barrels from the Middle East, with 1.64 million bpd arriving in April, up from 1.06 million bpd in February.

Notwithstanding India’s success in sourcing crude from other producers, the problem is that Asia’s supplies are coming under strain and it’s likely that refinery processing rates will have to be cut in coming weeks.

It is when the supply of refined ⁠products becomes more ​constrained that the real economic impact of Trump’s war of choice will be felt.

The question for the paper crude oil market is how ​long can it maintain the hope that the conflict will be over soon, when the reality seems to be heading in the other direction?

Finance authorities are set to seek Prime Minister's guidance as to how far the government can go in complying with the International Monetary Fund conditions to secure hard-term budget-support funds.

Finance Minister Amir Khasru Mahmud Chowdhury will lead his team at the consultation today with Prime Minister Tarek Rahman, officials say, as the IMF lending terms have seemingly outwitted negotiators.

A senior government official who attended last week's Spring Meetings in Washington says the decision has become increasingly complex as the current economic situation leaves little room to fully comply with all the IMF conditions.Global economy analysis

"It is now a political decision rather than an economic one -- whether the government will accept the IMF conditions," the official told The Financial Express.

Key IMF strings binding the release of the next two tranches from a lending package in June 2026 include withdrawal of subsidies, raising the tax-to-GDP ratio to 9.2 per cent, and adopting a market-based exchange rate.

Given the ongoing Middle East conflict, sluggish investment, rising fuel prices, persistent inflation, and a downward trend in exports, the government is unlikely to take any drastic measures in the upcoming budget, the official adds.

"We have found the IMF quite rigid on its conditions this time. It wants the withdrawal of all tax exemptions and the introduction of a single VAT rate, which appears difficult to implement under current circumstances," the official notes.

However, IMF officials have urged the government to undertake reforms early in its tenure to minimize future challenges.

Officials at the National Board of Revenue (NBR) say achieving a tax-to-GDP ratio of 9.2 per cent by FY2026-27 would require an additional Tk 2.0 trillion in revenue collection within the next year.Politics

At a recent coordination council meeting, the government set an NBR revenue target of Tk 6.04 trillion -- an increase by nearly Tk 1.0 trillion from the current fiscal year.

However, the revenue officials fear a revenue shortfall of around Tk 1.0 trillion in the ongoing fiscal year.

Until February, the NBR had collected Tk 2.51 trillion, roughly 50 per cent of the revised target of Tk 5.03 trillion.

Government insiders say the situation has become more complicated as the IMF has taken a firm stance on three key issues that the Ministry of Finance cannot decide on its own.

External financing from multilateral development partners largely depends on IMF assessments and approval. Following the IMF meetings, the NBR chairman held an emergency meeting Sunday to assess the feasibility of complying with the dos.

A senior NBR official has told the FE that achieving the targeted increase in the tax-GDP ratio -- from the current 6.5 per cent to 9.2 per cent -- would require around 50 per cent growth in tax revenue.

"We find these conditions difficult to implement in the current economic environment," the official says.

He adds that scrapping time-bound tax exemptions may not be legally feasible either, while withdrawing subsidies is not practical at a time when the economy is under strain due to the impact of the Mideast conflict.Financial news subscription

"The economy does not have the capacity to absorb a complete withdrawal of tax exemptions at this stage."

However, the IMF has advised the government to implement difficult reforms early in its tenure for long-term economic stability.

"We cannot increase revenue overnight simply by curbing tax evasion or recovering arrears," the NBR official says in clear terms.

The revenue board is currently conducting intensive internal assessments to evaluate the potential impact of implementing the IMF conditions.

Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), suggests the government should prepare a roadmap to implement IMF conditions.

She, however, finds it difficult to implement all conditions by next year, such as withdrawal of all tax exemptions.

"We need IMF funds but the government needs to be cautious as economy is not prepared now to absorb the pressure," she adds.Banking sector news

There are many sectors that need tax benefits and fiscal support to grow, she notes.

The country's capital market began the week on a sluggish note today (19 April), as investors remained cautious following the recent adjustment in domestic fuel prices and ongoing uncertainty regarding the Middle East conflict.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) edged down by approximately 9 points to settle at 5,247.

Market participants remained cautious, refraining from taking fresh positions and instead adopting a wait-and-see stance amid lingering geopolitical and macroeconomic uncertainties that continued to weigh on market momentum.

Despite a relatively steady performance during the mid-session, the early optimism failed to hold as mounting selling pressure in major large-cap scrips eventually eroded the initial gains.

EBL Securities, in its daily market review, noted that the recent hike in domestic fuel prices further reinstated investor caution.

While the benchmark index fell, the blue-chip DS30 index saw a marginal uptick, closing at 1,990. However, the overall market breadth remained bearish, with 223 issues declining against 125 advancing, while 56 remained unchanged.

Trading activity on the premier bourse saw a slight upward trend compared to previous sessions, with total turnover rising to Tk819 crore.

On the sectoral front, the engineering sector dominated market participation, accounting for 18.9% of the total turnover, followed by the textile and general insurance sectors.

However, the majority of sectors recorded negative returns. The paper and printing sector faced the steepest correction, dropping by 1.7%, while the travel and leisure and jute sectors declined by 1.5% and 1.1%, respectively.

In contrast, the general insurance sector emerged as a rare bright spot, posting a 2.2% gain, while the textile and tannery sectors also managed to end the day with marginal positive returns.

Several high-cap stocks acted as significant index draggers during the session, including Islami Bank, Walton Hi-Tech Industries, National Bank, ACI, and Beacon Pharmaceuticals.

On the other hand, turnover leaders included City Bank, Paramount Textile, Khan Brothers PP Woven Bag, Runner Auto, and Acme Pesticides.

Among individual stocks, Runner Auto and Janata Insurance emerged as the top gainers, both surging by 9.94%, while Sonar Bangla Insurance and Prime Textile also posted significant gains.

Conversely, Popular Life First Mutual Fund and Meghna Cement were among the top losers of the session, facing notable price corrections.

The bearish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the key indices both closed in negative territory.

The CSCX ended 5 points lower at 9,035, while the CASPI shed 9 points to settle at 14,751. Turnover at the port city bourse, however, saw an increase, reaching Tk41 crore

Oil prices rebounded more than 6% today (20 April) after tumbling more than 9% on Friday on news the Strait of Hormuz is closed again after both the US and Iran said the other party had violated their ceasefire deal by attacking ships over the weekend.

Brent crude futures jumped $6.11, or 6.76%, to $96.49 a barrel by 2327 GMT and US West Texas Intermediate was at $90.38 a barrel, ⁠up $6.53, or 7.79%.

The US military had seized an Iranian cargo ship that tried to run its blockade, US President Donald Trump said yesterday, while Iran said it would not participate in a second round of peace talks despite Trump's threat of renewed airstrikes.

The United States has maintained a blockade of Iranian ports, while Iran has lifted and then reimposed its own blockade of the Strait, which handled roughly one-fifth of the world's oil supply before the war began almost two months ago.

"Oil markets continue to gyrate in response to ⁠oscillating social media posts by the US and Iran, rather than the realities on the ground which remain challenging for oil flows to resume in a rapid fashion," Saul Kavonic, MST Marquee's head of research, said.

Both contracts posted on Friday their largest daily declines since April 18 after ⁠Iran said passage for all commercial vessels through the Strait of Hormuz was open for the remaining ceasefire period and Trump said Iran had agreed to never close the strait again.

"The announcement of ⁠the Strait opening proved premature," Kavonic said.

"Ship owners will be twice shy about heading towards the Strait again without receiving much more confidence that any announced passage is ⁠real."

More than 20 ships passed the strait on Saturday carrying oil, liquefied petroleum gas, metals and fertilizers, Kpler data showed, the highest number of vessels crossing the waterway since 1 March.

Finance Minister Amir Khosru Mahmud Chowdhury has said that the government will not accept all the conditions of the International Monetary Fund (IMF) in order to take loans.

"Decisions will be taken after safeguarding the interests of the country's people and businesses," he said while speaking with journalists at his office in the Secretariat today (19 April), after returning from the IMF-World Bank Spring Meetings.

Khosru stressed that the relationship with the IMF is not charitable but commercial.

He further said, "There are many ongoing discussions between the government of Bangladesh and the IMF and World Bank, and the issue is not only about the amount of money involved, which many people fail to understand."

He added that loan discussions with the IMF are ongoing and may continue for another 15 to 20 days, or even up to a month.

"We have not fully agreed with the IMF in the discussions. We are reviewing what the IMF is asking for, and we also have our own expectations. We are an elected government, and we will not accept everything just because someone asks us to," Khosru said.

The current government will not take any decision that creates pressure on the people or businesses, he added.

Khosru said discussions with the World Bank, Asian Development Bank (ADB), and Infrastructure Bank have already been completed.

He said the current IMF loan programme is not tied to the months of June or July.

"Many people do not understand this. The current IMF programme was taken under the previous Awami League government and includes many conditions. Its tenure is only seven months. Some of those conditions may not be acceptable to the current government."

"We will decide whether we will proceed with the next programme," Khosru added.

Responding to a journalist's comment that the introduction of the Family Card may have caused the IMF to step back or impose new conditions, the finance minister said there is no connection between the Family Card and IMF loans.

"On the contrary, the Family Card has been widely appreciated. It will help deliver the benefits of the economy to poor people."

When asked whether the increase in fuel prices was made to meet IMF conditions, he said fuel prices have increased globally.

"We are not the only ones who have increased prices. Everyone has asked why we are not increasing fuel prices. In Sri Lanka, fuel prices were increased by up to 25%."

He added, "If we do not increase fuel prices, pressure on the treasury increases, and with the upcoming budget, it is not easy to manage. So, we have increased it only as much as necessary. This has no relation with the IMF."

Asked whether inflation will rise, he said it may or may not increase. "The recent increase in fuel prices is temporary and not significant. Fuel has a small share in the inflation basket."

He further said representatives from the IMF, World Bank, ADB, Infrastructure Bank, and IDB will visit Bangladesh. "All of them want to work with the current government."

He added that their policies align with the government's election manifesto, so they are interested and supportive of cooperation.

Khosru also said that the presidents of the World Bank and the Asian Development Bank will visit Bangladesh.

The World Bank on Friday unveiled a new strategy aimed at helping small island states and other ​small countries better address unique challenges such as remoteness, exposure to shocks and a narrow economic base by ‌focusing firmly on jobs.

World Bank President Ajay Banga discussed the initiative at a closed-door gathering of ministers and central bank governors from 50 small countries held during the spring meetings of the International Monetary Fund and World Bank.

He said the concept was aimed at using differentiated tools to help small ​states attract more private investment, carry out policy and regulatory reforms to make it easier for businesses to operate ​and grow, and ultimately create more jobs.

It will focus on areas such as health, affordable energy, resilient ⁠infrastructure and micro- and small businesses where Bank officials see the greatest opportunities to boost growth, strengthen businesses, and create more and better jobs.

The World Bank Group last year approved a record $3.3 billion in new commitments and guarantees for small states, which face unique economic challenges and are disproportionately affected by shocks, as seen during the war in the Middle East.

"For small businesses, a single hurricane, a sudden surge in imported fuel prices, or a downturn in tourism can undo months of investment and income in a matter of days," the bank said in a blog released with the new strategy.

Banga said the Bank will take a differentiated approach to shape the regional projects it pursues in such countries, and partnerships would be a big component.

"This is not a one-size-fits-all approach. Small states are diverse, and our support will ‌reflect that," ⁠Banga told the finance officials. "We also know the economics are different."

He noted that working in small states costs up to four times more than in larger countries, so the Bank planned to streamline delivery of its services, use more flexible financing and scale solutions to make the most of each dollar.

Some projects are already underway.

In Tonga, for example, the bank will co-finance an urban resilience project with the Asian Development Bank under a mutual reliance ⁠framework agreement, a first-of-its-kind agreement between multilateral development banks.

Banga said more such agreements were planned, including one with the Inter-American Development Bank to expand the approach to the Caribbean. The World Bank was also expanding the tools available to countries, he said.

Better diagnostics were also important, the bank said. ⁠Deeper reports studying the constraints to private-sector–led hiring were underway for Barbados, Guinea-Bissau, Lesotho, Mauritius, Samoa, and Seychelles.

The World Bank could also leverage its power to help drive investments, the blog noted.

For instance, the International Finance Corp, the bank's investment arm, helped fund ⁠development of Botswana's first utility-scale solar project, while the World Bank worked on a parallel project on battery storage to enable the integration of solar projects into the grid.

"The result is not only a solar plant, but a replicable model for how unlocking private finance can open markets and create jobs," the bank said in its blog.

Bangladesh's bond investors are caught in a prolonged limbo, facing stalled coupon payments and expired tenures without redemption, while recovery efforts often drag on for years, typically starting only after the issuers collapse.

The crisis has exposed weak enforcement, delayed legal action and regulatory blind spots, eroding confidence in what was once promoted as a safer investment alternative.

Corporate bonds were marketed as a middle ground between volatile equities and low-yield bank deposits – offering predictable coupons, fixed maturities and asset-backed security. Mutual funds, banks, state-owned institutions and other institutional investors poured money into these instruments on the assumption that risks were limited and well regulated.

That assumption has increasingly proved misplaced.

One of the most telling cases is Regent Spinning Mills, a concern of the now-defunct Chattogram-based Habib Group. In 2015, Regent raised Tk200 crore through a five-year corporate bond to finance expansion. The bond matured in 2020, but investors, including RACE Asset Management and trustee Investment Corporation of Bangladesh (ICB), are still struggling to recover their funds.

Although Regent was formally declared in default in June 2020, legal action to recover the money was initiated only in August 2024. By then, the Habib Group had unravelled: factories were shuttered, Regent Airways grounded and key directors had fled the country amid multiple cases and arrest warrants.

A similar pattern is emerging in Beximco's Green Sukuk Al Istisna'a, where 94% of the five-year sukuk remains unpaid even as its maturity approaches in December 2026. The trustee has proposed extending the tenure by another five years, effectively locking investors in for a decade.

Earlier, a senior Beximco official, requesting anonymity, said that in light of the group's setbacks after 5 August 2024, repaying the principal by 2026 is "not possible", although a five-year extension could make full repayment feasible.

Beximco's owner, Salman F Rahman, remains in jail facing multiple cases, but the company is still paying profit instalments to Sukuk investors.

ICB is also yet to recover Tk325 crore invested in Sea Pearl Beach Resort & Spa's convertible bond, despite collateral backing and an eight-year tenure that is nearing its end.

While corporate bond failures highlight issuer weakness and sluggish trustee action, a separate – and potentially more systemic – risk has surfaced in bank-issued subordinated bonds. These instruments, though governed by similar regulations, are fundamentally different: they are designed to absorb losses in times of stress.

In practice, however, prolonged non-payment and regulatory ambiguity following bank mergers have frozen more than Tk4,000 crore of institutional funds.

Abu Ahmed, chairman of ICB and a former economics professor at Dhaka University, said bonds often appear risk-free because they are backed by collateral. "However, private corporate bonds are not always risk-free, and investors should keep this in mind," he told The Business Standard.

Failure to repay interest or principal, he added, primarily hurts institutional investors and weakens their balance sheets. "Regulators should take measures against defaulters to protect investors' interests."

Market participants said weak enforcement has prevented the bond market from maturing. Shahidul Islam, CEO of VIPB Asset Management, said delayed coupon payments and non-repayment of principal are the main reasons the market has failed to gain depth or credibility.

"The regulator approved bonds despite knowing the issuer's weak financial condition. Approving Beximco's Tk3,000 crore bond despite its default history is a regulatory failure," he said, recalling that Beximco's debentures in the 1990s had also defaulted.

Shahidul argued that poor financial disclosure is another major constraint. "Without credible financial reporting, it is impossible to assess an institution's real condition. Regulators must be stricter so reports reflect reality," he said, adding that only financially transparent institutions should be allowed to issue bonds.

Market growth, hidden risks

According to the Bangladesh Securities and Exchange Commission (BSEC), the current commission – reformed after the change of government in August 2024 – has allowed 24 firms, including banks, to raise Tk14,000 crore to meet regulatory capital requirements and for business expansion.

Before that, the previous commission had approved around Tk41,000 crore in bond fundraising. At present, 16 bonds are listed on the stock exchange, with a combined market capitalisation of Tk3,334 crore as of June 2025.

Of the Tk41,000 crore approved, the banking sector accounted for the largest share at Tk27,350 crore, followed by manufacturing with Tk6,600 crore. Financial institutions were approved to raise Tk2,100 crore, while NGOs received approval for Tk2,000 crore, with Green Sukuk bonds alone amounting to Tk3,000 crore.

BSEC data also show that City Sugar Mill, Akij Food and Beverage, CDIP, Sajida Foundation, Mir Akhter Hossain Limited, Runner Auto, Pran Agro and Envoy Textile have raised funds from the capital market through bonds.

Yet despite widespread defaults in coupon and principal repayments, there is currently no comprehensive database of defaulters at the regulator's end.

Ahsan H Mansur, the previous governor of Bangladesh Bank, at a seminar on 28 January said lack of investor confidence remains the biggest obstacle to developing Bangladesh's corporate bond market, and restoring trust requires strict regulatory action against issuers who fail to honour coupon payments.

Without restoring investor trust, any attempt to deepen the bond market would be futile, he said, pointing out that weak enforcement of rules has badly damaged confidence, particularly in cases where issuers have failed to pay bond coupons without facing consequences.

In developed markets, he said, even a single missed coupon payment is treated as a serious default that triggers regulatory action and reputational damage. "But in our country, there is hardly any consequence if a company fails to pay bond coupons. No one seems to care."

Regulator shifts responsibility to trustees

BSEC spokesperson Abul Kalam told TBS that if any bond issuer defaults, meaning it fails to make coupon payments or repay the principal, the trustee must inform the commission.

"The trustee is responsible for overseeing whether coupon payments and principal redemptions are being made properly. If any legal proceedings or liquidation become necessary, the trustee will notify the commission, and the commission will then take necessary actions," he said.

Asked specifically about the Regent Spinning Mills default, Abul Kalam said, "It is the trustee's responsibility to take initiative. If any assistance is required, the commission will take action and provide support in accordance with the law."

He added, "At present, the commission has taken an initiative to create a database of bond defaulters, similar to the CIB database."

Regent Spinning fallout

Regent Spinning floated a Tk200 crore corporate bond in 2015, approved by the BSEC in May that year. ICB was appointed as trustee. Several institutional investors, including ICB itself and RACE, invested.

RACE allocated Tk150 crore, or 75% of the total bond amount. In June 2020, the trustee identified Regent as a defaulter. Investors stopped receiving coupons, and RACE was required to make accounting provisions against the investment.

In a written comment to TBS, Regent said it was a core subsidiary of Habib Group, which once ranked among Bangladesh's most influential conglomerates.

"In the initial years following the bond issuance, the group maintained its financial obligations and paid out coupons to investors regularly. However, the conglomerate eventually suffered a historic financial collapse that extended far beyond a single bond default," the company said.

The fallout was severe, with Regent Airways grounded, factories shut and top directors fleeing the country to avoid legal cases and arrest warrants.

"Today, many of the remaining assets of the Habib Group are subject to court-ordered liquidation processes as part of the effort to settle outstanding debts with various creditors and bondholders," the company said.

Despite being declared in default in June 2020, ICB only filed a recovery suit in August 2024, four years later. By then, the issuer's financial position had deteriorated sharply.

Seeking anonymity, an ICB trustee division official said, "To protect the investors' funds poured into the bond, ICB initiated legal proceedings and filed a suit, which is pending in court."

Sea Pearl convertible bond

In 2017, Sea Pearl raised Tk325 crore through a 20% convertible bond, fully subscribed by ICB. The bond was backed by mortgages on hotel properties and equipment and was issued to repay debts and complete the Sea Pearl Beach Resort & Spa in Cox's Bazar.

It had an eight-year tenure, including a two-year moratorium, and carried a 10% coupon. Green Delta Insurance was the trustee.

After the moratorium, repayments were to begin in April 2020. But citing the pandemic's impact, the company failed to pay and repeatedly sought waivers.

Managing Director Md Aminul Islam did not respond to calls.

Subordinated bonds: Money stuck

In the banking sector, Tk4,010 crore in subordinated bonds issued by four Shariah-based banks – Exim Bank, Social Islami Bank, Union Bank and First Security Islami Bank – remain effectively frozen following mergers and restructuring.

Exim Bank alone accounts for Tk1,890 crore.

Bangladesh Bank spokesperson Arif Hossain Khan said investors would "eventually" receive their principal, though he acknowledged it could take time – offering little clarity on timelines or interim compensation.

All investment-related services in Bangladesh will be brought under a single digital platform called BanglaBiz after 2030, a senior Bida official said yesterday at a memorandum of understanding signing ceremony with five private banks at Bida Bhaban.

Jibon Krishna Saha Roy, director general (investment promotion) of the Bangladesh Investment Development Authority (Bida), said, "We are calling it the Bangladesh Investment Portal. After 2030, there will be no separate portal – only one platform, BanglaBiz."

He said existing one-stop service (OSS) portals will be gradually integrated into the platform.

Bida, in partnership with the Japan International Cooperation Agency (Jica), also unveiled new features of BanglaBiz. The first version was launched on 28 September 2025 as an information portal linking OSS systems of Bida, Beza, Bepza, BHTPA and BSCIC.

Bida executive member Air Commodore Md Shaharul Huda said BanglaBiz is not limited to Bida. "OSS of all investment-related authorities will be connected to this platform. Services already integrated into Bida's OSS will also be transferred soon," he said.

He added that Bida is continuously upgrading the OSS system to ensure faster and more modern services for investors.

The five banks joining the initiative are NCC Bank PLC, One Bank PLC, United Commercial Bank PLC, Shimanto Bank PLC and Al-Arafah Islami Bank PLC.

Under the agreement, investors will be able to open bank accounts online through the OSS portal, including temporary accounts for foreign investors.

Bida said its OSS platform currently offers 142 services and is integrated with 47 agencies. So far, more than 215,000 applications have been processed.

The authority has signed 68 MoUs with service providers and plans to expand OSS coverage to over 150 services across 60 institutions.

It is also working to develop BanglaBiz as a unified digital platform based on a "one-time information" principle for investors.

Economists have attributed the decline to overall political instability and uncertainty surrounding the elections.

Former World Bank Dhaka office lead economist Zahid Hossain said there was no conducive environment for investment at the time.

“There was uncertainty over the direction of political consensus, making it unrealistic to expect foreign funds to flow into the country. Although the interim government took some initiatives to attract investment, those efforts faced obstacles,” he said.

He added that foreign investors were hesitant as they knew the interim government would not be permanent and there was no clear roadmap regarding the elections.

Reinvested earnings also saw a sharp decline during the period. Bangladesh Bank data showed a 35.31 percent drop, with reinvested earnings standing at $217.4 million at the end of the October–December quarter, compared to $325.75 million a year earlier.

Reinvested earnings refer to profits generated by foreign companies from local operations that are reinvested in the country instead of being repatriated. While this indicates some level of investment activity, overall FDI growth depends largely on new equity investments, which remain weak.

Distinguished Fellow of the Centre for Policy Dialogue (CPD) Mustafizur Rahman said foreign firms reduced reinvested earnings considering the overall economic and political environment.

“There was uncertainty over whether elections would take place, which discouraged reinvestment. Although elections were held in February, concerns persisted during that quarter,” he said.

Apart from political factors, economists pointed to several structural challenges hindering FDI inflows, including policy complexities, high business costs, and infrastructural limitations.

Bangladesh also lags behind other South Asian countries in port management, transport, and logistics facilities, as well as cargo and container handling capacity.

Mustafizur Rahman said issues such as the absence of an effective single-window system and high costs of doing business are discouraging foreign investors.

“Even if the political environment improves, investment will not increase unless these structural problems are addressed. The arrival of an elected government alone will not automatically boost FDI, as investors evaluate overall opportunities and conditions,” he added.

A senior Bangladesh Bank official said private sector investment has also declined, indicating that both local and foreign investors are reluctant to undertake new investments.

According to Bangladesh Bank, total foreign investment—including equity, reinvested earnings, and intra-company loans—stood at $363.82 million during the period, down from $494 million in the same quarter of 2024.

The Metropolitan Chamber of Commerce and Industry (MCCI) today urged the government to cut turnover tax on gross receipts to 0.3 percent from 1 percent, saying the existing regime burdens businesses and distorts the tax framework.

The chamber pointed to mismatches between tax deducted at source (TDS), taxes on gross receipts and final corporate tax liabilities, which it said raise compliance costs, strain cash flow and risk double taxation.

“To remove these distortions, tax rates across different stages need to be rationalised and aligned with business realities,” MCCI said.

The proposal was placed at a pre-budget seminar in Dhaka for fiscal year 2026-27, jointly organised by MCCI and the Economic Reporters Forum.

It also proposed setting TDS on export proceeds at 0.50 percent to improve competitiveness amid uncertain global trade conditions, adding that advance deductions erode exporters’ working capital.

At the import stage, MCCI recommended reducing tax collection at source to 3 percent from 5 percent to ease costs for raw materials and capital machinery, supporting industrial production and investment.

For domestic transactions, it suggested a flexible TDS range of 1–3 percent on supply, depending on transaction type and risk profile, and fixing TDS on packing materials at 3 percent for clarity.

The chamber also called for resolving refund complications by issuing “No TDS” certificates until refundable amounts are fully adjusted to ease cash flow and cut delays.

At the event, Kamran T Rahman, president of MCCI, said businesses face mounting pressure from high inflation, elevated interest rates and foreign exchange constraints, with small and medium enterprises hit hardest.

He urged a supportive budget to lower business costs, encourage investment and restore private sector confidence, stressing the need for coordinated policy action to stabilise the economy and sustain growth.

IMF economists warned Thursday that the war in Iran could have “very, certainly severe” consequences far outside the region – especially for energy-importing countries.

Countries in East Asia and Sub-Saharan Africa are among the countries most affected now -- and who could suffer the most -- outside the region, as the conflict stretches on.

Ironically, the ongoing virtual closure of the Strait of Hormuz -- through which about one-fifth of the world's oil and gas passes -- has been a windfall for some petroleum-exporting nations, like Nigeria or Algeria.

But for those that rely on imports for food, fertilizer, and energy, the elevated prices are proving worrisome.

"Oil impacted importers, particularly non-resource-rich and fragile states, face deteriorating trade balances, rising living costs and limited buffers" to absorb future shocks," warned Abebe Selassie, the International Monetary Fund (IMF) Director for Africa, at a press conference Thursday.

"The human consequences are almost certain to be severe," he added.

IMF economists are briefing government officials and media on their latest economic analysis as they hold their spring meetings alongside the World Bank this week in Washington.

HITTING THE MOST VULNERABLE

Sub-Saharan Africa -- which for IMF statistical purposes does not include Sudan and parts of the Horn of Africa -- could see 20 million people pushed towards hunger, an IMF report said.

For Sahel countries, where poverty is widespread, factors that are expected to drive up the cost of food include scarce, expensive fertilizer and rising transportation costs.

"Already transportation costs are very high for people in urban areas, rural areas even more so," Selassie explained. "We are already seeing quite a bit of a pinch from the crisis on people, impoverishing people -- it's making life difficult for people."

The economic effects of the crisis hit at a time when international aid is in steep decline, another source of concern for the IMF.

The aid declines aren't a temporary ebb, but are "more structural," Selassie said. "It is falling hardest on the region's most vulnerable countries -- fragile states and low-income economies -- that depend on aid, not as a supplement but as a critical source of budget financing for healthcare and food assistance."

HEAVY OIL RELIANCE

Further afield, small Pacific islands are of great concern, said the IMF's Asia-Pacific Director Krishna Srinivasan, due to their heavy reliance energy imports and the amount of time it takes ships to reach them -- even when shipping disruptions are minimal.

Zooming out, the entire region -- not just small islands -- faces unique risks because it spends almost double what Europe does on oil and gas, as a percent of GDP.

Some countries, such as Malaysia and Thailand spend around 10 percent of their GDP on oil and gas -- a sign of how reliant they are on energy imports.

DOWNGRADES LIKE 2008

None of this is to downplay the effects in the Middle East, where the IMF's regional director, Jihad Azour, told reporters that their updated estimates of economic activity are "among the largest six-month downgrades to regional growth projections we have made since the global financial crisis."

Markets are now demanding higher interest rates across the board, further driving up the cost of borrowing for countries in the region that were already facing difficulties.

Here again, food is a pressure issue, especially in the region's poorest.

"Food items already account for 45 to 50 percent of total imports in Yemen, Sudan, Somalia and more than half of their population are already experiencing food insecurity," Azour said.

So what's to be done?

IMF officials have repeated the same mantra all week: governments should adopt only temporary, limited measures to avoid further stretching already thin budgets.

Food production, trade and transportation costs may increase further on fuel-price hike by Tk 15-20 per litre in Bangladesh amid an exigent global crunch.
Bangladesh uses about 4.35 million tonnes of diesel annually, and around 24 per cent of it is used in agriculture. About 80 per cent of irrigation depends on this fuel oil. It is also needed for land preparation, harvesting, threshing, and transporting crops.
On Saturday, the government increased diesel price from Tk 100 to Tk 115 per litre, octane Tk 140, up from Tk 120, petrol Tk 135, up from Tk 116, and kerosene Tk 130 in a rise from Tk 112.
Economists, agriculturists and businesspeople are concerned about domino effect of the fuel-price rises across a spectrum of economic activities, price indices and trade and transport.
Agro economists say farmers may have to spend around Tk 18 billion more per year on diesel for farming.
"This will create pressure in two ways. First, higher production costs will make it harder for farmers to get fair prices. Second, food prices on the market may go up, increasing the cost of living, especially for low-income people," says former Bangladesh Agricultural Research Council (BARC) executive chairman Dr Wais Kabir.
He says Boro is now being harvested, so irrigation needs are lower. "However, costs for harvesting, threshing, and transport will increase due to higher fuel prices."
He notes that fuel-price hikes affect all sectors and will increase farmers' costs significantly, which may lead to higher rice prices.
Agricultural economist Prof Dr Rashidul Hasan says farmers are worried about reduced profits. Paddy prices are already low due to imports from India, and farmers are unsure about getting good prices for Boro.
"The fuel-price hike has made the situation worse."
Data show about 55 per cent of the country's rice comes from Boro cropping which depends fully on irrigation.
There are around 1.9 million agricultural machines in the country in the process of mechanization of agriculture, about 75 per cent of which run on diesel.
Prof Hasan feels ensuring diesel supply and providing subsidies are important to support farmers.
Group Director of TK Group Mohammad Mostafa Haider says the impact of fuel-price hikes on product prices cannot be measured immediately.Bangladesh market report
He notes that global oil-and raw-material prices have already increased, along with transport costs.
As such, the businessman says, many product prices have already been adjusted. However, he believes transport fares should not increase again if fuel supply improves, as fares already went up earlier due to shortages.
And, in the meantime, transporters and the government authority concerned were in a meeting on Sunday night with a proposal on the table for bus-fare hike, too.
Recent data from the Trading Corporation of Bangladesh and the Department of Agricultural Marketing show prices of vegetables, edible oils, fish, and poultry on an upturn over the past two weeks.
Traders say truck and pickup-van fares for goods have already increased 15-20 per cent due to fuel shortages in many places.
Meanwhile, the fuel price hike has affected the transport sector as a whole.
The Fare Adjustment Committee under the Bangladesh Road Transport Authority met to discuss new bus fares for city and long routes on Sunday evening. The meeting ended inconclusively. The meeting discussed an increase of Tk 0.22 in fare per kilometre. However, the meeting resumes today.
Although buses charged regular fares on the first day, operators demanded fare increases to make up for higher fuel costs and earlier losses during the fuel crisis.
Some ride-sharing services also charged up to 50-percent higher fares on Sunday, citing fuel shortages and higher costs.
However, the Passenger Welfare Association of Bangladesh opposes fare hikes without fair representation of commuters in the decision-making process. They say fare decisions were previously "influenced by interest groups".
Water-transport operators have also demanded a 36-42-percent increase in launch fares, saying that their operating costs have risen sharply.
Currently, bus fares are Tk 2.12 per km for long-haul run and Tk 2.42 for city routes. Launch fares may also increase if the proposals get through.
Commuters have expressed concern about possible fare hikes, though many say they paid normal fares on the first day after the fuel-price increase.
Transport owners' leaders say fare adjustment is necessary after the fuel-price hike, while commuters argue that fares were not properly reduced when fuel prices fell in 2024.
Leaders of the country's apparel sector Sunday demanded uninterrupted supply of fuels amid the price hike and adjustment of the rate on a regular basis.
Economists term the decision 'good', suggesting regular price adjustment in line with global price indices.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Mahmud Hasan Khan, in an immediate reaction, says, "So far I know, the government has raised the fuel prices in line the understanding with the IMF."
He says the price must be adjusted on a regular monthly basis according to the global price indices, adding that 'adjustment means not only to raise the price but also reduce when global prices fall."
He, however, stresses that factories should get the fuel uninterruptedly as price hike will surely increase the production cost which for many reasons is on the rise.
Citing a rise in global market rates, the government Saturday increased fuel-oil prices at the retail level by Tk 15 to Tk 20 per litre.
Under the new pricing structure, diesel has been fixed at Tk 115 per litre, octane at Tk 140, petrol at Tk 135, and kerosene at Tk 130 per litre.
Talking to The Financial Express, Khan Monirul Alam, Managing Director of Fashion.Com, says his factory located at Ashulia faces five to six hours of load shedding daily.
To run two factories-medium in size--he needs 1200-litre diesel daily to operate generators during the electricity outage.
Due to the 15-percent hike in diesel prices, he will have to bear an additional financial cost of Tk 0.4 million to Tk 0.5 million monthly.
"As the generators are for backup supports and they also have a limited capacity, the machines are overheated, posing risk of possible accident," he says explaining the current situation.
Mr Alam says majority of the factories in the export industry have generators as alternative supports.
Echoing the BGMEA leader, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Mohammad Hatem says there is no denying the fact that production cost will increase. "But the main problem is that we are not getting fuel."
"Last government increased prices of gas several times but we did not get the adequate supply of gas," he laments.
Talking to the FE, Bangladesh Institute of Bank Management (BIBM) director-general Dr Md Ezazul Islam says the latest fuel-price hike will fuel the inflation rate which has been on the higher side.
If the government does not raise the prices of fuel, it has to subsidize, which will put a negative impact on revenue policy, he says about a double bind.
Terming the raise 'good', he says the government also needs to adjust the fuel prices every month with the international market trends-reducing the rate when prices go down globally.
Distinguished fellow of CPD Prof Mustafizur Rahman says the price hike is made at a time when the government has to buy fuels at high rates amid uncertainties.
"It would affect most the direct users like transport, manufacturing and consumers," he says, adding that the government has to monitor the market strictly so that bus fare and other transportation price do not rise disproportionately but reasonably.
He also suggests strengthening the social-safety net to help low-and fixed-income groups who are already under pressure due to higher inflation.
Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood and State Minister Aninda Islam Amit met Prime Minister Tarique Rahman at the Secretariat on Sunday and briefed him on the country's fuel situation.
"They met the Prime Minister at his office at the Secretariat and informed him of the latest fuel situation," said Prime Minister's Additional Press Secretary Atikur Rahman Rumon.
After the meeting, the Energy Minister told waiting journalists that the government had no alternative but to hike the prices as fuel imports require foreign currency, and the adjustment was necessary to keep the situation at a tolerable level.