Oil prices rose more than 3 percent on Monday after Iran and the US traded strikes and Israel ordered troops to move further into Lebanon in its battle with Tehran-backed Hezbollah.

Brent futures rose $2.93 or ​3.2 percent to $94.05 a barrel at 0906 GMT. US crude futures rose $3.36 or 3.9 percent to $90.72 a ​barrel. Over May, Brent and WTI lost around 19 percent and 17 percent, respectively.

The fighting in ⁠the Middle East, after Washington hosted Israel-Lebanon peace talks on Friday, dimmed hopes that the US ​and Iran could soon announce an extension to their ceasefire.

The US said on Sunday it conducted "self-defence strikes" ​while Iran's Islamic Revolutionary Guard Corps said on Monday its aerospace force targeted an air base used for US attacks.

US President Donald Trump said on Friday he would soon decide on a proposed deal to extend a ceasefire announced in early ​April.

Israel would be key to any such deal, and Iran has said repeatedly that Hezbollah must be ​included. The US has proposed a "gradual de-escalation" plan, a US official said on Sunday.

Concerns are rising about mines in the ‌Strait ⁠of Hormuz, a key oil and gas shipping lane, IG analyst Tony Sycamore said in a note. "Even if an agreement is reached, it won't deliver a flood of supply," Sycamore said.

An Axios reporter said on X on Friday that Iran had dropped more mines in the strait earlier in the week.

Iran's ​Foreign Ministry spokesperson Esmaeil ​Baghaei said on Monday ⁠the delay in the diplomatic process to end the war can be explained by a lack of trust, Washington's contradictory positions and Israel's attacks on Lebanon.

Concerns ​over supply outweighed weekend economic data from China which showed stalling factory activity. ​This added to ⁠concerns the world's second-largest economy is losing momentum.

Saudi Arabia is likely to cut its official selling prices (OSPs) for crude oil to Asia in July for a second month, a Reuters survey showed.

Goldman Sachs said on Sunday weak ⁠oil demand ​in China and Europe poses a major downside risk to ​its fourth-quarter Brent crude forecast of $90 a barrel and WTI forecast of $83, although Middle East supply disruptions could still push prices ​higher.

Bangladesh is entering a critical phase in its trade outlook as it prepares for graduation from least developed country (LDC) status, according to a recent assessment by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).The transition is expected to reshape the country’s access to key global markets and expose exporters to higher tariffs unless new trade arrangements are secured.

Bangladesh has formally requested a deferral of its LDC graduation from November 2026 to 2029, reflecting concerns over the loss of preferential access under key schemes, particularly the European Union’s Everything but Arms (EBA) initiative.The EBA framework has long underpinned Bangladesh’s export growth, especially in the ready-made garments sector, by providing duty-free access to European markets.

Under the current regional transition timeline, Bangladesh is still expected to graduate alongside other Asian LDCs in 2026, with most major trading partners likely to offer a three-year transition buffer. This would extend EBA-level benefits until around 2029, softening the immediate impact but not fully replacing long-term preferential access.A central concern highlighted by ESCAP is the erosion of trade preferences, which could affect billions of dollars in export earnings across Asia-Pacific LDCs. For Bangladesh, the impact is expected to be most pronounced in the garments sector, where preferential margins remain a key factor in global competitiveness.The EU is also preparing a revised Generalised Scheme of Preferences (GSP) for 2027-2034, including a strengthened GSP+ framework. Bangladesh may be eligible to apply for GSP+ after graduation, but access will depend on strict compliance with international standards covering labour rights, environmental protection and governance, alongside legal commitments under conventions of the International Labour Organization.

Bangladesh has already ratified several key ILO conventions, though implementation remains under close scrutiny, particularly in areas such as workplace safety, inspections and freedom of association.

Other major markets are also undergoing policy shifts. The United Kingdom’s Developing Countries Trading Scheme (DCTS) and Japan’s Generalised System of Preferences remain important for Bangladesh’s exports, but both are increasingly linking market access to sustainability and governance conditions.

China has introduced a zero-tariff regime for all LDCs, supporting exports from the poorest economies. However, Bangladesh is expected to lose this benefit after graduation, as China does not offer a comparable preferential framework for higher-income developing countries.

At the same time, the United States’ Generalized System of Preferences remains expired, meaning Bangladesh continues to face standard Most Favoured Nation tariffs in the US market, further limiting preferential access options.

ESCAP notes that Bangladesh’s long-term trade strategy will need to shift away from reliance on unilateral preferences towards deeper regional integration and reciprocal trade agreements. Frameworks such as the Asia-Pacific Trade Agreement and broader regional integration efforts are seen as key pathways to sustaining market access after graduation.

Guyana was already the world's fastest-growing economy before the US-Israeli war on Iran drove up oil prices. Now, the tiny Caribbean nation of nearly 1 million people will reap an even bigger bonanza as the conflict reshapes global energy markets.

The war that caused one of the largest energy disruptions in history highlights the growing importance of countries including Guyana that offer political stability and geographically unrestricted access to their estimated 11 billion barrels of oil reserves. This growing windfall from crude brings pressure from business owners and locals on the government to use its billions of dollars to boost other parts of the economy.

"The world has seen too many energy booms that left behind ghost towns, depleted forests and bitter populations. Guyana will not be that story," President Irfaan Ali said in an address at Rice University's Baker Institute this month.

Rapid development by an Exxon Mobil-led oil consortium, which controls all of Guyana's oil production, grew output to more than 900,000 barrels per day in just seven years, a pace without recent precedent as offshore projects can typically take twice as long just to produce the first drop of oil. Guyana's GDP more than quadrupled to $27.5 billion between the time the taps started flowing in 2019 and 2024, according to World Bank data.

Guyana was previously one of the poorest countries in South America and oil-fuelled growth can be seen across the capital of Georgetown, where construction is taking place on new modern office buildings, upscale hotels and rows of single-family homes that resemble those that could be found in US suburbs. Exxon billboards and adverts for other petroleum companies play on the radio, serving as reminders of the industry that helped enable the growth.

More money, more problems?

The government's long-term challenge is to fortify the country against an implicit pitfall – the economic cycle of boom and bust oil prices. Guyana needs to look no further than its neighbour Venezuela for an example of how political dysfunction and overreliance on oil money can cripple an economy despite having one of the largest estimated oil reserves in the world. One of Guyana's strategies is its 2019 sovereign wealth fund holding all oil revenue, which allows the government to draw funds for development projects at a steady rate.

Crude prices, up 30% since the start of the Iran war in late February, could further swell Guyana's oil revenue. Assuming an oil price of $100 per barrel through the rest of the year at current production volumes, Guyana's share of oil revenue could be worth roughly $4.3 billion, 67% higher than last year, according to Reuters calculations.

More importantly, Guyana is poised to start receiving a significantly larger share of oil production earlier than expected. The Exxon consortium currently takes 75% of the oil to recoup its initial exploration and development costs. And now, the consortium could recover the costs this year, Exxon has said. When that happens, the country's share of the profit oil will climb from 12.5% to 50%.

Ali cautioned that expectations needed to be managed, as any windfall due to higher oil prices would be offset by higher import costs for nearly all goods including fuel and fertiliser.

"This is the complexity of the messaging when people wake up every morning and see the headlines that you're flush with money, it drives a certain expectation," he said in his Baker Institute address.

Some local infrastructure has not improved at the same pace that the oil industry has developed. Open sewage drains line the streets of Georgetown and electricity outages remain a common occurrence.

A changed world

Guyana sits at the centre of a region that includes the established oil and gas economies of Venezuela and Trinidad and Tobago, as well as Suriname, where the sector is emerging. The area benefits from direct, unrestricted access to the Atlantic, without maritime chokepoints vulnerable to blockades like the Strait of Hormuz.

Guyana's low break-even prices in the $25 to $35 per barrel range, and proximity to US markets that are supportive of fossil fuel development, further compound long-term advantages, said Tarron Khemraj, a professor of economics and international studies at the New College of Florida, who has studied Caribbean countries including Guyana.

Spot prices for Guyana's four crude grades – valued for their light to medium sweet quality – have surged over the past three months, with the Liza benchmark reaching a high of $120 per barrel from $68.98 on 27 February before the conflict in the Middle East began.

Even if traffic through the Strait of Hormuz resumes soon and oil prices return to pre-war levels, experts say Guyana's track record as a geopolitically stable source of oil will further solidify.

"The war may end next month, but it will be a changed world," Khemraj said.

Still, numbers that look like a boom may belie the full reality of the broader economy.

While Guyana has recorded double-digit percentage GDP growth each year since oil production began, most of that expansion has been concentrated in the petroleum sector, rather than broad-based activity. Oil and gas and support services accounted for more than 75% of the country's GDP last year, according to government data.

Sharing the wealth

As part of its effort to make sure more of the oil revenue trickles down, the government is also moving to expand its local content law, originally passed in 2021, that requires oil and gas firms to contract with Guyanese-owned suppliers and vendors in a number of specific areas, such as janitorial, food or transport.

The regulation requires petroleum companies to procure a certain percentage of services from Guyanese businesses, for example, 25% of medical services and 90% of catering services. The government is considering amendments to add more service areas and increase the percentage requirements for some existing ones, Michael Munroe, director of the local content secretariat, said in an interview.

Business owners say that expanding the requirements will help support more jobs and the development of skilled labour.

"We're able to provide all of the same medical services as an international company," said Ayesha Wilburg, founder and CEO of a Georgetown-based health clinic.

Rising oil activity has also led to a similar explosion in demand for private transport services in Georgetown, where residents often travel by cab.

Nazim Baksh, general manager of Sean's Transportation Services, said the company expanded from seven employees to about 20 and also upgraded its fleet from saloons to add more SUVs.

Challenges remain, however, including complaints from Guyanese business owners about so-called fronting. Panellists at the Guyana Energy Conference in February acknowledged the problem, where foreign companies use local entities but retain actual control of the business.

Vanita Ally, medical director and founder of Phoenix Clinicare, a Guyanese-owned medical centre, said that receiving a certificate to provide services to oil firms has not resulted in much additional revenue and inflation is also increasing her operating costs.

"International companies are benefiting a lot more than local people (from the oil industry)," Ally said.

Drivers are now paying more at the pump, like other countries, adding to cost-of-living concerns. Guyana lacks a refinery and must import petrol, diesel and other refined products.

"For Guyana, as a country that is now a net producer and exporter of energy, (higher oil prices) can mean positive things, but of course, that isn't necessarily what people see and feel every day because it means that energy prices are going up," said Alistair Routledge, president of Exxon's Guyana operations at a press conference in March.

"We recognise this is a mixed blessing for people in Guyana."

From Europe to Japan and Switzerland, huge bond issues by Big Tech companies are proving that smaller markets, often overshadowed by the US, can punch above their weight in the $40 trillion world of corporate debt.

Google-parent Alphabet is already one of the biggest outstanding borrowers in the sterling and Swiss franc corporate bond markets, while Amazon raised 14.5 billion euros ($16.88 billion) in March from an eight-part deal, the largest ever in the euro corporate bond market, according to LSEG.

Debt issues by so-called "hyperscalers" - or Big Tech companies - outside the United States are part of a push to diversify their funding early on, bankers said, as they look to finance trillions of dollars of investment in AI infrastructure, especially data centres, in the years ahead.

Raising debt in foreign currencies can also help the companies hedge the currency risk from their global assets, while taking advantage of relatively lower borrowing costs in places like Europe.

Alphabet smashed records across markets, with its yen, Canadian dollar, Swiss franc and sterling deals all setting borrowing records in those currencies.

"If you look at the pace of investment of these companies and if you fast forward 12 months, some of these companies are already going to become among the biggest issuers globally in any currency," said Giulio Baratta, co-head of investment-grade finance at BNP Paribas.

In Europe, Alphabet and Amazon have helped push up borrowing by non-financial US firms to over 60 billion euros ($69.85 billion) this year, another record.

Record debt sales

Morgan Stanley expects around 50 billion euros of total borrowing from the hyperscalers in euro debt this year, which could help lead the US to overtake France as the euro zone's biggest source of overall corporate debt.

"A lot of these markets, including euro, have evolved and now offer a lot more depth and opportunity for larger capital raising than was historically the case," said John Servidea, global co-head of investment grade finance at JPMorgan, which led recent deals for the two hyperscalers.

With the hyperscaler deals, internationally placed non-financial corporate bond sales tracked by LSEG have surged in markets like the Swiss franc and yen this year.

The ability to raise significant amounts of money in such markets has not gone unnoticed by US companies beyond the hyperscalers, Servidea said.

"They're definitely looking at other markets more seriously than they would have previously."

More broadly, borrowing has also surged in currencies like the Australian and Hong Kong dollars as international companies diversify their funding sources.

Investors, meanwhile, have shifted focus to diversifying away from the US dollar given geopolitical tensions and policy uncertainty.

Building exposure to AI

Hyperscalers have seen their non-dollar issuance double to 30% of their total bond funding this year, according to Bank of America.

Raising money abroad also means Big Tech can leave longer periods between tapping the US market, JPMorgan's Servidea said, while borrowing at rates that are in some cases cheaper than the US dollar market, or at least similar.

Heavy borrowing can weigh on a borrower's bonds, and analysts see signs that hyperscalers are underperforming the US corporate bond market. Visiting it less often may help limit the hit.

Baratta at BNP Paribas, which also led deals for Alphabet and Amazon, said these companies were mainly keeping the funds in the currency they are raising rather than swapping them back to dollars.

As for investors, they're keen to build exposure to the AI theme in international bond markets, where technology names previously had a limited presence.

Nicolas Forest, chief investment officer at Candriam, for example, is buying into the euro deals from hyperscalers to build exposure to the tech sector in the European bond market.

By the end of April, Alphabet had already become the fourth-largest borrower in ICE BofA's sterling corporate bond index after just one round of issuance, and the sixth-largest in Swiss francs.

As tech issuance grows, corporate bond markets outside the US will become more exposed to tech sector developments, in good and bad times.

"If there are any problems with (AI), it will probably create more volatility," said David Zahn, head of European fixed income at Franklin Templeton.

Bangladesh is lagging behind neighbouring countries in buffalo milk production due to low productivity, poor breeding practices, and limited investment in the dairy sector.

Buffalo milk accounts for 65 percent of total milk production in Pakistan, 43 percent in India, 57 percent in Nepal, and only 5 percent in Bangladesh, according to data from the Department of Livestock Services (DLS).

Pakistan produces 60.01 million tonnes of milk, of which 39.80 million tonnes come from buffalo. In India, total milk production stands at 239.03 million tonnes, with 104 million tonnes from buffalo. Nepal produces 2.90 million tonnes, including 1.65 million tonnes from buffalo.

In Bangladesh, total milk production is 16.20 million tonnes, against an annual demand of 16.23 million tonnes, but only 0.08 million tonnes comes from buffalo.

Md Bayezur Rahman, director for administration at the DLS, told The Daily Star that Bangladesh lags behind mainly due to a smaller buffalo population and the lack of targeted development in the sector.

He said that in those countries, buffalo populations have historically been higher due to natural conditions, while in Bangladesh research is underway and a buffalo development project has already been initiated.

DLS data shows buffalo numbers in the country have been rising steadily. In fiscal year 2024–25, the figure stood at 15.32 lakh, up from 15.24 lakh the previous year and 14.16 lakh in FY23.

Gautam Kumar Deb, principal scientific officer and head of a division at the Bangladesh Livestock Research Institute (BLRI), said the low contribution of buffalo milk is rooted in the historical use of buffaloes as draft animals rather than dairy producers.

Unlike in India, Pakistan, and Nepal -- where buffaloes have long been bred for milk -- buffaloes in Bangladesh were primarily used for ploughing fields and pulling carts in low-lying areas, resulting in native breeds with low milk-yielding capacity.

He said the buffalo population declined by around 50 percent after independence as their role in agriculture diminished, though numbers have since stabilised and are gradually rising.

Buffaloes are mainly raised in char and coastal areas, where most farmers rely on natural grazing. In remote char areas, transporting milk to markets is difficult, making calf rearing and meat production a more profitable option for many farmers.

Deb said buffalo farming in Bangladesh remains at a stage comparable to where cattle farming was in the 1980s. The BLRI, DLS, and Bangladesh Milk Producers’ Co-operative Union Limited have been working to introduce high-yielding Indian buffalo breeds, with research populations already established. Improved animals are expected to reach farmers within one to two years.

A buffalo development project launched in July 2020 is nearing completion, with both infrastructure and research components more than 95 percent complete.

Jahangir Alam Khan, former director general of the BLRI and an agricultural economist, said buffaloes have historically received little attention in Bangladesh, where livestock development efforts largely focused on cows. He said continued government support could lead to significant progress over the next 15 to 20 years, and that expanding buffalo farming could help meet domestic demand and reduce reliance on imported buffalo meat.

At an event in Dhaka yesterday marking World Milk Day 2026, State Minister for Fisheries and Livestock Sultan Salauddin Tuku said Bangladesh must increase milk production to reduce import dependence.

He said the government would take measures to expand production capacity with a view to building future export potential in the dairy sector.

Prime Minister's Office (PMO) Spokesperson Mahdi Amin yesterday (1 June) said the government has made a limited adjustment to fuel prices in line with global market trends.

"As we do not produce fuel internally, we are fully dependent on imports. So, any global price increase directly affects us. The adjustment has been made in line with international market conditions, and the increase is limited," he said while speaking at a press conference at the PMO.

The press conference was held at the Karobi Hall of the Prime Minister's Office to brief the media on various public-oriented initiatives and programmes taken on the orders of the prime minister for smooth celebrations of Eid-ul-Adha.

Responding to a question, Mahdi Amin said Bangladesh delayed raising fuel prices longer than many other countries despite growing international pressure.

"Oil prices have increased across the world since the outbreak of the Middle East conflict. Many countries have already raised prices, while Bangladesh is among those that adjusted them relatively late," he said.

The PMO spokesperson said fuel prices in Bangladesh still remain lower compared to many neighbouring countries, helping the government keep inflation under control.

"Overall, as global oil supply and prices are changing, Bangladesh has made a limited price adjustment in line with international trends," he said.

Mahdi Amin said the latest adjustment was made considering global fuel supply conditions and rising international prices.

Replying to another question, Mahdi Amin said the government, under the leadership of Prime Minister Tarique Rahman, has been making every possible effort over the past three months to deliver what a truly accountable government can achieve.

Asked whether remarks made by State Minister for Primary and Mass Education Bobby Hajjaj regarding Dhaka University embarrassed the government following strong reactions from university teachers and students, he highlighted the historic role of Dhaka University and other public universities in the country's major democratic and political movements.

"The contribution of Dhaka University and other public universities is deeply embedded in Bangladesh's history – from the Language Movement and the 1969 Mass Uprising to the Liberation War, the anti-autocracy movement of 1990 and the July mass uprising," the PMO spokesperson said.

He said many individuals currently serving in important state positions emerged from Dhaka University and other public universities on the basis of merit and competence.

Mahdi Amin also noted that the country's private university sector began its journey during the government of former Prime Minister Khaleda Zia in 1992 and has made significant progress over the years.

He said private universities also played an important role during the July movement, standing alongside public universities and people from all walks of life.

"We do not see Dhaka University, North South University or any other university separately. We believe all educational institutions complement one another rather than compete with each other," he said.

The PMO spokesperson said students frequently move between public and private universities for undergraduate and postgraduate studies, reflecting a shared national education system that helps produce skilled, capable and responsible citizens.

"As an elected government, we believe that what matters is not which university someone attended but their honesty, competence and merit," he said.

Mahdi Amin said the government wants to build a discrimination-free Bangladesh where talent and qualifications are properly recognised and where all universities receive policy support from the state.

Responding to a question regarding the buffalo named after US President Donald Trump, now kept at the National Zoo, he said the government's foremost responsibility is to maintain stability, law and order, and social harmony.

The PMO spokesperson said authorities wanted to avoid any situation that could trigger unnecessary controversy or create discomfort at home or abroad.

"A responsible and accountable government always seeks to move the country forward in a positive and festive environment where everyone can participate with goodwill and sincerity," he said.

Mahdi Amin described the handling of the matter as a prudent decision taken through government channels and later implemented as part of a state decision.

The government has officially decided to opt out of the existing loan agreement signed between the International Monetary Fund (IMF) and the erstwhile Awami League administration, moving instead to negotiate a fresh $5 billion credit package under modified terms.

This major policy shift was confirmed during a high-profile virtual meeting held on 21 May, between a Bangladeshi delegation led by Finance and Planning Minister Amir Khosru Mahmud Chowdhury and an IMF team headed by its Deputy Managing Director Nigel Clarke.

According to an official press release issued today (25 May) by the Ministry of Finance, the digital session focused on Bangladesh's macroeconomic stability, the progress of ongoing IMF programmes, and future institutional cooperation.

During the discussions, the finance minister recalled the fruitful talks held during the latest IMF-World Bank Annual Meetings in Washington DC, noting that the government had since reviewed the reform packages internally.

While the minister reiterated that the current administration remains fully committed to macroeconomic stability and structural overhauls, he explicitly noted that the existing IMF programme had been formulated under a completely different economic and policy context.

He explained that subsequent domestic developments, political economy considerations, and global uncertainties have created severe implementation challenges for certain structural reforms.

The minister emphasised that the government does not want to retreat from economic reforms entirely. Instead, the administration aims to execute a realistic, well-sequenced reform agenda that aligns closely with the ground realities of the country, the release added.

In light of these points, the virtual meeting focused heavily on launching a brand-new IMF credit facility under the newly elected government. The alternative framework proposes a realistic three-year timeline incorporating attainable, priority reforms structured around practical sequencing.

IMF's Nigel Clarke welcomed Bangladesh's updated reform initiatives and its proposal for a new facility, expressing hope for a continued close and constructive engagement between the lender and the state.

Both sides reached a consensus on the necessity of a realistic, implementation-focused loan package, agreeing to fast-track the preparatory activities.

Concurrently, high-level ministry sources revealed that the decision to exit the ongoing package stems from a prolonged gridlock over stringent conditionalities.

The global lender has been putting mounting pressure on Dhaka to implement a uniform 15% VAT rate, eliminate tax exemptions, and replace universal state subsidies on electricity and fertiliser with targeted cash transfers.

Furthermore, international development partners have expressed dissatisfaction with the new government's recent amendment to the bank resolution framework under the Bank Resolution Act, 2026, viewing it as a regressive step for transparency.

The finance minister has publicly asserted that as an elected government accountable to the public, the administration cannot comply with donor demands that run counter to public interest or the BNP government's election manifesto.

High-level financial bureaucrats maintain that an active IMF programme remains vital as an essential institutional seal of approval, which is critical to unlocking an estimated $3 billion to $4 billion in parallel annual budget assistance from the World Bank and the Asian Development Bank.

An IMF mission is expected to arrive in Dhaka this July or August to finalise the specific volume, timeline, and terms of the new alternative framework.

The world risks facing a deeper food security crisis in 2026 and 2027 unless governments act quickly to cushion the impact of disruptions in the Strait of Hormuz, the head of the Food and Agriculture Organization (FAO) has warned.

“The decisions we make now will determine whether this remains a manageable shock, or evolves into a deeper global food security crisis in 2026 and 2027, and beyond,” FAO Director-General Qu Dongyu said at a special event on the Middle East crisis during Rome Nutrition Week in Italy from May 25 to May 28.

Describing the situation as “a systemic shock to the global agrifood system”, he said the biggest impacts may emerge months from now as farmers cut back on planting and fertiliser use because of rising production costs and supply chain constraints.

According to the FAO, severe disruptions in the Strait of Hormuz have already affected the movement of oil, liquefied natural gas, sulfur and fertilisers, driving up agricultural input costs and putting upward pressure on seed prices because of their dependence on fertilisers. As energy prices rise, agrifood systems become more expensive across all regions.

Input import-dependent countries, in particular, are facing rising bills, while vulnerable households are losing purchasing power as inflation erodes incomes, the UN agency said.

For many countries, especially in Africa and parts of Asia, these impacts are not occurring in isolation. They are compounding existing pressures from debt distress, climate shocks, conflict and constrained public finances.

Bangladesh meets most of its fertiliser requirements through imports, and Gulf nations such as Saudi Arabia and the United Arab Emirates are major suppliers.

In the fiscal year 2023-24, the country’s demand for urea was 27 lakh tonnes, of which more than 17 lakh tonnes had to be imported, according to Bangladesh Chemical Industries Corporation data.

As global prices of fuel and fertiliser -- especially urea -- have risen, Bangladesh is already feeling the strain.

The FAO chief said the actions taken now will be critical in determining whether the world can manage the shock caused by the situation in the Strait of Hormuz or face a far more serious food security crisis in the years to come.

“We must act early before humanitarian and economic costs rise,” the director-general said.

The warning comes days after the FAO cautioned that the closure of the strategic waterway could trigger a severe global food price crisis within six to 12 months if preventive measures are not taken.

FAO Chief Economist Maximo Torero earlier said the situation should not be seen as a temporary shipping problem but as the beginning of a broader agrifood shock that could spread through global food systems via higher energy costs, fertiliser shortages, lower crop yields and food inflation.

The impact is already visible. The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of globally traded food commodities, rose for a third consecutive month in April, driven by high energy costs and turmoil linked to the conflict in the Middle East.

To reduce the risks, the FAO urged countries to avoid export restrictions on fertilisers and agricultural inputs, support farmers through focused assistance and ensure timely financing for food production.

The UN agency also called for greater diversification of trade routes, stronger regional integration, strategic reserves and more resilient agrifood systems to reduce dependence on critical trade chokepoints.

The FAO has warned that the situation could become even more challenging if a strong El Niño event materialises, disrupting rainfall patterns and agricultural production in several regions.

“We have a window to act, but that window is narrowing,” Qu said.

The FAO said traditional emergency packages centred exclusively on fertiliser-intensive systems may no longer be viable under current conditions.

“Countries should support adaptive strategies such as intercropping, improving nitrogen efficiency and promoting crops that are less dependent on synthetic fertilisers.”

It suggested prioritised support, saying resources should be directed towards the most vulnerable populations through well-designed social protection systems and rural support mechanisms.

The National Board of Revenue is considering raising the specific tax – a form of value-added tax (VAT) – on mild steel (MS) products and related items by around 10% at the production stage, according to sources at the Ministry of Finance.

The proposed change may be included in the Finance Bill accompanying the upcoming national budget. A similar increase in the specific tax on these products was introduced in the previous budget as well.

Industry stakeholders have warned that any further tax hike could dampen demand at a time when the steel sector is already struggling with weak market conditions. They said economic slowdown has reduced infrastructure and construction activities across government, private and individual projects, leading to a sharp fall in demand for steel rods.

Infograph: TBS
Infograph: TBS

According to sources at the NBR, the specific tax on MS products manufactured from re-rollable scrap currently stands at Tk1,700 per tonne, which may be increased by Tk170.

The specific tax on billets and ingots produced from meltable scrap may rise by Tk150 from the current Tk1,500 per tonne. For MS products manufactured from billets or ingots, the tax may increase by Tk160 per tonne. In the case of ingots or billets produced from meltable scrap and MS products manufactured from those ingots or billets, the increase may be Tk220 per tonne.

A senior NBR official, speaking to The Business Standard on condition of anonymity, said the specific tax at the local production stage for MS rods should be higher than the current rate.

"After reviewing the matter, we are preparing a proposal for a reasonable increase in VAT," the official said.

However, Md Shahidullah, managing director of Metrocem Group, believes the current economic climate is not suitable for raising VAT.

Explaining his concerns, he said demand for steel and related construction materials had fallen sharply as infrastructure development activities slowed across the country. "In some cases, we are now forced to sell products below production cost just to stay in business."

"If additional VAT is imposed on these products in such a situation, demand may decline further, which will increase pressure on us," he said.

Industry insiders said steel rod prices were selling between Tk80,000 and Tk85,000 per tonne until March this year, but prices have risen since the outbreak of the conflict in the Middle East.

Shahidullah said rod prices currently range between Tk85,000 and Tk92,000 per tonne.

NBR officials, however, argued that an increase of Tk150 to Tk200 per tonne due to higher VAT would not significantly affect prices.

According to the Bangladesh Steel Manufacturers Association (BSMA), there are around 200 steel mills operating in the country, including approximately 40 large industrial enterprises. The sector's total installed production capacity is about 120 lakh tonnes annually.

Under normal market conditions, annual demand for various steel products – including MS rods, sheets, beams, angles and plates – exceeds 60 lakh tonnes. MS rods, or rebars, account for the largest share of the market and are widely used in the construction sector.

Industry stakeholders said demand for steel rods has fallen by nearly one-third due to a slowdown in real estate and private construction activities, high interest rates and broader economic uncertainty.

In 2015, Bangladesh and Vietnam shared the same S&P sovereign credit rating: BB–. A decade on, Vietnam stands at BB+, one notch from investment grade. Bangladesh has fallen to B+, its banking sector near the bottom of global risk rankings, and Fitch issued a negative outlook just days ago. This is not a sudden crisis. It is the accumulated cost of a decade of governance failures that Bangladesh's policymakers refused to confront while headline growth numbers held up.

Rating record

The table below tracks S&P's sovereign rating trajectory for all five countries over the past decade.

The divergence is unambiguous. Vietnam earned two upgrades from the same starting point; Bangladesh suffered one downgrade. Uzbekistan, unrated until 2019, has already surpassed Bangladesh. Kyrgyzstan – smaller, poorer and landlocked – debuted at B+ in March 2025, level with Bangladesh today despite having no prior rating. Cambodia, which Bangladesh should outrank on every structural metric, sits on exactly the same shelf. Bangladesh and Vietnam were rated identically in 2015. Today they are four notches apart – and the gap is widening.

How a decade was squandered

Three structural failures drove the decline. Forex reserves collapsed from $48 billion in August 2021 to below $20 billion in 2024, compounded by the revelation that headline figures had been inflated for years through inclusion of illiquid instruments. The banking sector failure was deeper: S&P places Bangladesh in Group 9 out of 10 on its Banking Industry Country Risk Assessment.

When Fitch downgraded Bangladesh in May 2024, NPLs stood at 9%; by December 2025 they had reached 30.6% as regulatory forbearance unwound. This is not a banking sector with a problem – it is a banking sector whose problem has finally been measured. A fiscal system generating tax revenue of just 7-8% of GDP provided no cushion, and the interest-revenue ratio hit 29% by end-2025, more than double the B-rated peer median. The student-led uprising of mid-2024, the fall of the Hasina government, and political uncertainty over elections compounded every structural vulnerability.

What peers did differently

Vietnam held to one strategy: export-led industrialisation with consistent macroeconomic management. The China-plus-one manufacturing shift found Vietnam ready; S&P upgraded it twice in six years. Bangladesh had the same garment base and labour cost advantage – and let the window close. Uzbekistan debuted at BB– in 2019 and has since climbed to BB: it brought Franklin Templeton in to manage Uzbekistan National Investment Fund, listed the fund on the London Stock Exchange in May 2026, raised $604 million with four times oversubscription, and made state enterprise governance internationally legible. Kyrgyzstan – smaller and poorer than Bangladesh, unrated until 2025 – raised $700 million in a debut Eurobond with three times oversubscription months after receiving its first rating. Both countries demonstrated institutional credibility and immediately accessed international capital markets. Bangladesh cannot.

Fitch warning of May 2026

On May 13, 2026, Fitch revised Bangladesh's outlook from stable to negative, affirming B+. The proximate trigger is the Middle East conflict – nearly half of Bangladesh's remittances originate there, and crude oil accounts for 15% of imports. But the conflict is the match, not the fuel: limited reform progress is eroding Bangladesh's capacity to absorb shocks.

Revenue fell when the IMF programme required it to rise. Constitutional reform is stagnant. Reserves at $29.5 billion sit below the B-rated median. A negative outlook shifts the burden of proof – Bangladesh must now demonstrate improvement, not merely avoid further deterioration. The three most likely triggers for an unscheduled downgrade to B are a fracture in the IMF programme, reserves falling below three months of import cover, or a major bank failure. At B – Pakistan's cohort – most institutional mandates prohibit exposure to Bangladesh sovereign instruments.

Three scenarios

The base case without decisive action is a downgrade to B within 12 to 18 months. The second scenario – the negative outlook resolved without a downgrade – requires the conflict to de-escalate, reserves to hold above four months of cover, the IMF programme to stay on track, and NPLs to show credible improvement. Every condition must hold simultaneously. The upgrade path toward BB– is a 2028 to 2030 horizon at the earliest, requiring sustained reserve improvement, measurable NPL reduction, and tax revenue approaching 10% of GDP.

What a rating downgrade actually means

Rating downgrades are not abstract. Their consequences are concrete, immediate, and compound across every layer of the economy. Six transmission channels matter most for Bangladesh.

Borrowing costs rise system-wide. Treasury bill yields reached 12% by late 2024 – up from under 7% two years earlier – as investors demanded a higher premium to hold government paper. Higher yields feed the fiscal deficit, which feeds more borrowing, which feeds higher yields still: a self-reinforcing spiral that a further downgrade accelerates.

Trade finance becomes costlier and harder to access. Bangladesh's garment export economy runs on letters of credit. LC confirmation charges levied by foreign correspondent banks are directly linked to the sovereign rating. Exporters operating on 3 to 5% margins absorb those charges or lose orders to competitors whose banks carry no such premium. A move to B would make this materially worse.

FDI dries up. FDI fell 8.8% in FY2024; Standard Chartered Bank Bangladesh's CEO attributed the decline explicitly to rating downgrades reducing risk-adjusted returns. A B rating places Bangladesh alongside Pakistan – no multinational building a medium-term Asia investment case allocates to a B-rated country when BB-rated alternatives exist.

Portfolio capital exits in advance. Many institutional mandates prohibit exposure below BB–. Bangladesh crossed that threshold in 2024. Portfolio investment was already a $111 million net outflow in FY2024. The Fitch negative outlook will have triggered repositioning across mandated investors before any formal rating action occurs.

The sovereign-bank nexus tightens. Public sector credit growth surged to 24% by October 2025 against private sector growth of just 6%. As the sovereign's rating falls, state-owned banks' access to foreign credit lines weakens and their funding costs rise. A sovereign downgrade cascades through the entire banking system the government owns.

LDC graduation compounds the risk. Bangladesh is supposed to graduate from Least Developed Country status in November 2026, losing preferential tariff access that partly underpins its EU garment market. That graduation was designed for a Bangladesh growing at 6 to 7%. Fitch forecasts 3.7% for FY2026. The combination of LDC graduation and rating deterioration creates a double vulnerability with no coherent plan to manage both simultaneously.

A downgrade is not just a signal – it is a tax on every borrower in Bangladesh, from the government to the garment exporter to the bank issuing a Letter of Credit, eventually every individual in Bangladesh.

Conclusion

Bangladesh's rating decline is not irreversible – but it is accelerating. The economic fundamentals remain: a large remittance base, a competitive garment sector, a young labour force. What has been absent is the institutional commitment to make those fundamentals credible to external investors. The rating agencies are explicit about what recovery requires: reserves above the B-rated median, NPLs measurably reduced, tax revenue approaching 10 percent of GDP, and reform continuity through a post-election government. What is absent is not knowledge of what to do. The Fitch negative outlook of May 2026 is a final warning that the window is closing – and that the next action, if nothing changes, will not be an affirmation.

Ershad Hossain, director, Putnam Capital Advisory Pte Ltd, Singapore

This commentary is prepared for informational purposes only and does not constitute investment advice. Putnam Capital Advisory Pte Ltd is a Singapore-incorporated advisory firm active in Bangladesh's capital markets.

Bangladesh generates a significant share of the world’s raw leather each year, yet earns only a fraction of what the material is worth due to compliance failures and decades of neglected infrastructure, according to industry leaders.

They point to shortcomings at the Savar Tannery Industrial Estate that have kept the country locked into low-value exports and shut out of premium global markets.

Bangladesh accounts for around four percent of the world’s rawhide and skin resources and produces an estimated 350-400 million square feet of hides and skins annually, according to Md Mizanur Rahman, professor and director of the Institute of Leather Engineering and Technology at the University of Dhaka.

“The country could generate up to $10-$12 billion in export earnings from its existing raw materials alone if the sector were fully utilised,” he said.

“We are sitting on a huge resource, but we are not using it properly,” Rahman added.

He estimates that nearly 30 percent of the country’s leather is wasted due to poor preservation, inadequate processing capacity and the lack of proper utilisation of tannery by-products.

According to the professor, the leather sector offers one of the highest value-addition opportunities in Bangladesh’s manufacturing industry, with up to 90 percent value addition possible as most raw materials are sourced locally.

He noted that foreign buyers, particularly Chinese firms, often purchase Bangladeshi leather for as little as 40-50 cents per square foot and later sell processed leather in international markets for around $2 per square foot.

Much of the profit from Bangladesh’s leather ends up overseas, while local traders and producers receive low prices for rawhides, he added.

According to Rahman, much of the potential lies in by-products that currently go unused.

He noted that tannery waste can be processed into collagen, gelatin, fertiliser and animal feed – industries that, if formalised, would create new demand for hides and push up their market value. “Nothing from leather should go to waste. Every part has economic value.”

The timing of supply adds another layer of difficulty. Some 40-45 percent of the country’s annual rawhide comes to market within three days of Eid-ul-Azha, placing enormous strain on processing capacity and making efficient handling critical to securing better prices.

The DU professor said the lack of internationally compliant environmental infrastructure at the Savar Tannery Industrial Estate has further limited the sector’s ability to move up the value chain.

Md Tipu Sultan, chairman of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLFEA), said the country’s leather sector continues to receive lower prices in international markets mainly because many factories have yet to meet globally recognised compliance standards.

“If we can move quickly on these issues, it will make a significant difference,” he said.

The compliance gap is the central obstacle for the sector’s growth, he noted, stating that only a handful of factories currently hold the internationally recognised certifications required by buyers in the United States and European markets.

“One or two compliant factories are not enough. If at least 50 out of around 150 factories can achieve those standards, more compliance-focused buyers will source products from Bangladesh,” Sultan said.

“If we can move quickly on these issues, it will make a significant difference,” he added.

If progress continues, he said, many of the recurring problems facing the leather sector could be resolved before the next Eid-ul-Azha season.

At the factory level, the frustration runs deeper. Md Salauddin Ahmed, managing director of New Kajol Tannery Ltd and treasurer of the BFLLFEA, traces the industry’s current predicament to the forced relocation of tanneries from Hazaribagh to Savar – a move the government promised would come with full infrastructure support.

“The government shifted us to Savar with the promise of providing all necessary facilities. But many factories moved before essential infrastructure was ready,” he said.

Even years after the relocation, several tanneries still face shortages of gas and other utilities, while the central effluent treatment plant (CETP) has yet to operate at the expected standard, he added.

These shortcomings have prevented the sector from obtaining internationally recognised certifications, including approval from the Leather Working Group (LWG), a key requirement for supplying many global brands.

“As a result, major European buyers are not coming to Bangladesh. We are largely dependent on Chinese buyers, who currently dictate prices,” Ahmed said.

That dependence shows in the margins. Processed leather is selling at $0.50–0.55 per square foot, barely enough to cover costs. With most chemicals imported and the dollar strengthening, even cheap raw hides offer little relief.

“We import most of our chemicals, and costs have risen sharply due to the stronger dollar. Even when we purchase raw hides at relatively low prices, we struggle to make a profit,” he said.

According to Ahmed, the lack of buyer diversification has weakened the industry’s bargaining power and contributed to the decline in hide prices.

“If we can ensure proper environmental compliance and secure LWG certification, European and other international buyers will return. Then we can sell leather at much better prices and pay higher prices for raw hides as well,” he said.

As people return to the capital after the Eid holidays, the Dhaka-Mawa-Bhanga Expressway is greeting travellers not with its usual green surroundings and fresh earthy air, but with an unmistakable stench: rotting rawhides.

After sacrificing cattle on Eid day, many people have dumped hides along the highway this year as prices continued their long decline.

Images of discarded hides, hides buried in the ground, and rawhides thrown into rivers first made national headlines in 2017, when tanneries began relocating from Dhaka’s Hazaribagh area to the Savar Tannery Estate. Nearly a decade later, the same scenes continue to recur with little sign of improvement.

The relocation from Hazaribagh, on the banks of the Buriganga river, came after years of delays by tannery owners and repeated government deadlines. International buyers had increasingly raised concerns about the industry’s environmental record. At Savar, tanners were supposed to receive a fully functional central effluent treatment plant (CETP), but the facility remains underperforming almost a decade after the move.

The Eid-ul-Azha season provides around 50-60 percent of the rawhide local tanneries need for production throughout the year. Proceeds from the sale of sacrificial animal hides traditionally go to charities, madrasas and orphanages.

For years, the government has fixed prices at which small traders are meant to buy hides from the public. Yet those rates have done little to change the overall picture.

Apart from official prices largely remaining on paper and the CETP incomplete, at least half a dozen other factors help explain why rawhides continue to rot each year.

They include a surge of rawhide supply arriving within a few days of Eid-ul-Azha, weak demand, a tannery sector struggling with environmental compliance, softer global demand for leather, cash shortages across the supply chain, poor preservation practices that reduce quality, and allegations of price manipulation by a small group of tannery owners.

Md Shaheen Ahamed, chairman of the Bangladesh Tanners Association, said the leather sector has been in decline since the relocation of tanneries to Savar.

There are now more than 115 operational tanneries in Savar estate, but only five hold Leather Working Group (LWG) certification.

The LWG is a global body that sets environmental and compliance standards for the leather sector. Certification is required for access to markets in Europe, the United States and parts of developed Asia.

Most local tanneries do not have this certification, due mainly to compliance issues and the underperforming CETP.

Ahmed said the industry cannot grow while it fails to meet international environmental and quality standards.

With most tanneries lacking certification, rawhide demand remains weak this year as usual, according to small and medium traders.

Md Anwar Hossain, a rawhide trader in the Posta area of Dhaka, said demand from tanneries is currently low.

He said the prices traders can offer are dictated by what tanneries are willing to pay.

“That is just how the chain works. An official price does not change that,” Hossain said, adding that markets do not move simply because the government puts out a number.

Tipu Sultan, general secretary of the Bangladesh Hide and Skin Merchants’ Association, said rawhide collection this year is around 20 percent below expectations, and trading has not followed the government’s price announcement.

In his view, the core problem is cash.

He said businesses do not have sufficient working capital to buy at the government fixed rates during the peak collection period.

Mohammed Abu Eusuf, professor of development studies at Dhaka University, said Bangladesh’s leather sector is trapped in a cycle of low prices, weak demand and missed export potential.

He said the country stays in the loop because the compliance and governance problems have not been addressed.

Government price-setting has not been effectively enforced, he said, leaving seasonal traders to absorb losses. Unless the sector generates stronger demand and meets international environmental standards, conditions are unlikely to change.

He noted that tanneries with LWG certification are picking up solid export orders. However, much of the industry is excluded from such opportunities because the Savar Tannery Estate remains non-compliant, leaving most leather produced there tied to lower-priced markets, including China.

Md Mizanur Rahman, professor and director of the Institute of Leather Engineering and Technology at Dhaka University, traced the pressure on rawhide prices back to 2012, when international buyers began enforcing stricter environmental and compliance requirements.

Before that, Bangladeshi tanneries exported wet blue leather with fewer restrictions. As buyers in Europe and North America tightened standards, access to those markets increasingly depended on certification and environmental performance.

Rahman said the government moved tanneries from Hazaribagh to Savar to address environmental concerns, but the CETP has not delivered the level of compliance required by global buyers. As a result, many tanneries have shifted towards lower-priced markets, limiting what they can pay for rawhides.

The main driver of falling rawhide prices is weak tannery demand, not a cartel, Rahman said. “If there were strong demand, prices would naturally rise.”

Md Abdur Rahim Khan, additional secretary and head of the Export Wing at the Ministry of Commerce, said price issues in the rawhide market are mainly linked to quality, handling and coordination across the supply chain rather than administrative factors.

He said that during Eid-ul-Azha, large-scale slaughtering by unskilled butchers often leads to torn or damaged hides, reducing their value even when salt is applied.

He added that salt-treated hides generally receive government-fixed prices, but unsalted or poorly handled hides do not fetch expected rates.

Commerce Minister Khandakar Abdul Muktadir said the decline in rawhide prices in recent years is mainly due to structural problems within the industry.

He said the relocation of tanneries from Hazaribagh was the right decision, but the process was poorly managed, leaving many tanneries unable to restart operations properly.

He pointed out that the CETP at Savar, designed for a capacity of 25,000 cubic metres, is currently operating at only 14,000 to 17,000 cubic metres, around 60 percent of capacity.

According to the commerce minister, this shortfall, combined with limited processing and compliance infrastructure, has weakened overall efficiency in the sector.

Muktadir said compliance has become essential for accessing better international prices, measured through the LWG certification.

“Without this certification, factories are considered non-compliant and are excluded from reputable international buyers, including those purchasing finished leather goods and crust leather.”

He added that compared with the Hazaribagh period, there are now fewer processors and manufacturers. As a result, the sector cannot absorb the large volume of hides generated during Eid-ul-Azha, creating a supply and demand imbalance and pushing prices down.

He explained that while CETP capacity constraints prevent immediate full-scale processing, there is no major issue if leather is processed gradually over six to eight months.

The minister said an Italian company is studying the CETP to identify technical solutions for its underperformance. A report is expected in June or early July, after which corrective steps will be taken to restore full 25,000 cubic metre capacity.

Besides, individual effluent treatment plants will become mandatory for large tanneries, with government support through technical assistance and loans, said Muktadir.

Sri Lanka raised fuel prices by up to six percent on Sunday, in line with IMF plans to recover energy costs and phase out subsidies to stabilise the economy.

Petrol was raised to 434 rupees ($1.33), up from 410, while diesel increased to 407 rupees a litre from 392, the state-run Ceylon Petroleum Corporation said.

The price hike came days after the International Monetary Fund released a $695 million instalment of a $2.9 billion bailout loan, agreed in early 2023 to stabilise the cash-strapped South Asian nation.

The IMF wants Sri Lanka to ensure cost recovery for both fuel and electricity tariffs, which have been subsidised by the government since the start of the conflict in the Middle East in February.

President Anura Kumara Dissanayake, in a letter to the IMF made public by the Washington-based international lender, said fuel subsidies will be phased out by September.

Since the United States and Israel began attacking Iran on February 28, triggering a global energy crisis, Sri Lanka has raised petrol and diesel prices by about 48 percent. Electricity has increased by a third.

The Strait of Hormuz, a key waterway through which about 20 percent of global oil exports pass in peacetime, has been effectively closed by Iran.

Sri Lanka imports all its oil and also buys coal for electricity generation.

Colombo has warned that the fighting in the Middle East, and any prolonged conflict, could seriously undermine its efforts to emerge from the economic meltdown of 2022.

Sri Lanka defaulted on its $46 billion foreign debt in 2022 after running out of foreign exchange. Since then, Colombo has been drawing down the IMF bailout loan to stabilise the country.

Trading and official activities on the country’s two stock exchanges—the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE)—will resume tomorrow (Monday) after a week-long Eid-ul-Azha holiday.

The bourses remained closed from May 25 to May 31, including weekly holidays, on the occasion of Eid-ul-Azha, one of the largest religious festivals for Muslims.

Trading hours will return to the regular schedule, beginning at 10:00 am and continuing until 2:30 pm, including a 10-minute post-closing session, according to DSE officials.

Before the Eid break, the market ended slightly higher on May 24 as bargain hunters picked up undervalued blue-chip stocks, although overall investor sentiment remained cautious.

The benchmark DSEX index gained 7.5 points, or 0.14 per cent, to close at 5,336.

The DSE30 Index, comprising blue-chip stocks, edged up 0.54 points to 2,030, while the DSE Shariah Index (DSES) advanced 5 points to 1,082.

The Chittagong Stock Exchange also closed in positive territory on the final trading day before the holiday. The CSE All Share Price Index (CASPI) rose 71 points to 14,909, while the Selective Categories Index (CSCX) gained 38 points to finish at 9,169.

Bangladesh Finance made a significant turnaround by securing a profit of Tk 225 million in 2025 from one of the highest losses - Tk 7.83 billion - in the country's non-bank financial institution (NBFI) sector a year earlier.

The achievement was mainly driven by strong recoveries from stressed loans, said Md. Kyser Hamid, managing director and CEO of the company.

The company recovered around Tk 1.77 billion in 2025 from stressed loans, he said, adding that loan rescheduling and lower provisions also contributed to the latest financial performance.

A year ago, Bangladesh Finance set aside money to maintain full provisions against defaulted loans and even stressed loans.

"Usually, provision is kept only for non-performing loans, but we allocated additional interest suspense and provisions against stressed loans in the past two years."

If any client fails to pay loan instalments for more than three consecutive months, their account gets suspended and the pending interest is not shown as income.

Bangladesh Finance kept provisions against investments of Tk 1.66 billion in 2023 and Tk 8.36 billion in 2024.

The CEO said the management had set aside more than what was necessary as interest suspense and kept higher provisions than required in 2023 and 2024, considering that the company might have to bear further financial shocks in the future.

These measures were taken to mitigate unforeseen credit risks, address potential losses early, prevent further deterioration and defaults, ensure adequate reserves, and safeguard overall financial health, he said.

With such precautionary measures already in place, aggressive efforts in 2025 to recover and reschedule defaulted loans enabled the company to reverse a substantial amount of provisions previously maintained.

Echoing Mr Hamid, Md. Sajjadur Rahman Bhuiyan, group chief financial officer, explained that after facing heavy provisioning in FY24, the company strategically focused on recovery in FY25.

"By deploying management to accelerate settlements and rescheduling major corporate loans, we successfully released substantial provisions, ultimately driving the company back to profitability."

Bangladesh Finance booked a provision write-back of Tk 2.13 billion, a dramatic reversal from the Tk 7.85 billion provision recorded in 2024, according to its auditor's opinion published on Sunday.Regional business directory

"The write-back significantly boosted the company's bottom line and marked a major improvement in asset quality management," said the auditor.

Mr Hamid said continued recovery initiatives, disciplined risk management and supportive regulatory policies were expected to further improve the company's financial health and support sustainable long-term growth.

However, the auditor warned that Bangladesh Finance still faces serious financial vulnerabilities.

It pointed out that the company continued to operate with negative consolidated equity of Tk 5.47 billion as of December 2025.

The auditor noted that the financial statements had nevertheless been prepared on a going concern basis after the management provided justification that the company would be able to continue operations in the foreseeable future.

Bangladesh Finance said its management conducted a detailed assessment in line with Bangladesh Bank guidelines and International Accounting Standard (IAS) 1 to evaluate whether the company could continue as a going concern.

The assessment considered financial performance, liquidity conditions, asset quality and capital structure.

According to the company, its board believes the institution has adequate resources and recovery plans in place to continue operations despite the negative capital position.Wealth management advice

The company also highlighted a sharp improvement in its provision coverage ratio, which rose to 496.96 per cent at the end of 2025, indicating a strong cushion against potential future credit losses.

Capital adequacy indicators also improved during the year, although they remained below regulatory requirements.

The standalone capital adequacy ratio improved to negative 31.84 per cent from negative 33.81 per cent a year earlier, while the consolidated capital adequacy ratio stood at negative 24.29 per cent.

Meanwhile, net asset value per share also showed signs of recovery. Consolidated NAV per share improved to negative Tk 28.85 in 2025 from negative Tk 30.05 in the previous year.

To restore financial stability, the company has prepared a long-term capital management plan along with a seven-year financial projection and a liquidity management strategy aimed at rebuilding capital strength and improving liquidity conditions, said the auditor.

The management acknowledged that confidence in the financial sector remains weak but said ongoing restructuring initiatives and expected regulatory support would help stabilise the company further.

The auditor also confirmed that subsidiaries - Bangladesh Finance Securities and Bangladesh Finance Capital - received unmodified audit opinions for 2025.

Recovery continues in Q1, 2026

Bangladesh Finance sustained its recovery momentum in the first quarter of 2026, posting a 120 per cent year-on-year increase in consolidated profit to Tk 20.71 million.

The company said the performance in the January-March period resulted from capital gains from investments in securities and further reversal of provisions maintained against loans, leases and investments.

It has sustained its recovery at a time when the sector overall has been under pressure from rising non-performing loans, liquidity stress and weakening depositor confidence over the past several years.

Predictable policies, improving liquidity flows and rebuilding investor confidence dominates the upcoming national budget as Bangladesh navigates a challenging economic landscape marked by inflation, sluggish investment and financial-sector vulnerabilities.

Talking to The Financial Express, days before the new government's maiden budget lands in parliament, Dr Rashed Al Titumir also explains that the government's economic strategy is built around a five-year framework of "recovery, restoration and reconstruction for acceleration".

"The budget size remains relatively small compared to the size of our economy and the financing needs in health and education," he says, stressing the need to increase public spending to reduce high out-of-pocket healthcare expenditures and build a skilled workforce through the promotion of technical education.

Asked about amendments to the Bank Resolution Act and efforts to address the banking-sector crisis, Dr Titumir says the government has adopted a diversified approach and is seeking strategic international partners to strengthen financial institutions.

"Bangladesh must better integrate with international banking standards and explore opportunities in the global Islamic finance market to benefit depositors, trade financiers and the broader economy."Digital news subscription

The government is also focusing on improving liquidity flows within the financial system.

"We must ensure the flow of liquidity. This requires proper incentives to increase the velocity of money. Banks holding excess liquidity should play a greater role in supporting productive investment," he says.

While acknowledging the current stagflationary pressures, the professor of development economics emphasizes that the government is pursuing economic correction rather than financial repression.

"We do not want financial repression. Our objective is to correct distortions and ensure that investors have access to funds without facing excessive financing costs."

Dr Titumir stresses coordination between fiscal and monetary policies while maintaining the operational independence of the central bank, free from political intervention.

On relations with the IMF, he says Bangladesh would continue discussions with the Fund to ensure that future policy commitments reflect the country's economic realities.

Describing the previous Hasina administration as "debtholic," he argues that the government had accepted several IMF conditions under the bailout programme that may not fully align with Bangladesh's current economic context.Bangladesh investment guides

"We will continue negotiations based on our own policy priorities and development needs."

Emphasizing the urgency of restoring international confidence as a prime objective, he notes that Bangladesh's debt-risk rating by the IMF from low to medium was a "hemorrhage" for the country's ability to access concessional financing.

"Lower international ratings affect investment, financing costs and market access. Consistent policies, macroeconomic stability and stronger institutions are essential for rebuilding credibility."

The government is also seeking to position Bangladesh as a regional logistics and connectivity hub by attracting internationally reputed port and logistics operators.

"We want to build Bangladesh into a logistics hub and create a benchmark that attracts internationally reputed operators through an inclusive and competitive process."

He says the government has already initiated investment discussions with stakeholders from Singapore, Saudi Arabia, the UAE, Denmark and Japan, particularly regarding opportunities around the Chattogram Economic Corridor.

Projects may be implemented through public-private partnerships, although other investment models are also being explored to ensure trade and economic benefits for Bangladesh.Development strategy reports

Dr Titumir highlights the importance of multimodal transport systems and stronger regional connectivity with Nepal, Bhutan, China, Myanmar and ASEAN economies.

Regarding state-owned enterprises, he says public resources should be concentrated on essential public services such as education, healthcare and social protection.

The government is considering leasing closed factories under BJMC and BTMC through a transparent and competitive process, he adds.

The adviser strikes a note of optimism about restoring confidence in Bangladesh's capital market, noting that BNP-led governments had not experienced major stock- market scams.

"Investors have repeatedly suffered from market manipulation and weak enforcement. Restoring trust requires stronger governance and regulatory oversight," he says.

On evolving trade issues with the United States, Dr Titumir says Bangladesh remains committed to respecting international agreements while continuing consultations to protect its national interests.

"The US situation is evolving too as tariff issues go to Supreme Court."Currency exchange tools

There are issues that require consultation and dialogue.

Despite current challenges, Dr Titumir remains cautiously optimistic about Bangladesh's prospects.

"We are pursuing a strategy of recovery, restoration and reconstruction. With policy consistency, institutional reforms and renewed confidence, Bangladesh can unlock its growth potential and strengthen its position in the regional economy," he says.

Bangladesh's import policy in the making appears at odds with emerging trade requirements in the European Union and the United States as it proposes allowing apparel exporters to qualify for incentives with a minimum 30-percent local value addition.

Industry leaders say the EU's proposed Generalised Scheme of Preferences Plus (GSP+) framework will require "double transformation" for garment exports, which they estimate would translate into around 40-percent local value addition.Local trade insights

Similarly, exporters say recent US trade rules require at least 40-percent local value addition, failing which shipments could be treated as transshipments.

To qualify for the EU's proposed GSP+ framework, Bangladeshi garment exporters will need to comply with the double-transformation requirement, which industry leaders estimate would require around 40-percent local value addition - a level already achieved by many knitwear manufacturers, though.

However, woven-garment manufacturers, which typically have lower domestic value addition, may find it more difficult to retain duty-free access to the EU market following Bangladesh's graduation from least-developed-country (LDC) status in November 2026, according to trade economists and industry insiders.

The government, however, has also sought a deferral of the country's graduation process to leave the world's poor-country club.

"We proposed lowering the threshold to 20 per cent," says BKMEA President Mohammad Hatem, in reference to the draft Import Policy Order 2026-2029.

He argues that high-value products, particularly those made from man-made fibres (MMF), would struggle to meet the proposed 30-percent threshold, as raw material costs for such products are significantly higher than those of cotton-based items.Capital market software

"If the government does not revise the provision, it will discourage local industrialisation and efforts to increase domestic value addition in export-oriented apparel production," he predicts.

Hatem also raises concern over a proposed restriction on knit fabrics import in the draft policy. Referring to Commerce Ministry Additional Secretary Abdur Rahim Khan, he says the ministry had indicated that the issue would be addressed in the final version of the policy.

A recent Ministry of Commerce document states that following Bangladesh's graduation from the LDC status, exports to key destinations such as the EU, the United Kingdom, the United States, Japan and other markets will no longer enjoy duty-free access.

To maintain export competitiveness and safeguard market share, the ministry, in collaboration with stakeholders, has already initiated negotiations on free-trade agreements (FTAs), comprehensive economic partnership agreements (CEPAs), bilateral and multilateral trade agreements, and other preferential trade arrangements with major trading partners.

According to the document, maintaining duty-free market access after graduation will require major export-oriented sectors to raise local value addition to above 40-50 per cent. In some cases, compliance with product-specific rules (PSRs), including double-transformation requirements, will be necessary.

The policy on the anvil further notes eligibility for GSP+ preferences may require a minimum value addition of 40 per cent. Exports to countries such as Australia and Canada, which currently enjoy duty-free access, are already required to meet a value-addition threshold of at least 50 per cent.

"In nearly all recent trade negotiations, the requirement for double transformation as a condition for granting duty-free access to Bangladeshi exports has been strongly emphasised," the document reads.Economic trend data

It also highlights that Bangladesh has offered commitments in ongoing negotiations under which garments produced using yarn and fabrics originating from importing countries would be eligible for preferential tariff treatment in proportion to the share of such inputs used in production.

"Accordingly, if Bangladesh's garment industry, particularly knitwear manufacturers, becomes increasingly dependent on imported yarn, securing duty-free market access in the future may become significantly more challenging," the document forewarns.

Seeking anonymity, an apparel-sector leader says the government may consider cash support only for new product categories with 20-percent value addition, which could help diversify export offerings.

"The new items could include sportswear, wedding wear and tech wear, which may require imported fabrics and accessories. Once we start producing such products, the local industry will gradually develop around them," the exporter says.

BKMEA Executive President Fazlee Shamim Ehsan mentions that a recent US court decision put the implementation of the reciprocal-tariff policy on hold, meaning it is currently not applicable to Bangladesh or other countries.Local trade insights

According to the draft Import Policy Order, RMG exporters will be required to maintain a 30-percent value-addition threshold for children's garments, up from the current 15 per cent.

Knitwear and woven garment exports will also be required to attain 30-percent value addition, compared to the existing requirement of 20 per cent.

Exporters of underwear and other specialised garments made from synthetic fibres may face a minimum 40-percent value-addition requirement. Footwear exports, including both leather and non-leather products, may be subject to 30-percent threshold, while ship exports could face 40 per cent, and wooden furniture exporters 50 per cent.

Under the proposed policy, exporters who fail to meet the prescribed value-addition requirements will not be eligible for cash incentives or duty benefits on imported raw materials.

The Ministry of Commerce held a stakeholder consultation on the draft policy on May 22, bringing together industry representatives ahead of its finalisation.

An incremental assistance package announced by the Asian Development Bank (ADB) would fetch Bangladesh US$5.0 billion over next five years and increase the subsequent annual aid by 20 per cent.

The announcement came Monday when ADB President Masato Kanda met Prime Minister Tarique Rahman in Dhaka discussing Bangladesh's development priorities.

Such a bounteous financing commitment comes while the release of remaining sums from an as-much IMF lending package for the country stalls under conditions the new government feels unpalatable in the current context. City & Local Guides

The Integrated Growth Network Development Initiative presented by Mr. Kanda during his visit is designed to expand investment, create jobs, improve connectivity, and promote more balanced regional growth.

"The five-year package is expected to amount to about $1.0 billion a year and will be strategically integrated into ADB's enhanced annual sovereign commitment envelope for Bangladesh," the ADB Dhaka office says in a statement.

And the Manila-based development financier plans to increase its annual sovereign commitments for Bangladesh by 20 per cent from about $2.0 billion to about $2.4 billion annually over the medium term.

The higher annual envelope is hoped to support Bangladesh's development priorities, including investment-led growth, job creation, economic diversification, stronger governance, and a smooth transition from least-developed country (LDC) status.

The ADB president says: "Bangladesh is entering a critical new phase. ADB will help the country protect hard-won stability, unlock new sources of growth, and build a more diversified and resilient economy that delivers better jobs and wider opportunity."Wealth management advice

Marking Masato Kanda's visit, the ADB signed about $1.4 billion in loans as part of the 2026 annual-commitment programme.

The Asian Bank support is scaled up by $250 million to help in financing gaps linked to the economic impact of the Middle East conflict, which is adding pressure to Bangladesh's economy by way of driving up the cost of fuels, liquefied natural gas, fertilisers, and shipping.

These strains come as inflation remains high and the banking sector remains under stress.

The ADB will work with the government and development partners to track the situation and bring in additional financing and private investment, and help Bangladesh build a more resilient economy through more diverse energy sources and exports, and stronger institutions.

Also will it provide $2.0 million in technical assistance to support the preparation and implementation of Bangladesh's medium-term development framework and align ADB's forthcoming country-partnership strategy with government priorities.

Mr. Kanda also met Finance and Planning Minister Amir Khosru Mahmud Chowdhury, with discussions focused on Bangladesh's reform agenda, macroeconomic pressures, external- financing needs, and ADB's support for government's growth and resilience priorities.Local trade insights

The ADB chief met with key private-sector leaders discussing the opportunities and constraints shaping investment.

Also, the Bank is working with the government to mobilise additional private capital by deepening capital markets, preparing bankable projects, and attracting cofinancing and private investment.

The ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific.

Working with its members and partners to solve complex challenges together, the Asian Bank harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard the planet.

India has scrapped customs duties on cotton imports for five months, the government said on Saturday, as it seeks to boost supplies of contamination-free natural fibre for textile exporters amid strong overseas demand for yarn.

The easing of import restrictions by the world’s second-largest cotton producer is likely to lend support to global prices but is unlikely to trigger a surge in purchases as the rupee’s depreciation has made imported cotton slightly more expensive than domestic supplies.The current 11 percent import duty will be suspended until October 30, the government said in a statement.

India’s textile sector, like others, is under pressure from rising input costs as supply chains are disrupted by the Iran war.The measure is expected to support domestic producers, particularly small and medium-sized firms, by improving cotton availability, the government said.

However, industry officials said Indian cotton is currently the cheapest in the world and that ample supplies from this year’s crop are available domestically, which is likely to limit imports.

“At current price levels, imports are not economically attractive,” Vinay Kotak, president of the Cotton Association of India, told Reuters.“Export-oriented mills need contamination-free cotton and, to meet that requirement, around 600,000 bales could be imported during the duty-free import window.”

The cotton is likely to be sourced from Australia, Brazil, the United States and Africa, which have surpluses, industry officials said.India last year allowed duty-free cotton imports from mid-August through the end of December, helping drive imports to a record 4.7 million bales in the current marketing year, which began last October 1.Cotton is largely grown in rain-fed areas in India, and any disruption to monsoon rains from an El Nino weather pattern could reduce output from the new crop being planted from June and boost import demand, said a New-Delhi-based dealer with a global trade house. “In that scenario, the government could extend the duty-free import window beyond October, as it did last year,” he said.

Canada’s economy posted a surprise contraction in the first quarter versus the year before, making it two straight ‌quarters of annualised decline - which some economists call a technical recession - as the country struggles with US tariff uncertainty.

Gross domestic product declined at an annualised rate of 0.1 percent in the first quarter, Statistics Canada said on Friday, compared with a downwardly revised contraction of 1 percent in the fourth quarter of last year.

Analysts ​polled by Reuters and the Bank of Canada had predicted first-quarter growth of a robust 1.5 percent. On a quarterly basis, ​first-quarter GDP was unchanged against a decline in the fourth quarter of last year.

Canada’s economy has largely withstood trade uncertainty and tariff impacts for more than a year, but the knock-on effects of tariffs have sapped investments, hiring and ​expenditure, and driven up prices.

The upcoming review of the North American free trade deal and the crude price ​shock due to the Middle East war have added more layers of uncertainty.

The last two times Canada was in a technical recession were during the start of the pandemic in 2020 and during the oil shock in the beginning of 2015.

At that time there were two consecutive quarters of decline, both on ​an annualized basis and quarterly basis, StatsCan said. Economists were divided on whether Canada is in a recession or not.

“The trade-induced contraction in ​GDP last quarter meant the economy tipped into a technical recession at the start of the year,” said a note from Capital Economics, though rising ‌oil and gas activity mean the economy likely rebounded in April.

Randall Bartlett, deputy chief economist with Desjardins Group, said the group is not prepared to call the data a recession as the weakness in the Canadian economy was not widespread.

BANK OF CANADA SEES GROWTH OF 1.2% THIS YEAR

The BoC has said growth this year is likely to be at 1.2 percent, down from 1.7 percent last year. It will update its projections in ​July.

The first-quarter GDP was negatively ​impacted by a high level ⁠of imports into the country, but that was largely offset by a high accumulation of inventories, the statistics agency said.

Household spending grew, especially in financial services and food, but this was again mostly canceled ​out by a decline in business and government investments.

Business capital investment fell 0.7 percent, its fifth consecutive ​quarterly decline, StatsCan said.

On ⁠a monthly basis, GDP in March declined by 0.1 percent, against an estimate of flat growth.

An advance estimate from StatsCan showed that growth in April was likely to be 0.4 percent, highlighting a strong start to the second quarter.

Money markets are pricing in a rate hike of 25 basis ⁠points in ​December, even as most economists have called for no change in interest rates all ​through the year.

The Canadian dollar weakened after the GDP data and was trading down 0.28 percent to C$1.3819 to the US dollar, or 72.36 US cents. Yields on the ​two-year government bonds slipped further and were down 7.7 basis points at 2.430 percent.