The Bangladesh Bank (BB) has extended the deadline for distressed borrowers to apply for policy support by six months, to June 30, 2026.

The previous deadline was the end of December last year.

A BB circular issued yesterday said banks may provide special restructuring facilities for unclassified loans until the new deadline. Loans classified as substandard, doubtful, and bad/loss as of March 31, 2026, will also be eligible for special rescheduling benefits.

However, borrowers who have already received policy support under the earlier circular or through the restructuring selection committee will not be eligible for reconsideration.

The central bank issued the fresh instructions to reinforce the implementation of earlier policy support guidelines.

BB also instructed banks to dispose of applications within three months of receipt. Applications will become effective only after the encashment of down payments made in favour of banks.

The directive came into immediate effect under Section 49(1)(d) of the Bank Company Act, 1991.

In January last year, the central bank formed a five-member committee to provide necessary policy support for restructuring corporate borrowers that had defaulted on loans due to factors beyond their control.In September last year, the BB also issued a unified special loan rescheduling policy to maintain economic growth and support borrowers who had defaulted due to circumstances beyond their control.

Under the policy support, distressed businesses will be able to get up to 15 years for repayment, with down payments as low as 1 percent to 2 percent and grace periods of up to three years.

A Tk 3.0-trillion Annual Development Programme (ADP) for the next fiscal year is getting final consideration today with several-fold increases in education and health allocations with the focus on human-capital development, officials say.

However, the highest development-budget sanction goes for the fund-guzzling Local Government Division and the Road Transport and Highways Division.

The proposed ADP, which is 50 per cent higher than the revised Annual Development Programme (RADP) of Tk 2.0 trillion for the outgoing fiscal year, is set to be placed at today's extended meeting of the Planning Commission.

Planning Minister Amir Khasru Mahmud Chowdhury is scheduled preside over the meet. Sources say Zonayed Abdur Rahim Saki, State Minister for Planning, S M Shakil Akhter and other senior officials of the ministry will attend the meeting.

Subject to approval at the meeting, the final ADP proposal will be placed before the National Economic Council (NEC) at a meeting scheduled for next week, the sources add.Economic Forecast Service

They say Tk 1.9 trillion, equivalent to 63.33 per cent of the total outlay, is set to be financed from the government exchequer while the remaining Tk 1.1 trillion is expected to be managed from external sources, mainly in the form of project loans and grants.

For the current fiscal year, the government had initially approved an ADP of Tk 2.3 trillion, which was later revised down to Tk 2.0 trillion, comprising Tk 1.28 trillion from domestic resources and Tk 0.72 trillion from external financing.

The proposed allocation for the next fiscal year represents an increase of 48.44 per cent in domestic financing and 52.78 per cent in external financing.

In the proposed ADP for the next fiscal year, the Local Government Division (LGD) is set to receive the highest allocation of Tk 366.20 billion, followed by the Road Transport and Highways Division (RTHD) with Tk 329.03 billion.

Health Services Division is likely to see a significant leap in allocation to Tk 206.08 billion, more than six folds compared to its revised allocation of Tk 31.28 billion in the current fiscal, elevating its position to third from the 15th.

Among other sectors, Primary and Mass Education is set to receive Tk 213.48 billion, 2.65-fold higher than the revised allocation of the current fiscal year at Tk 80.54 billion.

The Secondary and Higher Education Division is likely to get Tk 208.35 billion, 3.37-fold higher than the current revised allocation of Tk 61.90 billion.

Power Division is expected to receive the fourth-highest allocation at Tk 192.85 billion, followed by the Ministry of Science and Technology with Tk 173.66 billion.

In a significant move toward long-term economic resilience, the government is set to boost human-capital development by increasing budgetary allocations for education and health in the upcoming budget for the FY2026-27, officials say.

According to preliminary estimates from the Ministry of Finance (MoF), the government plans to raise education spending to 2.0 per cent of GDP or gross domestic product and health-sector allocation to 1.0 per cent of GDP.

Officials say this shift signals a departure from Bangladesh's historical trend of social-sector neglect as the country prepares for its post-LDC-graduation challenges.Bangladesh Economic Report

For decades, health and education have remained underfunded, with education spending stubbornly staying below 2.0-percent mark and health receiving less than 1.0 per cent of the GDP.

In the current FY2025-26 national budget, the allocation for education is Tk 956.44 billion, which accounts for 1.53 per cent of the GDP, while for health Tk 419.08 billion, or 0.67 per cent of the GDP.

Experts have long argued that these figures fall far short of the UNESCO recommendation of 4.0-6.0 per cent for education and the 5.0-percent target often cited for a functional healthcare system.

A senior MoF official says, "We have decided to enhance the budgetary allocation in the educational and health sectors for building a better human capital to weather the impact of the LDC graduation as well as build the country."

He adds: "We have to boost our economy into a trillion-dollar one, and that's why the human-resources development is a top priority of the government."

The government is going to allocate extended funds in the development budget for the health and education sectors so that the country could reap benefit from the quality development of its human capital, the ministry official says.

Dr Rashel Mahmud Al Titumir, Advisor to the Prime Minister, at a discussion meeting Thursday said their government would increase the budgetary allocation to 5.0 per cent of GDP in the field of health and education.

Another MoF official told the FE that the proposed hike is part of a broader "investment-driven model" intended to build a technology-driven, employment-oriented workforce.Corporate Finance Workshops

The targeted allocation at 2.0 per cent of GDP will be to improve primary education quality and expand vocational training along with the tertiary and higher education in Bangladesh.

"Finance secretary has recently instructed the health and education ministries and other implementing agencies who are involved with human-capital development to spend money for quality development," the MoF official adds.

Fund-allocation target of 1.0 per cent of GDP in the upcoming national budget would mainly be utilized to strengthen preventive healthcare and reduce out-of-pocket expenses, which currently account for over 70 per cent of total health costs.

The overall national budget for FY2026-27 is expected to be Tk 9.30 trillion.

The finance official says while infrastructure remains a priority, the focus is shifting toward "people over physical structures" to ensure sustainable 6.2-percent GDP growth in the medium term.

While the planned increases are a welcome step, economists from the Centre for Policy Dialogue (CPD) caution that the narrow tax-to-GDP ratio-currently around 6.8 per cent-remains a major barrier to realizing these ambitions.

"Increasing the allocation is only half the battle," says a senior researcher at the CPD. "The real challenge lies in improving the implementation capacity of the ministries, which often struggle to fully utilize even their current modest budgets."

The government is expected to officially table the budget proposal in the Jatiya Sangsad early next month, where further details on sectoral reforms and funding sources will be rolled out.

The country's return on foreign exchange reserve investments reached a six-year high in fiscal year 2025 supported by mainly rising global yields, according to a report released by the central bank.

The Bangladesh Bank says income from reserve investments stood at US$639.53 million during the fiscal year while the country's gross foreign -exchange reserves amounted to $31.8 billion as of June 30, 2025.

The Forex Market and Reserve Management Report for FY 2025, released last week, has projected that reserves would continue to rise in the coming months on the back of a favourable balance-of-payments outlook supported by strong remittance inflows, improved exchange-rate alignment and contained import demand.

According to the central bank, the country's foreign-exchange reserves could reach $36.84 billion by the end of next June.

The report also says a gradual recovery in exports, inflows of multilateral financing and the rollover of trade credits would further strengthen the country's external liquidity position.

The BB notes that prudent management of foreign -exchange reserves remains crucial due to frequent volatility on the international financial market.Personal Finance Consulting

"Despite global uncertainty, strategic portfolio management and timely intervention helped stabilise the local currency, taka, and enabled the country to meet all external obligations smoothly," the regulator claims.

The report mentions the reserves as a vital buffer against external shocks, although management systems in Bangladesh during the period.

The central bank is now focusing on strengthening reserve management further with "improved technology, enhanced risk-management frameworks and adaptive long-term strategies".

According to the report, the central bank mainly invests reserve assets in highly rated fixed-income instruments in the global arena.

The reserve portfolio is dominated by the US dollar, accounting for 82 per cent, followed by the Euro.

The report says safety remains foremost priority in reserve-investment decisions.

The reserves are invested in secure and high-quality assets, including US Treasury securities, sovereign bonds and deposits with top-rated international banks.Stock Market Data

The report also says that around 12 per cent of reserves are maintained in cash or near-cash instruments to ensure immediate liquidity support when required.

Investment in fixed-income securities continues to remain a key component of reserve management due to their stability and liquidity advantages.

"These (fixed-income instruments) are selected because they are very safe, liquid and carry strong credit ratings," the report explains the modus operandi of the sovereign investment.

The central bank also invests part of the reserves in gold to protect asset value during periods of inflation, currency depreciation and global uncertainty.

It suggests that gold holdings should account for around 5.0 per cent of total foreign -exchange reserves.

In addition, Bangladesh maintains a part with Special Drawing Rights (SDRs), the International Monetary Fund's reserve asset, arguing that it is part of its reserve-diversification strategy.

"For Bangladesh, SDR serves as a strategic tool to diversify its foreign-exchange reserves," the report mentions.Bangladesh Economic Report

The central bank in its report emphasises that foreign -exchange reserves play a pivotal role in maintaining macroeconomic stability and strengthening resilience in the external sector.

The reserves provide the financial capacity to meet essential external obligations, including import payments, external debt servicing and other current-account requirements.

The central bank says its key objective is to secure reasonable returns on reserve investments without taking excessive risks.

It also manages market risks through diversification of reserve assets in line with international reserve-management guidelines.

The central bank also manages several special funds, including the Export Development Fund (EDF), Green Transformation Fund (GTF) and Long-Term Financing Facility (LTFF) -- which play role in economic development in the country.

In South Asia, Bangladesh's reserves have grown steadily over the years, peaking at around $46 billion in 2021.

India continues to maintain the region's largest reserves, while Nepal and Bhutan recorded stable growth.

In contrast, Pakistan and Sri Lanka experienced significant volatility, often relying on external financing and IMF support.

The Bangladesh Securities and Exchange Commission (BSEC) has issued a directive setting out how existing closed-end mutual funds can be converted into open-end ones.

The move follows years of debate over the future of closed-end funds. In 2018, amid heavy criticism from market analysts, the BSEC allowed several funds to extend their tenure without seeking approval from unitholders.

Closed-end mutual funds raise a fixed pool of money from investors, usually for 10 years, and invest it in shares, bonds and other assets. Their units are listed and traded on the stock exchange.

Open-end funds, by contrast, are not listed. Investors buy units directly from the fund manager at the prevailing net asset value and can redeem them at any time at a price based on that value.

After the Awami League was ousted from power in August 2024, a taskforce appointed by the interim government recommended that all closed-end funds should be redeemed at maturity and that no extensions should be permitted.

Subsequently, the BSEC amended the mutual fund rules to bar any extension of tenure for existing closed-end schemes.

Under the revised regulations, fund managers must call a special general meeting within 30 days if the six-month average market price of a fund’s units remains at least 25 percent below the six-month average net asset value.

If at least 75 percent of unitholders vote in favour, the fund will be converted into an open-end mutual fund. The amended regulations complete six months in force this week.

An analysis of Dhaka Stock Exchange data shows that most closed-end funds are already trading at a discount of more than 25 percent to their six-month average net asset value. This means many could now face a vote on conversion.

Abul Kalam, spokesperson for the BSEC, also said that under the rules, funds may face conversion or winding up.

If the decision comes in the meeting to convert them into open-ended funds, it will ensure the interest of investors as they will be able to get back their funds at NAV any time, he said.

In winding up, Kalam said there is a tax issue, and investors will get only the fund that the fund manager gets by selling their holdings.

In an order issued on May 7, the regulator outlined the conversion process.

According to the order, an asset manager may also initiate a proposal for voluntary conversion. However, the board of trustees must approve the plan after ensuring that unitholders’ interests are protected.

Trustees must take a decision on any voluntary conversion proposal at least 150 days before the fund’s maturity.

They are also required to publish notices as price-sensitive information in at least two national newspapers, one in Bangla and one in English, as well as on an online news portal and on the websites of the stock exchanges, trustees and asset managers.

The notice must include the record date, the date from which trading will be suspended, the effective date of conversion and the date of the special general meeting.

Only unitholders whose names appear in the depository or unitholders’ register on the record date will be eligible to vote in the meeting.

Under the order, trading in the units of the relevant fund will remain suspended from the record date to preserve the integrity of the voting and conversion process.

The BSEC also stipulated that any conversion proposal must be approved by at least three-quarters of unitholders, calculated on the basis of units held.

If the proposal fails, trading the fund’s units will resume on the next trading day. The trustee will hand over all assets to the custodian, while management will remain with the existing asset manager.

The order further said that if conversion is approved, the newly selected asset manager will bear the costs of holding meetings and the trustee fees related to the process. If the proposal is rejected, the existing asset manager will pay those expenses.

The commission has capped trustee fees for a single conversion scheme at Tk 10 lakh.

Sonali Bank, which had been suffering from a massive capital deficit for years, recorded its highest net profit of Tk1,313 crore in 2025, more than 33% higher than the previous year.

The country's largest state-owned lender posted this staggering profit in a year when its core banking businesses, including interest income and loan disbursement, fell significantly.

The magic behind the artificial profit was massive loan rescheduling under a relaxed policy offered by the central bank in September 2025. It helped Sonali Bank to cut default loans by 22.32% in just three months.

The sharp decline in default loans reduced provision maintenance costs significantly, helping the lender post the record profit despite negative business growth.

The bank's net interest income saw a sharp decline, falling 77% to Tk337 crore during the year. The drop was attributed to reduced interest earnings from borrowers and higher interest payments to depositors, according to its audited financial statement.

The bank, which had a capital deficit of nearly Tk6,000 crore in 2024, is no longer in deficit. Instead, it posted a capital surplus of Tk1,325 crore in 2025.

Bankers and economists said that although the financial indicators show a massive improvement in performance, the so-called gains carry serious risks as banks deferred interest payments for two years by locking bad loans under a long-term rescheduling policy spanning 10 years, including a two-year grace period.

They added that the grace period gives borrowers temporary relief from paying principal and interest, easing the immediate burden of defaults on banks. However, it significantly impacts the sector by delaying the recognition of bad loans and disrupting cash inflows.

Bangladesh Bank data show that default loans in the country's banking sector declined by Tk87,298 crore during the final three months of 2025, primarily driven by a massive debt rescheduling campaign under relaxed central bank policies.

This massive reduction of default loans through rescheduling is not sustainable for the banking sector, observes Zahid Hussain, former lead economist at the World Bank's Dhaka office.

In many cases, he said, such facilities had been granted on political considerations or ahead of elections to keep businesspeople off the defaulters' list.

The World Bank, in its latest Bangladesh Development Update 2025, said: "BA recent relaxation of loan rescheduling and restructuring rules, along with continued regulatory forbearance, risk delaying full recognition of banks' asset quality problems and slowing balance-sheet repair."

Sonali's 200% unaudited profit

Sonali Bank, in its unaudited financial report released in January this year, reported a 200% year-on-year jump in net profit to Tk2,650 crore in 2025. However, the audited financial statement published this month showed net profit falling to Tk1,313 crore, following higher provisioning requirements imposed by the central bank against the lender's large stock of bad assets, according to central bank sources.

A deputy managing director of Sonali Bank told The Business Standard, requesting anonymity, said, "One of the main reasons that the figure was revised was because some exposures had to be reclassified as fresh non-performing loans under instructions from the Bangladesh Bank."

He added that the bank's profits increased largely because of the large-scale rescheduling of default loans, which reduced provisioning requirements. At the same time, interest income from regularised loans could be booked in income statements.

Other banks take opportunity

Bangladesh Bank data shows state-owned banks and troubled private commercial banks mostly availed the entire benefits of relaxed loan rescheduling policy by cutting down default loans significantly in just three months from October to December.

For instance, Agrani Bank under the relaxed policy rescheduled loans of Tk8,368 crore, more than six times higher than the previous year, according to its statement. The massive rescheduling helped the bank cut default loans by 15.59%, or Tk5,285 crore, in the last three months of 2025.

Among troubled private commercial banks, AB Bank rescheduled more than Tk1,300 crore, helping it reduce defaults by nearly Tk12,000 crore. The bank's default loan ratio declined to 50.88% at the end of December from 84% in September, according to central bank data.

Islami Bank Bangladesh, the country's largest private commercial bank, reduced default loans by more than Tk14,000 crore in just three months through rescheduling, while National Bank Limited cut default loans by nearly Tk10,000 crore during the same period.

'Banking sector stress pushed into future'

Arfan Ali, former managing director of Bank Asia, said banking sector stress has effectively been pushed into the future through repeated deferment and rescheduling over the past decade.

"In many cases, loans are shown as regular by recovering only a nominal amount. Even disciplined borrowers are increasingly incentivised to delay repayment and seek similar concessions," he said.

He warned that the sector must move away from this long-standing practice. "We are seeing that many of those becoming newly classified as defaulters are old borrowers who had long remained non-performing in substance but were kept outside default classification through repeated facilities. Once such support is withdrawn, they quickly fall back into default, weakening asset quality further."

Rescheduling sends misleading signals to depositors'

Explaining the future consequences, a managing director of a private commercial bank, who wished not to be named, said such a loan rescheduling facility sends misleading signals to depositors, as they would see cleaner balance sheets and lower default loans and be encouraged to place more funds.

"However, after two years, when these loans turn default again, it will erode capital and depositors will lose money, similar to what happened in some merged banks," he added.

He said several private commercial banks are already in a severe but undisclosed financial crisis, and rescheduling allows them to present artificial balance sheets.

Moreover, when banks engage in foreign business, institutions such as IFC, ADB, Standard Chartered and other international lenders analyse balance sheets by treating rescheduled loans as distressed assets. As a result, they either restrict credit lines or charge higher rates, raising costs for exporters and importers, which are ultimately passed on to consumers, said the banker.

"When a customer becomes a defaulter, our job is to find the root cause and take corrective measures to make that company viable," he said.

When the Bangladesh Bank introduced the policy, all defaulting companies approached for 10-year rescheduling with a two-year grace period, he said. "Most of these firms are facing severe cash flow crises, with factories shut and significant financial gaps."

He argued that such extensions are unlikely to revive them, as the policy merely postponed payments for two years, reducing reported default loans in the industry.

"Strong banks didn't fully adopt the policy as it doesn't restore viability, while loss-making banks saw it as an advantage. It helped them reduce provisioning, show profits and declare dividends," he said.

He added that these banks are fully aware that many borrowers are likely to default again within months. "That is why they offered a two-year grace period with no repayment or interest. Loans originally structured for six months have now been extended to 10 years, along with additional working capital."

As a result, default loans decline on paper without actual recovery, provisioning requirements fall and profits increase. He warned that while balance sheets may appear clean for the next two years, they could suffer a sharp deterioration in the third year.

He also said that although cash flow is reduced, the benefit from lower provisioning is far greater than the annual income loss. "For instance, a Tk100 crore loan that turns bad requires full provisioning of Tk100 crore. Rescheduling eliminates that requirement, while annual interest income of Tk12 crore, assuming a 12% rate, is moved to a suspended account. In effect, banks trade recognised income for immediate provisioning relief, which violates accounting standards."

How loan rescheduling will squeeze lending capacity

A managing director of another private commercial bank said the two-year grace period will squeeze lending capacity as banks will not get repayment during the period. Moreover, banks cannot take interest incurred against rescheduled loans in their income statement which will impact profit in next two years.

He said that when banks receive neither repayments nor interest from rescheduled loans, while continuing to service depositors, cash flows come under pressure, constraining lending capacity.

He added that financial statements have been "engineered" over the past 15 years by underreporting defaults. "Now, with defaults suddenly rising to around 30%, banks are facing a sharp increase in provisioning requirements."

Previously, banks maintained provisions against 5% to 10% of classified loans, but this has now increased five- to six-fold, creating a severe provisioning gap.

He said that had proper governance been enforced over the past decade, banks would have built adequate buffers. "Instead, many distributed profits as dividends without making sufficient provisions."

In this situation, he said, banks are being forced to rely on the relaxed policy for survival. "However, the central bank should've allowed partial interest payments rather than a full grace period."

He warned that while balance sheets may appear cleaner, most banks will have limited capacity for fresh lending in the coming years, which could significantly affect private sector credit growth.

Plummeting credit growth

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

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

The data also show total default loans stood at Tk5.57 lakh crore at the end of December 2025, accounting for 30.60% of total outstanding loans, down from Tk6.44 lakh crore, or 35.73%, at the end of September.

Two reasons why rescheduling is unsustainable

According to Zahid Hussain, there are two main reasons why the practice is unsustainable.

Firstly, loan rescheduling directly hurts banks' balance sheets and erodes capital. He compared it to "continuous bleeding" in the human body, which gradually weakens a financial institution over time.

Second, it creates "moral hazard" in society. When borrowers see that repeated concessions are available despite failing to repay loans, they become more inclined to spend borrowed money on luxury consumption – such as expensive cars or foreign travel – instead of investing in productive sectors.

"As a result, honest borrowers become discouraged, while wilful defaulters are further emboldened. Overall, he said, the trend is undermining discipline in the banking system and weakening the sector's long-term sustainability," added the economist.

Bangladesh and Pakistan on Saturday reaffirmed their commitment to deepening bilateral engagement and expanding cooperation across key sectors, as senior ministers from the two countries held talks in the capital, with a focus on regional connectivity and people-to-people contacts.
FE

The discussion took place when State Minister for Foreign Affairs Shama Obaed Islam met visiting Pakistan’s Minister for Interior and Narcotics Control Syed Mohsin Raza Naqvi at a city hotel, according to a Foreign Ministry press release.

During the meeting, the two ministers discussed a wide range of issues of mutual interest and expressed satisfaction over the recent momentum in bilateral engagement, reaffirming their shared commitment to further strengthening relations between the two countries.

They observed that significant untapped potential remains for expanding cooperation in trade and commerce, sports, culture, women’s entrepreneurship, education, science and technology, and digital innovation.

The two sides also underscored the importance of enhancing people-to-people contacts and promoting greater institutional collaboration to deepen bilateral ties.

Shama reiterated the Bangladesh government’s commitment to revitalising the South Asian Association for Regional Cooperation (SAARC) as an important platform for regional cooperation, connectivity and shared prosperity.

Both sides stressed the need for stronger regional cooperation for the collective benefit of the people of South Asia.

Bangladesh Shipping Corporation reported a 16% year-on-year decline in net profit for the January-March quarter of FY2025-26, as a sharp fall in interest income from fixed deposits offset strong revenue growth.

According to the company's unaudited financial statements, quarterly revenue rose 19% to Tk158.63 crore. However, net profit dropped to Tk63.79 crore from the corresponding period last year, with earnings per share (EPS) falling to Tk4.18 from Tk4.95.

The state-run shipping company said income from Fixed Deposit Receipts (FDRs) plunged 60% to Tk25.51 crore during the quarter after it utilised a large portion of its cash reserves to finance fleet expansion.

In September 2025, the BSC board approved the purchase of two bulk carriers from China at a cost of $76.7 million, or around Tk935 crore – the first vessel acquisition funded largely through the company's own resources. To finance the move, BSC withdrew nearly Tk700 crore from its FDR accounts, while the remaining amount was arranged through borrowing.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel
For the first nine months of FY26, BSC's revenue increased 7% to Tk459 crore, though cumulative net profit declined 9% to Tk200 crore.

Its net asset value (NAV) per share rose to Tk115.45 due to higher retained earnings, while net operating cash flow per share (NOCFPS) fell to Tk16.80 amid higher interest expenses and supplier payments.

The corporation is also facing geopolitical risks in international shipping operations. Its vessel, MV Banglar Joyjatra, has remained stranded at Jebel Ali Port since 11 March with 31 Bangladeshi sailors onboard due to escalating Iran-US-Israel tensions. The incident comes years after the 2022 missile strike on MV Banglar Samriddhi at Ukraine's Olvia port.

Despite the temporary pressure on profitability, company insiders said the new vessel acquisition is expected to strengthen BSC's long-term operational capacity and reduce dependence on chartered ships. BSC shares closed 0.48% lower at Tk103.40 on Thursday at the Dhaka Stock Exchange.

Nine months into the current fiscal year, Bangladesh has managed to implement only 36% of its Annual Development Programme (ADP). Yet, the government has moved to raise the development budget by another 50% next year, highlighting a widening gap between ambition and execution.

The Planning Commission yesterday gave preliminary approval to a Tk3 lakh crore ADP for FY2026-27, marking a Tk70,000 crore, or 30%, increase from the original ADP for the current fiscal year.

The contrast becomes sharper when compared with the revised ADP. In January, the government slashed the current year's ADP by Tk30,000 crore, a 13% cut, after ministries and agencies failed to utilise allocated funds at the expected pace.

Now, despite struggling to fully spend the downsized Tk2 lakh crore programme, the government is preparing an even larger development outlay.
ADP implementation rate rises slightly, but actual spending shrinks

The figures raise questions about the country's public investment strategy, particularly whether implementing agencies have the capacity to deliver such an expanded pipeline of projects amid persistent bottlenecks, procurement delays and weak project readiness.

According to the proposed allocation, the transport and communication sector will receive the highest outlay at Tk50,092 crore, accounting for 16.7% of the total ADP. Education follows with Tk47,591 crore, while health has been allocated Tk35,535 crore.

Power and energy will receive Tk32,691 crore, and housing Tk20,361 crore. Together, these five sectors account for nearly 62% of the entire proposed ADP.

The Bangladesh Investment Development Authority (Bida) has proposed gradually allowing 80% of import goods to be cleared through private Inland Container Depots (ICDs), or off-docks, in a move aimed at reducing congestion at Chattogram Port and improving logistics efficiency.

The proposal has been submitted to the finance ministry as part of a broader deregulation initiative to facilitate trade and improve the ease of doing business, officials concerned told The Business Standard.

According to Bida, implementation of the proposal could increase the handling capacity of the New Mooring Container Terminal (NCT) and Chittagong Container Terminal (CCT) by around 1.6 to 2 times by reducing pressure on port operations.

Currently, the National Board of Revenue (NBR) allows the clearance of only 65 categories of imported goods through private ICDs, although all export activities are already conducted through 21 off-docks across the country.

Bida said the limited scope for import clearance through ICDs creates congestion in port operations and slows down the import process.

In most countries, both import and export activities are largely handled through off-docks, it added.

To ensure compliance, the agency has also proposed introducing a regular risk-based review system for off-docks.

Business leaders and economists said the initiative could help reduce operational costs, shorten lead time and increase investor confidence.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, said Bangladesh still faces challenges related to the cost of doing business, turnaround time in port management and slow implementation of logistics reforms.

"Such initiatives are positive for attracting investment and increasing competitiveness," he said, adding that lead time has become a major factor alongside price and quality in international trade.

According to data from the Chittagong Port Authority, the port handled 34,09,069 TEUs of containers between January and December 2025.

Abul Kasem Khan, chairperson of Business Initiative Leading Development, described the proposal as timely.

"If the use of ICDs is increased, pressure on the port will decrease and congestion will be reduced," he said, adding that customs-related activities are internationally handled outside the main port area.

Bida has also proposed expanding banking and customs services to support effective 24-hour port operations.

Although port activities currently continue around the clock to some extent, related banking services remain largely limited to office hours and working days, causing delays in LC processing, payment clearance and other import-export procedures.

The agency recommended extending banking support throughout the week and moving most customs clearance procedures fully online to ensure uninterrupted 24/7 operations.

Bida said integrated round-the-clock operations would significantly reduce goods clearance time, improve overall efficiency and align Bangladesh's trade system with international standards.

The agency has further proposed integrating ASYCUDA World, the National Single Window, and systems used by other regulatory agencies into a single interoperable digital platform.

According to the proposal, businesses would be able to submit information once, which would then be automatically shared among all relevant agencies, reducing duplication, delays and procedural complexities.

Abul Kasem Khan said integrating licence and permit systems with the NSW would make trade processes faster and more efficient.

"Providing information once so that it can be used by various agencies is now the global standard," he said.

Last month, speaking at a consultative committee meeting organised by NBR and Federation of Bangladesh Chambers of Commerce and Industry, Finance and Planning Minister Amir Khosru Mahmud Chowdhury said obstacles to doing business would be removed to support private sector-led growth.

Bangladesh’s goal of reaching $100 billion in export earnings by 2030 may not be achievable without major improvements in trade facilitation, port efficiency and logistics capacity, economist M Masrur Reaz warned yesterday.

He said exports are currently around $55 billion, but Bangladesh still faces high trade costs, long cargo waiting times, congestion and weak logistics infrastructure compared with regional competitors such as Vietnam and India.

Bangladesh’s export costs are about one and a half times higher than Vietnam’s and, in some cases, nearly double those of India
M Masrur Reaz Chairman of PEB

“Reaching $100 billion in exports by 2030 or even by 2033 with the current trade facilitation and logistics capacity will not be possible unless we significantly improve efficiency, reduce time and cut costs,” said Reaz, chairman of Policy Exchange of Bangladesh.

He made the remarks at a roundtable titled “Integrated Port and Logistics Development for a Trade-Driven Bangladesh”, organised by the Dhaka Chamber of Commerce and Industry (DCCI) in Dhaka.

Reaz said Bangladesh’s export costs are about one and a half times higher than Vietnam’s and, in some cases, nearly double those of India. He also noted that import processing takes significantly longer in Bangladesh.

He added that the country continues to lag in global competitiveness, logistics performance and productivity, which is weakening its ability to attract investment and integrate into global supply chains.

Comparing Bangladesh with Vietnam, he said Vietnam has increased its exports to nearly $400 billion through sustained reforms in trade facilitation and logistics. In contrast, Bangladesh remains at about $55 billion, even though both countries had similar export levels in the late 1990s.

Reaz said ports will play a crucial role in shaping Bangladesh’s future export competitiveness, especially as global supply chains shift and China moves away from low-value garment production worth around $35 to $40 billion annually.

Citing World Bank data, he noted that “cutting logistics costs by 25 percent could boost exports by 20 percent” and that “reducing port dwell time by just one day could increase exports by 7.4 percent.”

However, he said, relying only on public funding for port development is no longer realistic due to limited government resources and fiscal pressure.

“Developing ports through a fully public-sector model is neither feasible nor desirable. We have to move toward public-private partnerships,” he added.

Md Salim Ullah, director general of the Bangladesh Institute of Management (BIM), said Bangladesh is still far behind in managing integrated ports and logistics efficiently, which is keeping the cost of doing business high.

Md Habibur Rahman, former member (administration and planning) of the Chittagong Port Authority, said rail connectivity is the only long-term solution for cargo transport, as there is limited scope to further expand the Dhaka-Chattogram highway.

He also suggested involving the private sector in operating at least one seaport, saying it would improve competition, service quality and efficiency.

Razeev H Chowdhury, senior vice president of DCCI, said long cargo clearance procedures, slow transport systems and the lack of modern cold-chain facilities are making Bangladesh’s supply chain costly and inefficient.

He called for paperless and automated port systems, infrastructure development through public-private partnerships, and higher investment in cold-chain logistics.

Md Shamsul Hoque, professor of Civil Engineering at BUET, criticised Bangladesh’s fragmented infrastructure planning and called for an integrated multimodal transport system along with institutional reforms.

He said infrastructure development has mostly focused on passenger transport, while freight transport -- despite being more complex and economically important -- has been largely neglected.

He also pointed out the lack of integrated transport planning, noting that roads, railways, waterways and aviation are developed separately instead of as a unified system. Even when facilities are located close to each other, such as an airport and a railway station, there is still no seamless connectivity between rail, metro, road and air transport.

Some foreign shareholders and owners of Ring Shine Textiles Limited – a company operating in Bangladesh since 1997 – have written to Prime Minister Tarique Rahman seeking a meeting to present the firm's ongoing crisis and request government support to protect the interests of public shareholders.

In the letter, the foreign investors said Ring Shine Textiles, a listed company that raised Tk150 crore through an initial public offering (IPO), is facing the threat of eviction due to a large volume of unpaid dues to the Bangladesh Export Processing Zones Authority (BEPZA).

They also noted that they have lost business operations of subsidiary garment units – Avant Grade Fashion and Shine Fashion Co (Pvt) Ltd.
Nine investors from Thailand, Taiwan, and Indonesia established the 100% export-oriented Ring Shine Textiles at the Dhaka Export Processing Zone (DEPZ).

Currently, two of the nine foreign investors remain stranded in Bangladesh because of travel bans since 2020, while others are reportedly avoiding travel to the country over fears of facing similar restrictions.

Aniruddho Pial, the current managing director of Ring Shine Textiles Limited, said the company had performed strongly in the ready-made garment sector and contributed significantly to the economy until 2019.

However, he said the company ran into trouble during the Covid-19 pandemic and has since struggled with a business slowdown, mounting debt burdens, growing dues to BEPZA, and a shortage of working capital.

Against this backdrop, the company's foreign investors have sought a meeting with the prime minister to present the company's current situation and seek government assistance to safeguard the interests of public shareholders.

"We have already received loan-rescheduling facilities from Bangladesh Bank. Now, as the central bank is forming a Tk40,000 crore special fund for sick and closed factories, we will seek financial assistance from the fund," Pial said.

Controversial IPO listing

According to the letter, Ring Shine's troubles began after a controversial IPO process allegedly involving FAR Group's Abdul Kader Faruk and Indian textile trader Ashok Kumar Chirimar.

The investors described in detail how the disputed IPO process led to the company's current crisis and the difficulties faced by the foreign shareholders.

Ring Shine entered the stock market in 2019 through a Tk150 crore IPO – one of the largest offerings in the textile sector. Before going public, the company increased its paid-up capital from less than Tk10 crore to more than Tk285 crore.

BSEC findings

Findings by the Bangladesh Securities and Exchange Commission (BSEC) revealed that a syndicate involving controversial tax official Matiur Rahman and FAR Group Chairman Abdul Kader Faruk allegedly embezzled hundreds of crores of taka by issuing new shares of Ring Shine Textiles without investing any funds.

According to the findings, the group allocated shares worth Tk112 crore at a face value of Tk10 each without depositing any money into the company's account.

The BSEC later decided to seek travel bans on 13 individuals linked to the company, including sponsors, former directors, the managing director, executive director, chief financial officer, and company secretary, as well as Faruk and Chirimar.

Once a profitable company, Ring Shine's financial condition deteriorated after its stock market listing. The company also suffered severe setbacks during the coronavirus pandemic as foreign buyers suspended orders amid weakening global demand.

When irregularities surrounding the IPO came to light, the BSEC froze the company's unutilised IPO funds that were intended for business expansion and loan repayment.

Investors left in the dark

Ring Shine has also failed to publish financial statements for the fourth quarter of FY25 and the first three quarters of the current fiscal year, leaving investors unaware of the company's financial condition for nearly a year.

According to previous reports by The Business Standard, BEPZA has initiated proceedings to cancel six additional lease agreements of Ring Shine for failing to clear outstanding dues.

The Dhaka EPZ office issued a notice expressing its intention to terminate the leases of plots no 157-163. Earlier, on 20 February 2025, BEPZA had cancelled leases for plots no 231-236 on similar grounds.

As of 25 January 2025, Ring Shine's outstanding dues to BEPZA stood at around $16.19 million, against a deposit of only $2,54,945. Despite repeated reminders, the company has yet to clear the arrears.

In November last year, Bangladesh Bank allowed publicly listed Ring Shine Textiles to reschedule its loans for up to 10 years, including a two-year moratorium period.

The company also received an eight-year rescheduling facility for its working capital loans – including overdraft, cash credit, and forced loans – with a 2% down payment requirement, of which 1% was to be paid before rescheduling and the remaining 1% after six months.

Aniruddho said that government support would enable the foreign-owned company to resume full operations and help foreign investors save the firm, which in turn could restore confidence among foreign investors.

Brent crude futures jumped as much as 3 percent on Friday, a ​day after the US and Iran traded air strikes, but pared gains as traders hoped for a ‌longer pause in the fighting that has shut shipping in the Strait of Hormuz.

Brent crude futures settled at $101.29 a barrel, up $1.23 or 1.23 percent, after rising as much as 3 percent during the session.

US West Texas Intermediate (WTI) futures finished at $95.42 a barrel, up 61 cents, or 0.64 percent.

Both contracts were settled with ​weekly declines of more than 6 percent.

“We’re treading water here, rightfully so,” said John Kilduff, partner with Again Capital. “We’re on ​the cusp of a breakthrough in negotiations or we’re on the cusp of a renewal ⁠of the fighting. We’ve been here a lot.”

“There is a sense in the market that there is going to be ​an agreement and we’ll get the next phase which would be 30 days to hammer out an agreement (between Iran and ​the US),” Kilduff said.

Throughout the day, traders felt like they had been swatted back and forth like a tennis ball.

“We’re still playing the headline-o-rama game,” said Phil Flynn, senior analyst with Price Futures Group. “Ship movement in the Persian Gulf is going about as well as can ​be expected. We’re kind of working around the edges.”

US and Iranian forces clashed in the Gulf, and the UAE came ​under renewed attack as Washington awaited a response from Tehran to its proposal to end the conflict, which began with joint US-Israeli ‌airstrikes across ⁠Iran on February 28.

US President Donald Trump later on Thursday told reporters the ceasefire was still in effect and sought to play down the exchange.

However, on Friday, Trump renewed an ultimatum demanding Iran give up its nuclear ambitions.

“How quickly can supply be returned from Gulf states, what will the state of inventories be as we approach peak gasoline season, and what sanctions would ​look like post-settlement are all worthy ​of thought. But none ⁠can be addressed until there is a long-term solution to hostilities,” said PVM Oil Associates analyst John Evans.

“The US administration continues to oversell the prospects of a thaw, and an ​optimism-biased market buys into it,” said Vandana Hari, founder of oil market analysis firm Vanda ​Insights.

“Curiously, each time, ⁠the rebound is gradual and incomplete, making the head fakes at least somewhat effective.”

Meanwhile, the US Commodity Futures Trading Commission is investigating oil price trades totalling $7 billion placed shortly ahead of key Iran war-related announcements by Trump, Reuters reported on Thursday.

Most involved short ⁠positions, or ​bets on prices falling, placed on the Intercontinental Exchange (ICE) and Chicago ​Mercantile Exchange (CME) and were placed shortly before Trump statements announcing attack delays, the ceasefire or other changes to Iran policy that led to a decline ​in oil markets.

Global stock markets diverged and oil prices rose Friday as fresh US-Iran clashes in the Strait of Hormuz jolted hopes for a deal to end the Middle East war and reopen the crucial waterway.

While European bourses retreated, the S&P 500 and Nasdaq indices both pushed to fresh records on solid US jobs numbers. The Dow ended flat.

"No negative news sticks to this bull market, and it just keeps working its way higher," said CFRA Research's Sam Stovall.

A US fighter jet disabled two Iranian-flagged tankers to enforce a port blockade on Friday, prompting retaliatory attacks from Iran. The latest incident came after another flare-up overnight in the strait.

Meanwhile, US data showed the economy added 115,000 jobs in April, more than double the forecast.

But US consumer confidence was at an all-time low according to a University of Michigan survey, with Americans weighed down by concerns about high prices and the fallout of the US-Israel war on Iran.

Stovall cited both the consumer confidence figure and the brittle conditions in the Middle East as headwinds the market has shrugged, but added, "I would not be surprised if we do see some digestion of recent gains take place in the near-term."

Bret Kenwell, eToro's US investment analyst, noted that if the labor market and broader economy continue to hold up as rising energy prices fan inflation, the Fed will have less justification to cut interest rates.

"In other words, good news may actually be good news again -- just not for investors hoping the Fed rides in with quick rate cuts," he said.

Investors often consider bad economic news to be good news in the sense it increases chances of interest rate cuts.

The dollar retreated against its main rivals.

Europe's main stock markets finished the day lower.

The British pound held up as Keir Starmer vowed to carry on as UK prime minister after his Labour Party suffered big losses to the hard-right in local elections.

Critics say Starmer has swerved from one policy misstep to another, and he has been embroiled in a scandal over Peter Mandelson, who was sacked as ambassador to Washington over his links to US sex offender Jeffrey Epstein.

The prime minister has also failed to fulfil his main promise of spurring economic growth, with impatient Britons still suffering a cost-of-living crisis, including from high energy prices.

Elsewhere on Friday, the yen firmed after Japanese media reported that authorities had spent around $64 billion since last week propping up the currency.

The market interventions reportedly began on April 30 when the yen weakened to near 160 per US dollar, the lowest in almost two years.

Since then there have been several spikes in the value of the Japanese currency, sparking speculation of further moves by the government.

China's trade grew faster than expected last month, official data showed Saturday, withstanding pressure from war in the Middle East and reversing a decline in exports to the United States.

Booming trade has represented a vital lifeline for Beijing in recent years as the domestic economy lags, with sluggish spending and a stubborn debt crisis in the property sector weighing on activity.

The war with Iran, launched by the United States and Israel in late February, has produced new risks for China's economy, though its trade has so far appeared to be weathering the disruptions.

Exports from the manufacturing powerhouse were up 14.1 percent in April compared to the same month last year, the General Administration of Customs (GAC) said.

The growth outpaced a Bloomberg forecast of 8.4 percent based on a survey of economists, and also picked up significantly from the 2.5 percent increase in March.

Analysts say China's diversified energy supply insulates it from immediate shocks from the war, though any global economic downturn would eventually weaken demand for its exports.

Amid a shaky truce, observers are awaiting a high-stakes meeting in Beijing next week between Chinese President Xi Jinping and US counterpart Donald Trump.

The talks previously set for late March were delayed by the war in the Middle East, which has sent global energy prices soaring as shipping through the vital Strait of Hormuz has effectively come to a halt.

The world's second-largest economy produced a record-breaking trade surplus last year at $1.2 trillion.

For Trump, imbalance in the countries' trade relationship has long been a major sticking point.

Ahead of the key meeting, China's exports to the United States grew 11.3 percent year-on-year in April, GAC data showed Saturday, returning to growth after dropping sharply by 26.5 percent in March.

Shipments to the United States had also dropped 11 percent in January and February combined.

Trade is set to be a prominent topic in the upcoming meeting between Xi and Trump, with both leaders eyeing key concessions for their massive economies.

Beijing has set an official target growth range for this year of 4.5-5.0 percent -- the lowest in decades.

Early indications suggest the country's economy is on pace, with growth in the first quarter reaching the top of that range at five percent, according to government data released in April.

Economists argue that China should shift towards a growth model powered more by household consumption than traditional drivers including real estate and infrastructure investment.

In a positive sign for domestic spending, imports into the world's second-largest economy grew 25.3 percent year-on-year last month, the GAC data showed Saturday.

That figure beat a Bloomberg forecast of 20.0 percent but was slightly lower than the 27.8-percent surge in March.

Monthly inflation data due Monday is expected to shed further light on how efforts by leaders to encourage consumers to pull out their wallets have been faring.

The liquidation of six troubled non-bank financial institutions, a decision taken by the interim government on the central bank's recommendation, will not proceed this fiscal year as the current government has been unable to allocate the Tk5,600 crore set aside to reimburse depositors, officials said.

The delay has driven those depositors onto the streets. Today (6 May), more than a hundred of them gathered in silent protest outside the Bangladesh Bank headquarters, their faces covered with black cloth.

Their demand was straightforward: an immediate, realistic, and actionable roadmap for returning their money, in line with the July 2026 deadline cited by former governor Ahsan H Mansur.

"A clear timeline was given. We are holding them to it," one protester said.

Responding to queries, central bank spokesperson Arief Hossain Khan said the liquidation decision had been made during the interim administration, when assurances were given that necessary funds would be provided to reimburse depositors. "Based on that assurance, the former governor announced the liquidation."

According to him, the current government is prioritising spending on its political programmes, including social support initiatives like Family Card, Farmer's Card, etc, leaving insufficient fiscal space to finance the liquidation process at present.

"If the government is given some time and funding is secured, the liquidation process will begin, and depositors will then receive their money," he said.

The spokesperson noted that the financial condition of the six to seven institutions was so weak that revival was no longer feasible, prompting the decision to proceed directly with liquidation rather than merger.

The central bank board had approved the liquidation of six institutions on 27 January. The entities are FAS Finance, Premier Leasing, Fareast Finance, Aviva Finance, People's Leasing and International Leasing, all of which have non-performing loan ratios ranging from 75% to 99%.

A senior official from the central bank's Bank Resolution Department said preparations for liquidation are complete, but implementation hinges entirely on government funding.

He added that discussions have been held with the governor, who indicated that while all six institutions may not be liquidated simultaneously, the process will move forward gradually. However, no assurance has been given that it will be completed within the current fiscal year.

An official from the Department of Financial Institutions and Markets, speaking on condition of anonymity, said the government should clearly communicate its decision, as depositors continue to seek answers without receiving any definitive timeline.

He described cases of severe hardship, including one depositor who had sought assistance while undergoing medical treatment but later died due to a lack of funds.

Depositors demand urgent action

An alliance representing more than 12,000 depositors of the six institutions has formally urged the central bank to take immediate steps to facilitate the return of their long-stuck funds.

In a memorandum submitted to the governor, the platform said depositors have been facing acute financial hardship, mental distress and a humanitarian crisis as their savings have remained locked for nearly seven years.

"Many depositors are being deprived of treatment for critical illnesses such as cancer, kidney disease and heart conditions due to a lack of funds," the memorandum said, adding that several have died without receiving necessary medical care.

The alliance called on the central bank, as the regulator, to take urgent action and ensure a clear roadmap for repayment within the previously announced timeframe.

Protesters said many had invested retirement benefits and proceeds from the sale of land in these institutions to support household expenses, but have been unable to access their savings for years.

"After waiting for seven years, we still have not received our money. Our patience has run out, which is why we have taken to the streets," one depositor said.

Sector under strain

The broader non-bank financial sector remains under significant stress, with the central bank identifying 20 out of 35 institutions as distressed.

These troubled institutions collectively hold loans worth Tk25,808 crore, of which Tk21,462 crore are classified as non-performing, representing 83.16%. Against this, the value of collateral stands at Tk6,899 crore.

In contrast, the remaining 15 relatively stable institutions reported a non-performing loan ratio of 7.31%, generating profits of Tk1,465 crore last year and maintaining a capital surplus of Tk6,189 crore.

Deposits in the 20 distressed institutions amount to Tk22,127 crore, including approximately Tk4,971 crore in individual deposits. Central bank officials believe that this amount may be required initially to support liquidation and restructuring efforts.

The regulator has also assured that employees of the affected institutions will receive all benefits in accordance with service rules following liquidation.

Bangladesh needs to move up the global value chain (GVC), with fresh policy measures aiming to support this by promoting diversification and higher value-added activities, according to a new Asian Development Bank (ADB) study.

The study on GVCs, growth, and inequality was released yesterday.

From a trade and GVC perspective, Bangladesh has become heavily dependent on readymade garment (RMG) exports, with apparel making up over 80 percent of total exports, while the share of textiles has declined.

The country’s participation in the textiles and textile products GVC is also concentrated in low-value downstream work, mainly assembling and finishing imported materials.

According to ADB data, compared with other major textile exporters in developing Asia and the Pacific, Bangladesh has a relatively low ratio of forward to backward GVC linkages.

This shows a strong dependence on imported fabrics, yarns, dyes and other inputs, with limited involvement in higher-value stages of production.

Strong specialisation in textiles and textile products has helped Bangladesh absorb labour and boost exports, but it has also limited structural upgrading. As a result, the country has joined GVCs but has not moved up within them.

This is reflected in weak forward linkages and limited knowledge transfer from global lead firms, which restrict improvements in processes, products and functions.

GVC participation rates are also below the global average, showing less integration across different stages of production compared with peer exporters.

In addition, the industrial base outside textiles and textile products remains narrow, limiting value-added diversification and the development of local suppliers.

The report also said Bangladesh faces challenges in its GVC participation. Although exports and production in the RMG sector continue to grow, this expansion is not translating into stronger employment growth.

Wages have also started to rise since Bangladesh was reclassified as a lower-middle-income country in 2015. This has raised concerns about a possible “middle-income trap,” where economies struggle to move from middle- to high-income status.

Preferential market access, such as the European Union’s Everything but Arms (EBA) scheme, has supported the growth and integration of the RMG sector. However, recent changes in rules of origin are limiting opportunities to upgrade in certain product areas, including knitwear.

Participation in GVCs, especially in the apparel sector, has been central to Bangladesh’s export-led growth. It has also supported inclusive development by creating jobs -- particularly for women -- and reducing poverty.

The sector now accounts for most export earnings and employs around 4.5 million people, more than half of them women. Despite this progress, concerns remain about continued reliance on low wages and poor working conditions.

Efforts have been made to improve safety and sustainability in the industry, including the Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety.

These were introduced after the Rana Plaza collapse in 2013, which killed more than 1,100 people in a building housing five garment factories. However, the report said these efforts are still not complete.

“Bangladesh has done very well in garments, but that is a very labour-intensive activity with little upgrading to higher value-added work,” said ADB Chief Economist Albert Park, speaking at a media briefing on the sidelines of the 59th Annual Meeting of the Board of Governors of ADB in Samarkand, Uzbekistan, which concluded yesterday.

He added that Bangladesh should look for opportunities to move up within GVCs.

“And also, for Bangladesh, there is such a concentration in this one export sector that it is very risky for the economy if something unexpected occurs that really affects that sector, as we have seen in the past,” Park said.

He added that Bangladesh should diversify into other sectors and allow easier import of inputs without tariffs.

“The same kind of treatment that readymade garments get should be extended to other sectors to expand opportunities,” he said. “And meanwhile, really think about opportunities to upgrade.”

Neil Foster-McGregor, principal economist at ADB, presenting the main findings of the report, said production processes are becoming increasingly capital-intensive.

He added that geopolitics and rising sustainability demands will reshape GVCs.

He said future competitiveness will depend on resilience, sustainability and firm capabilities, not just low labour costs.

Bangladesh has settled an import bill of $1.51 billion for the March-April period under the Asian Clearing Union (ACU), a move that is expected to reduce the country's foreign exchange reserves.

Bangladesh Bank Executive Director and spokesperson Aref Hossain Khan confirmed the payment today (6 May).

According to central bank data, the country's gross reserves stood at $35.33 billion at the end of 6 May. Under the International Monetary Fund's BPM6 calculation method, reserves were recorded at $30.64 billion.

Reserves typically decline after ACU payments, and a similar trend is expected this time. However, officials noted that it takes a few days for adjustments to be reflected, meaning the immediate impact may not be visible.

Earlier, Bangladesh paid $1.36 billion for the January-February period. The ACU bill stood at $1.53 billion for November-December of the previous year, while $1.61 billion was paid for September-October that year.

The ACU is a regional payment arrangement among several Asian central banks that facilitates the settlement of import and export transactions among member countries every two months.

Bangladesh conducts trade settlements with ACU member states-including India, Iran, Nepal, Pakistan, Sri Lanka, Myanmar, Bhutan and the Maldives-through this mechanism, while transactions with other countries are generally settled immediately.

The market capitalisation of Samsung Electronics' common stock surpassed $1 trillion on Wednesday, making it the second Asian company after TSMC to reach the milestone.

Samsung Electronics, the world's top memory chipmaker, saw its market value reach 1,500 trillion won ($1.03 trillion) in early trading in Seoul on Wednesday, tracking sharp gains of AI-related stocks in the US overnight.

Shares of the South Korean chip giant were up 12% at 09:52 am (0052 GMT) in Seoul, outstripping the benchmark Kospi's 5.4% gain.

The S&P 500 and the Nasdaq notched record-high closes on Tuesday, lifted by Intel and other AI-related stocks, as a US-Iran ceasefire held and investors focused on strong quarterly earnings.

The Asian Development Bank (ADB) has projected that oil prices will average $96 per barrel in 2026 -- well above the pre-war average of $69 -- as key infrastructure has been damaged and, despite the ceasefire in the Middle East, transit through the Strait of Hormuz has not resumed.

Prices may moderate to $80 on average in 2027, according to an updated ADB analysis on the impact of the Middle East conflict on Asia and the Pacific, released yesterday.

Fertiliser prices -- especially those of urea, a key crop nutrient -- have also shot up, fuelling inflationary expectations and increasing fiscal pressure on nations, particularly energy- and fertiliser-importing ones like Bangladesh.

The multilateral lender has lowered its 2026 growth projections for developing Asia and the Pacific, saying the conflict has proved far more disruptive than its early stabilisation scenarios suggested.

Regional GDP growth is now forecast at 4.7 percent, a 0.4 percentage-point drop, while the inflation estimate has been raised by 1.6 percentage points to 5.2 percent.

“Transit through the Strait of Hormuz remains severely impaired despite the April ceasefire. Physical damage to energy facilities across the Gulf will prolong supply disruptions beyond the end of the conflict -- with some repairs expected to take three to five years,” said ADB Chief Economist Albert Park.

“A new reference scenario incorporating persistent supply constraints points to materially slower growth and higher inflation; a severe downside scenario implies substantially larger impacts,” he said at a media briefing on the sidelines of the ADB Annual Meeting in Samarkand, Uzbekistan.

The four-day event concluded yesterday with ADB President Masato Kanda terming the conference a success at the closing ceremony.

Park said impacts depend on imported energy dependency, fertiliser import exposure, and other economy-specific factors. Across subregions, the largest 2026 growth downgrades have occurred in South Asia, the Pacific, and developing Southeast Asia.

The Manila-based agency now projects a 5.7 percent growth in South Asia in 2026, down from an earlier forecast of 6.3 percent. Inflation in the subregion is projected to rise to 7.6 percent, up 2.6 percentage points from the previous estimate.

“Markets price in persistently tighter conditions, not a quick reversal.”

The ADB said supply disruptions have exerted upward pressure on the prices of non-oil commodities, particularly fertilisers.

“Prices are surging,” Park said, adding that urea marked the largest non-energy price shock and that it has a direct impact on food costs.

South Asia sources 35 percent of its fertiliser from the Middle East. Bangladesh is a major importer of fertiliser from the Gulf nations.

“Food prices typically follow within one quarter,” he added.

Responding to a question on Bangladesh’s economic growth, he said the country-specific numbers for Bangladesh based on the reduced growth forecast will be released by the end of this month.

“So, the regional one is an indicator; I think Bangladesh’s growth will probably be a bit lower. They would have more headwinds, in effect, than the rest of the South Asia average,” he said.

“But I think you should wait; our next Asian Development Outlook will have a much more thorough assessment of Bangladesh, and that report will be coming out in July or early August,” he said.

To tackle the challenges, the ADB suggested avoiding blanket fuel subsidies and excise tax cuts.

High-income households consume more energy, and subsidies are fiscally very costly if prices stay elevated, he said.

“Policymakers should target support to vulnerable households, maintain monetary credibility, and accelerate investment in energy resilience,” he said.

Park suggested targeted cash transfers to protect vulnerable households and ensure fiscal space. A data-dependent monetary policy is needed.

“This is a supply shock, not a demand shock. Monitor inflation expectations and second-round effects before tightening; avoid choking growth unnecessarily,” he added.

Bangladesh’s top garment exporters association has offered to help the United States define the rules governing a zero-tariff benefit tied to the use of US cotton and man-made fibre (MMF).

The offer was made as US officials are yet to clarify how the facilities -- stated in the bilateral trade deal signed in February amid reciprocal tariff pressure -- will work in practice.

Members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) made the proposal at a meeting in Dhaka yesterday with a delegation from the United States Trade Representative’s (USTR) office, led by Assistant USTR for South and Central Asia Brendan Lynch.

The delegation arrived on May 5 and is holding meetings through May 7.

Under Article 5.3 of the Agreement on Reciprocal Trade (ART), the US committed to a mechanism allowing certain Bangladeshi textile and apparel goods to enter the American market at a zero reciprocal tariff rate, provided they are made from imported US cotton or MMF.

“We sought clarity on the whole issue of using American cotton and its benefits from the USTR officials at the meeting,” said Faisal Samad, a BGMEA director who attended the meeting.

According to industry insiders, two interpretations are currently circulating among exporters.

One holds that the zero tariff would apply only to the portion of a garment’s value attributable to US-sourced inputs. Since fabric and fibre typically account for 70 to 80 percent of a finished garment’s cost, that would mean the remaining tariff -- either the 10 percent universal rate or the 19 percent reciprocal rate set for Bangladesh -- would apply only to the rest.

The other reading is that duty-free access would cover the entire garment if US cotton or MMF were used in production.

Exporters also raised questions about traceability -- how authorities would verify that a garment was made using US inputs -- and about whether tariff treatment would differ depending on whether raw cotton or processed fibre and fabric were sourced from the US.

The USTR delegation said they are working on the modalities and will share updates, Samad said. BGMEA offered to cooperate in developing those rules.

Around 40 percent of Bangladeshi garment exporters currently use US upland cotton, primarily for high value-added products.

After a separate meeting with the USTR team yesterday, Rashed Al Mahmud Titumir, the prime minister’s finance and planning adviser, said Bangladesh’s priority is expanding its market concentration in the US and developing new export categories beyond garments.

He noted Bangladesh wants further consultation meetings with the US on the agreement.

Stating that currently, Bangladeshi garment items are dominating in the US market, he said, “Commercial, health and education and humanity issues may also be discussed with the US when the bilateral discussions take place between the two countries.”

Bangladesh also wants expansion of strategic assistance from the US in agricultural cooperation and science research, he added.

Earlier on Tuesday, speaking after a meeting with the USTR team, Commerce Minister Khandaker Abdul Muktadir said the government intends to make full use of the agreement.

“It is a reality, and we want to make the best use of it to expand the country’s trade and investment,” he said.

US goods trade with Bangladesh totalled an estimated $11.8 billion in 2025.

American imports from Bangladesh reached $9.5 billion -- up 13.3 percent from 2024 -- while US exports to Bangladesh were $2.3 billion.

The resulting trade deficit stood at $7.1 billion, a 17.9 percent increase from the previous year. Garments account for 86 percent of Bangladesh’s exports to the US.