The government has formed a high-powered panel to review the widely discussed ordinances on revenue reform framed by the Prof Muhammad Yunus-led interim administration.

The ordinance and its subsequent amendment on Revenue Policy and Revenue Management, along with 12 other ordinances, lost validity as the parliament failed to ratify them within the constitutionally mandated 30-day period since its first sitting on March 12.

According to a Cabinet Division notification issued on April 28, the nine-member panel will be headed by Ismail Zabiullah, the prime minister’s adviser on public administration, to re-examine the Revenue Policy and Revenue Management Ordinance and its amendment.

Framed in May 2025, the ordinances sought to separate tax policy formulation from collection and to form two divisions by dissolving the NBR, which drew massive protests from revenue officials in June
The committee includes Rashed Al Mahmud Titumir, adviser to the prime minister on finance and planning, along with the cabinet secretary and secretaries of the finance, public administration, and legislative divisions.

The National Board of Revenue (NBR) chairman will serve as the member-secretary of the panel to review the ordinance and make recommendations to propose a new bill for revenue reform, a key condition tied to the International Monetary Fund’s (IMF) $5.5 billion loan programme approved for Bangladesh.

Multilateral lenders, including the IMF, had long advocated reforms in the tax system and administration to boost revenue collection, as Bangladesh has one of the world’s lowest tax-to-GDP ratios.

Framed in May 2025, the ordinances sought to separate tax policy formulation from collection and to form two divisions by dissolving the NBR, which drew massive protests from revenue officials in June.

The process of separation was further delayed in the later months due to bureaucratic wrangling over the organogram and rules of business.

Subsequently, the interim administration left office, leaving the implementation of the law to the next elected government.

At a meeting with the Economic Reporters’ Forum on April 25, Finance Minister Amir Khosru Mahmud Chowdhury termed the country’s tax framework historically “half-baked” and said a new committee has been formed to separate tax policy from execution, ensuring future policies “genuinely reflect the will of the people.”

The vast majority of Bangladesh’s workforce remains in marginal conditions, outside the reach of formal labour protections, experts warned yesterday, calling for a shift in policy focus beyond the garment sector.

Around 85 percent of workers are engaged in the informal sector with little regulation or protection, Syed Sultan Uddin Ahmmed, former chairman of the Labour Reform Commission, said at a May Day discussion in Dhaka.

The programme, held at the Economics Reporters Forum office, was organised by the Network for People’s Action (NPA), a newly formed political party.

At the event, Ahmmed also noted that the dominance of ready-made garments (RMG) in national and international labour discourse obscures a far wider problem.

“As an export-oriented industry, the RMG sector remains at the centre of national and international discussion. While this sector is important, it should not overshadow the broader reality,” he said.

A stronger industrial base and labour movement in large sectors could eventually benefit workers in other areas, he said, calling for a more inclusive labour perspective.

“Sanitation workers, day labourers and informal workers continue to live in precarious conditions,” said the labour policy expert.

He added, “We celebrate long holidays, but for day labourers, even a few days without work can mean going without food… Yet there is no universal social security system to protect them.”

Ahmmed also criticised existing social protection measures as charity-driven rather than rights-based. “The fact that a single rainy day can leave a labourer’s family without food rarely enters policy thinking.”

Echoing the same, Prof Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), said the garment sector’s export growth had not translated into proportional gains for workers.

“Productivity has increased over the decades, yet real wages have lagged. That disconnect tells us something fundamental about the structure of our growth,” he said.

Raihan also pointed to a persistent narrative that stronger labour rights would hurt competitiveness. “This (narrative) has often been used to discourage workers from organising or demanding more.”

He added that labour discussions in Bangladesh too often stop at minimum standards.

“We rarely move beyond ensuring the bare minimum to discussing living wages or broader social protections,” he said.

Among others, Taslima Akhter, president of the Bangladesh Garment Sramik Samhati, also spoke at the event.

India and Bangladesh are taking steps to normalise bilateral relations by moving towards the full resumption of visa services, following a period of strained ties and restricted travel.

Bangladesh has already resumed issuing visas to Indian citizens across all categories, including tourism, business and medical travel, while India is aiming for a gradual restart of its visa operations over the coming weeks, says the Indian Express.

Indian visa services for Bangladeshi nationals are currently operating at 15–20% of their pre-December 2025 capacity, with priority given to medical cases and family emergencies. In contrast, Bangladesh has issued more than 13,000 visas to Indians since restoring operations around 20 February 2026.

The move follows a period of political upheaval after the August 2024 ouster of former prime minister Sheikh Hasina. Relations are being recalibrated under the new government of Prime Minister Tarique Rahman, whose swearing-in in February 2026 was attended by an Indian delegation.

Travel between the two countries had declined sharply amid tensions and visa curbs. The number of Bangladeshi visitors to India fell from 2.12 million in 2023 to 470,000 in 2025.

Officials in both countries have indicated that efforts to restore visa services are part of broader attempts to rebuild cooperation, including through high-level political engagement and closer economic and energy ties.

India recently transported diesel to Bangladesh to help ease energy shortages linked to the war in West Asia.

The expected arrival of India's new High Commissioner to Bangladesh, Dinesh Trivedi, is seen as a step that could facilitate the return to full-scale visa operations.

The parliament yesterday (30 April) passed two separate bills removing the maximum age limits for the post of chairmen and commissioners of the Bangladesh Securities and Exchange Commission (BSEC), as well as the chairman and members of the Insurance Development and Regulatory Authority (IDRA).

Previously, the age limits stood at 65 years for the BSEC and 67 years for the IDRA. With the passage of these amendments, the government will now be able to appoint individuals of any age to lead these two key financial regulatory bodies.

Finance Minister Amir Khosru Mahmud Chowdhury, who moved the bills, argued that the amendments were intended to make the laws more time-appropriate by allowing the recruitment of highly qualified, experienced, and skilled professionals.

He said that when the securities law was originally enacted in 1993, the average life expectancy in Bangladesh was around 57 years, whereas it now stands at 72 years. He stated that retaining the earlier age limits would prevent capable individuals from contributing effectively to the financial sector.

However, the bills faced strong resistance from opposition and independent lawmakers.

Independent lawmaker Rumeen Farhana called for the bills to be opened to public scrutiny, highlighting that retail investors suffered massive losses during the 1996 and 2010 market crashes, while over Tk1 lakh crore was allegedly siphoned off over the past 15 years.

Opposition lawmaker Akhter Hossen questioned whether the amendment was genuinely intended to find capable leaders or merely to facilitate the appointment of favoured individuals. Leader of the Opposition Shafiqur Rahman alleged that lawmakers were not given adequate time to review the documents.

Despite the opposing calls to send the bills to a standing committee for further review, the bills were ultimately passed by voice vote.

Russia's Deputy Prime Minister Alexander Novak said on Thursday that the OPEC+ group of leading oil producers would continue working together despite the departure of the United Arab Emirates, Russian news agencies reported.

According to the reports, Novak said he did not expect an oil price war to emerge following the UAE's exit given a global oil deficit.

The UAE said on Tuesday it was quitting OPEC, dealing a blow to the oil producers' group as an unprecedented energy crisis triggered by the Iran war exposes discord among Gulf nations.

The UAE was the fourth-largest producer in OPEC+, which comprises OPEC and its allies, while Russia is second, behind Saudi Arabia.

"In the current situation, it is hard to talk about a price war when there is a shortage in the market. What we are seeing instead is the deepest crisis in the industry," Novak was quoted as saying by Interfax news agency.

"Large volumes of oil are not reaching the market today, while demand significantly exceeds supply. This has created an imbalance due to serious logistical disruptions, including the situation in the Middle East," Novak said according to Interfax.

Novak also reiterated that Russia will remain in OPEC+, which was formed in 2016.

Bangladesh cited gaps in readiness, incomplete core reforms, and economic fallout from the Iran war as reasons for seeking an extension of the transition period for graduation from the least developed country (LDC) category by three more years at the public hearing of the UNCDP on April 29.

Commerce Minister Khandakar Abdul Muktadir attended the virtual hearing with Chair of the United Nations Committee for Development Policy (UNCDP) José Antonio Ocampo, Additional Commerce Secretary Md Abdur Rahim Khan told The Daily Star.

Khan also said the UNCDP wanted to know the reasons why Bangladesh is seeking an extension of the transition period for LDC graduation.

Bangladesh mainly cited the country’s gap in preparedness, lower implementation of core reforms, and the fallout of the US-Israel war on Iran as the main reasons for the requested extension, the additional secretary said.

Apart from these three main reasons, Bangladesh also mentioned vulnerabilities in the financial sector, weaknesses in the banking system, an export slowdown due to volatile global supply chains, high interest rates, and an uncertain business and investment climate in support of the extension, he said.

Bangladesh is scheduled to graduate from LDC status on November 24 this year, but it has sought to delay the transition until 2029, citing domestic and external economic pressures.

The UNCDP will prepare a report on Bangladesh’s hearing and submit its recommendations to the United Nations Economic and Social Council (ECOSOC) in June.

The ECOSOC will then forward its assessment to the United Nations General Assembly (UNGA), scheduled to meet in September, where a vote will finalise the decision on the deferment.

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

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

The business community of the country has also been requesting both the incumbent government and the immediate past interim government to delay the LDC graduation, as they need more time to prepare adequately. They said higher bank interest rates and political transition in the country, following massive unrest and political upheaval, have also affected the economy significantly.

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

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

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

Rising import costs for fossil fuels have created operational constraints, with gas shortages worsening due to the Middle East conflict, the report said.

Economic growth slowed from 7.1 percent in FY22 to 3.5 percent in FY25, weakening momentum ahead of graduation.

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

A recent UN Trade and Development assessment estimated that Bangladesh could lose more than $17.5 billion in annual exports after graduation.

Rice supply is expected to fall this year as farmers cut planting acreage across Asia because of fertiliser shortages and soaring fuel costs ​from the Iran war, with an emerging El Nino also set to squeeze output of the world’s most consumed staple.

Rice is central to global food security, ‌and even modest supply disruptions can ripple through countries, lifting prices and straining household budgets, particularly among price-sensitive consumers in Asia and Africa. The UN Food and Agriculture Organization in April forecast rice output would expand by 2 percent to a record high in 2025/26.

The effects of the Iran war are impacting farmers in top exporters Thailand and Vietnam as well as the import-reliant Philippines and Indonesia, growers and traders said. The war has cut fuel and fertiliser ​flows through the Strait of Hormuz, a key chokepoint that connects the Gulf to global markets.

Rice is central to global food security, ‌and even modest supply disruptions can ripple through countries, lifting prices and straining household budgets, particularly among price-sensitive consumers in Asia and Africa
Southeast Asia’s mainly smallholder farmers also face mounting stress as the El Nino ​weather phenomenon is set to usher in hotter, drier conditions for the region in the second half of the year.

“Farmers have already started planting rice in some countries and are using fewer inputs because prices have gone up,” said Maximo Torero, chief economist at the UN FAO. “We are going to see a tighter global supply situation ​in the second half of the year and early next year.”

In 2008, export curbs by key suppliers more than doubled prices to about $1,000 a metric ton , triggering unrest in several countries. More recently, ​supply tightness in 2022 to 2023, exacerbated by India’s export restrictions, lifted prices and prompted panic buying.

SUPPLY-CHAIN DISRUPTION

Rice shipments are already facing supply-chain bottlenecks.

“Logistics have become a nightmare, especially in Asia as there is shortage of polypropylene bags, limited truck availability to move rice to ports and shipping itself has been disrupted,” said a Singapore-based trader at a top global rice merchant, who asked to remain unidentified as they are not authorized to speak ​to media.

While fertiliser shortages and dryness are already curbing yields of smaller crops being harvested in Southeast Asia, the next crop will likely face a bigger reduction.

India, Thailand and the Philippines plant ​their main crops in June and July, while Vietnam and Indonesia are now sowing their second-season crops.

Most Asian producers grow two or three rice crops a year.

FARMERS CUT PLANTING

Sripai Kaew-Eam, a 60-year-old farmer in Thailand’s ‌Chai Nat province about 151 km (94 miles) north of Bangkok, said high fertiliser and fuel prices have pushed production costs to about 6,000 baht ($183.99) per rai (0.4 acre), from around 4,500 to 5,000 baht for the previous crop, while the price she receives for the unhusked rice she harvests is about 6,200 baht per metric ton.

Fertiliser prices have risen to 1,000 to 1,200 baht per bag, from 850 baht, forcing her to cut her use by half.

“Fertiliser prices are high, fuel prices are high,” she said.

The Philippines, the world’s biggest rice importer, faces a similar situation.

“Some farmers are now saying they may ​not plant or will reduce fertiliser use, which ​would inevitably cut production,” said Arze Glipo, executive director of the Integrated Rural Development Foundation.

The country’s output could fall by as much as 6 million tons from its typical 19 million to 20 million.

“That would leave the Philippines in a precarious position, as imports are also uncertain due to export restrictions, making it extremely difficult to ​cover any production shortfall,” Glipo said. In Indonesia, fertiliser supply is not a constraint but the El Nino is expected to curb output.

Indonesia’s statistics ​bureau estimates the rice harvest area in the March to May period will shrink by 10.6 percent to 3.85 million hectares (9.5 million acres), while unhusked rice production will drop 11.12 percent to 20.68 million tons.

Despite the supply worries, the world has ample rice inventories following years of bumper output, with India, the world’s biggest exporter, holding a record 42 million tons or about one-fifth of global stockpiles, according to US Department of Agriculture data, cushioning any drop in ​global production.

Most rice grade prices are currently steady but will likely rise even if the Hormuz situation were resolved ​immediately, the FAO’s Torero said.

Opening the strait soon would avoid a major supply issue but “if we don’t reopen this in the next two to three weeks, the situation is going to get pretty serious,” he said.

More than half of the country’s scheduled banks will not be able to pay dividends this year, as rising bad loans and provisioning shortfalls continue to erode their financial strength.

This follows a dividend payout policy introduced by the Bangladesh Bank (BB) in March last year, which has tightened eligibility rules for profit distribution.

Under the policy, banks using provisioning deferrals are not allowed to issue dividends from 2024. From 2025 onwards, commercial lenders with non-performing loans (NPLs) above 10 percent of their total loan portfolio are also disqualified, regardless of profitability.

As of December last year, 29 banks, both state-owned and private, had double-digit NPL ratios. This accounts for nearly half of all scheduled banks. Of them, 17 listed lenders will be unable to pay dividends this year solely due to high defaulted loans.

Banks are required to finalise their balance sheets by April 30 under regulatory rules, and many have already announced dividend plans.

However, the central bank has withheld approval for more than 20 banks due to high levels of bad loans and the use of deferral facilities to meet provisioning requirements.

Some lenders even met the BB governor seeking approval, but failed to secure permission.

All state-owned banks are ineligible to pay dividends because of their high bad loan ratios. These include Krishi Bank, Agrani Bank, Janata Bank, Sonali Bank, Rupali Bank, Rajshahi Krishi Unnayan Bank, Probashi Kallyan Bank, BASIC Bank and Bangladesh Development Bank.

A large number of private commercial banks have also failed to qualify.

These include AB Bank, Modhumoti Bank, NRBC Bank, Al-Arafah Islami Bank, Standard Bank, One Bank, IFIC Bank, Islami Bank Bangladesh, ICB Islamic Bank, NRB Bank, Mercantile Bank, Global Islami Bank, EXIM Bank, First Security Islami Bank, Social Islami Bank, Union Bank, SBAC Bank, Padma Bank, United Commercial Bank, Shimanto Bank, National Bank, Premier Bank, Meghna Bank, Bangladesh Commerce Bank and Citizens Bank.

They have been disqualified due to elevated bad loans and reliance on provisioning deferral facilities. Some of these banks are still seeking approval to declare at least stock dividends and are continuing discussions with the central bank.

Tarek Reaz Khan, managing director and chief executive of NRB Bank PLC, said the bank will not be able to declare a dividend this year due to the BB policy.

“We are reducing our provisioning shortfall, and other financial indicators of the bank are improving,” he added.

Sharif Zahir, chairman of United Commercial Bank (UCB), said the bank’s financial position is improving.

“We submitted a three-year plan to the central bank and are working in line with it. However, we are still unable to pay dividends this year,” he said.

Md Touhidul Alam Khan, managing director of NRBC Bank, said the lender has improved across several indicators, including governance, but is unable to pay dividends due to the use of provisioning deferral facilities.

As per the BB rules, a bank may only pay cash dividends from the net profit of the relevant financial year and cannot use accumulated profits. Even then, payouts are capped at 30 percent of paid-up capital or 50 percent of net profit, whichever is lower.

Despite the restrictions, a small group of listed banks have declared dividends.

These include City Bank, BRAC Bank, Pubali Bank, Dhaka Bank, Uttara Bank, Eastern Bank, Prime Bank, NCC Bank, Dutch-Bangla Bank, Mutual Trust Bank, Bank Asia, Jamuna Bank, Shahjalal Islami Bank, Southeast Bank, Trust Bank and Midland Bank.

Outside of the listed category, Community Bank and Bengal Commercial Bank have declared dividends.

US President Donald Trump’s war with Iran was always unpopular at home. What made it tenable is that the American economy, buoyed by oil exports and an artificial-intelligence boom, ​seemed almost recession-proof. With the Strait of Hormuz still disrupted, however, even the world’s largest economy needs to reckon with ‌the possibility of a downturn.

Until recently, economic forecasts were relatively benign, especially for the United States. When the International Monetary Fund (IMF) updated its global projections earlier this month, its so-called baseline scenario still had world output expanding 3.1 percent this year. Only under its “severe scenario,” which assumed crude prices averaging $110 per barrel in 2026 and $125 in 2027, ​did the IMF foresee global growth falling below 2 percent, a pace consistent with outright contractions in many countries.

That hypothetical future no longer ​feels far-fetched. The key Brent crude oil price has traded persistently above $110 per barrel over the past week, even briefly surpassing $120 on Thursday.

On Thursday, official data showed a rebound in US GDP in the first quarter: output expanded at an annual 2 percent. ​This is far above growth rates in the euro zone and the United Kingdom. American unemployment, at 4.3 percent, remains low.

Consider the 1990 Gulf War, though. ​The US economy enjoyed solid growth and near-full employment at the time. But labour demand was softening and households were starting to get worried amid the savings and loan crisis. When oil prices surged 150 percent, consumer confidence collapsed and real-terms spending stalled. The Federal Reserve, constrained by rising inflation, was slow to ease policy.

Many ​of those conditions are echoed today, including a divided Fed likely to resist pressure from its new chair to cut rates. Surveys already show depressed ​consumer sentiment and higher inflation expectations.

Comparing oil shocks across decades is complicated by the fact that richer households now spend a smaller share of income on energy. In ‌recent years, energy goods and services have accounted for less than 4 percent of US disposable income, compared with about 5 percent before the Gulf War and 6 percent ahead of the 1970s crises.

One way to bridge that gap is to examine how much households are forced to raise that share when energy prices jump. One rule of thumb is that a 1 percent increase in American WTI oil prices typically lifts energy spending by roughly 0.22 percent. After July ​1990, the energy share of household ​incomes rose by about 0.3 percentage points, enough to tip the economy into recession, since higher energy bills forced consumers to cut spending elsewhere.

A shock of a similar size would emerge today if crude prices stayed where they are. And if oil ​hits $150 per barrel, the increase in the energy share would be 0.7 percentage points of disposable income. ​With oil at $200 per barrel, it would rise by a full percentage point. That would still be milder than the 1970s, but enough to hurt badly. Though far from certain, every new day makes a US recession look less outlandish.

US President Donald Trump will receive a briefing on April 30 regarding plans ​for new military operations in Iran, according to a report by Axios. It triggered ​renewed fears among traders of a monthslong standoff in the Middle East, sending oil prices up.

As of 1145 GMT on April 30, Brent crude and US WTI futures were trading ​at $114 per barrel and $104 per barrel respectively.

President Donald Trump said Friday that he will hike US tariffs on cars and trucks from the European Union next week, charging that the bloc is not complying with an earlier trade deal.

The pact, which was struck last summer, had capped the US tariff on EU autos and parts at 15 percent, which is lower than the 25-percent duty that Trump imposed on many other trading partners.

These sector-specific duties were not affected by a Supreme Court ruling earlier in the year that struck down a swath of Trump's global levies.

But the US leader said Friday: "Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States."

"The Tariff will be increased to 25%," he wrote on his Truth Social platform.

He told a Florida event later Friday that Washington had informed Germany of his threat because "they and other European nations have not adhered to our trade deal."

He accused German automakers like Mercedes-Benz and BMW of ripping off Americans.

Trump's announcement came a day after his renewed criticism of German Chancellor Friedrich Merz. Trump told Merz to focus on ending the Ukraine war instead of "interfering" on Iran.

Germany would likely be hit hard by a sharp vehicle tariff, as it is responsible for a significant amount of EU auto exports.

Reacting to the announcement, a European Commission spokesperson told AFP: "Should the US take measures inconsistent with the joint statement, we will keep our options open to protect EU interests."

The spokesperson added that the bloc is implementing its commitments "in line with standard legislative practice" and keeping the Trump administration updated during this process.

Last July, the EU had laid the groundwork for possible retaliation if talks with Washington fell through -- preparing a list of US goods that could be targeted.

- 'Light a fire' -

"President Trump has clearly lost patience with EU efforts to implement its commitments under the bilateral trade deal concluded months ago," former US trade official Wendy Cutler told AFP.

She said Trump appeared to be "hoping to light a fire under Brussels to accelerate its domestic procedures."

His threats to the EU are reminiscent of a similar move against South Korea months ago, added Cutler, who is now senior vice president at the Asia Society Policy Institute.

In late March, EU lawmakers gave their green light to the bloc's tariff deal with Trump, but with conditions.

A large majority of EU lawmakers agreed to cut EU tariffs on some US imports, as a first step towards implementing the 2025 deal, but they also sought additional safeguards.

Although the European Parliament has given its conditional approval to the EU-US trade pact, before the deal is implemented by the bloc, it still needs to be negotiated with EU states.

The new threat on European cars "explain why many small businesses expect to be cautious" with Trump's tariffs, said Dan Anthony, who heads "We Pay the Tariffs," a coalition of nearly 1,200 small businesses.

"You never know what might trigger the next tariff threat," Anthony added in a statement.

In April, EU trade chief Maros Sefcovic was in Washington to meet with counterparts including US Commerce Secretary Howard Lutnick and trade envoy Jamieson Greer.

At the time, he said the EU was also seeking more progress in easing the effects of still-steep US steel tariffs, adding that talks were going in a positive direction.

The United States is the second largest market for new EU vehicle exports, after the United Kingdom, according to a 2025 fact sheet by the European Automobile Manufacturers' Association.

Over a fifth of EU vehicle exports went to the United States.

Germany alone exported some 450,000 vehicles to the United States in 2024, according to the VDA industry group. But that figure has since slipped.

The government has selected two Chinese companies to drill three wells at different locations across the country at a cost of Tk 945 crore.

The Cabinet Committee on Government Purchase approved the firms for key energy exploration projects at its 19th meeting, held yesterday and chaired by Finance Minister Amir Khosru Mahmud Chowdhury. The projects aim to strengthen the country’s gas and oil reserves.

Under a BAPEX project, two exploratory wells -- Srikail Deep-1 and Mobarakpur Deep-1 -- will be drilled as part of a three-well programme. The contract for these two wells was awarded to CNPC Chuanqing Drilling Engineering Company Limited at a cost of Tk 713 crore.

The committee also approved the drilling of the Sylhet-12 oil well under a separate project. The contract was awarded to Sinopec International Petroleum Service Corporation (SIPSC) at a cost of Tk 232 crore, covering drilling and related works.

Foreign financing received by Bangladesh fell 19 percent year-on-year in the July-March period of fiscal year 2025-26 (FY26), mainly due to the slow implementation of foreign-funded development projects.

The government received $3.89 billion in foreign loans during the nine months of FY26, down from $4.80 billion in the same period of the previous fiscal year, according to provisional data from the External Resources Division (ERD) published yesterday.

Data from the Implementation Monitoring and Evaluation Division under the Ministry of Planning showed that implementation of the foreign-funded Annual Development Programme (ADP) stood at 34.56 percent in July-March this year, slightly lower than 35.8 percent in the same period last year.

Of the loans received by Bangladesh, Russia disbursed $828 million, according to ERD data.

However, debt servicing rose to $3.52 billion during July-March, up 9 percent from $3.21 billion a year earlier. Interest payments accounted for $1.24 billion of the total repayment.

ERD data also showed that commitments from both multilateral and bilateral lenders declined during the period.

Total commitments in July-March FY26 stood at $2.80 billion, down 6.6 percent year-on-year. All commitments during this period were in the form of project assistance.

Gold rose on Thursday on ‌dip-buying, but was on track for a second straight monthly fall as elevated oil prices kept fears of inflation and higher-for-longer interest rates alive.

Spot gold was up 1 percent at $4,588.09 per ounce, as of ​0736 GMT, after falling to its lowest point since March 31 in ​the last session. Bullion was down about 1.7 percent so far this month.

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US gold futures for June delivery rose 0.4 percent to $4,578.10.

“Gold has struggled again this month ​as oil strength has dominated the narrative. Rising crude pushes up inflation expectations and interest ​rate forecasts, which in turn caps gold’s appeal,” said Tim Waterer, chief market analyst at KCM Trade.

However, “a combination of bargain-hunting and expectations that a peaceful resolution to the (US-Iran) conflict will be found at ​some point are providing something of a floor for gold,” he said.

Brent crude ​rose above $124 a barrel on a report that the US was considering potential military action against Iran to ‌break ⁠the deadlock in negotiations to end the war, increasing concerns about more supply disruptions to already curtailed Middle East exports.

The Federal Reserve held interest rates steady on Wednesday, but in its most divided decision since 1992 noted rising concerns about inflation in a policy ​statement that drew ​three dissents from officials ⁠who no longer feel the US central bank should communicate a bias towards lowering borrowing costs.

Traders are now pricing in no ​Fed rate cuts this year, with markets seeing a 30 percent chance ​of a ⁠hike by March 2027, sharply up from roughly 5 percent a day prior.

While gold is traditionally seen as a hedge against inflation, high interest rates weigh on its appeal as ⁠a non-yielding ​asset.

Bangladesh's readymade garment sector in Chattogram is facing mounting pressure as prolonged load shedding and rising fuel costs disrupt production, with factory owners claiming a sharp increase in expenses and growing risks to export orders.

Although the Bangladesh Power Development Board claims that the Chattogram region is currently facing a daily load shedding of around 100MW, in reality, the situation is more difficult, according to garment owners.

At Meher Garments on Sagarika Road in the port city, where around 3,000 workers are employed, a typical workday has become a stop-start struggle, according to the authorities.

On 29 April, production at the factory started at 8am but stopped within 10 minutes due to a power outage. It took another 10 minutes to restart using generators. Power came back at 9:40am, but went out again at 11am. Electricity was restored an hour later.

After the lunch break, power went out again at 4:35pm and did not return until 5:25pm. In an eight-hour shift, the factory remained without electricity for roughly three and a half hours, while repeated switching between grid power and generators caused an additional 30 minutes of disruption.

"During summer, we used to face around two hours of load shedding daily, which required about Tk19,000 worth of diesel to keep the factory running," said Khondaker Belayet Hossain, director of the factory and a leader of the Bangladesh Garment Manufacturers and Exporters Association.

"Now, with three to four hours of outages and a 15% rise in diesel prices, our daily fuel cost has climbed to around Tk40,000," he said.

He added that prolonged generator use causes voltage fluctuations, damaging costly machinery and shortening equipment lifespan. "All of this is pushing up production costs, which were not factored in when orders were placed three months ago."

Industry insiders say the situation is not unique to a single factory. Most RMG factories in Chattogram are experiencing three to four hours of load shedding within an eight-hour workday, compounded by fuel shortages and higher operational costs.

As a result, production expenses have surged by about 20%, timely exports are being disrupted, and manufacturers fear losing orders to competing countries.

According to the industry data, 348 out of 699 RMG factories in Chattogram are currently operational. Unreliable electricity and fuel supply have reduced output, placing additional strain on the export-oriented industry.

BGMEA leaders say frequent power disruptions and gas shortages are disrupting production deadlines. This has delayed shipments, forcing some exporters to rely on air freight – significantly increasing costs.

Failure to meet delivery schedules risks eroding buyer confidence, which could affect future orders, they warned.

Former BGMEA vice-president Rakibul Alam Chowdhury said factories are increasingly dependent on alternative fuel sources due to load shedding, driving up production costs.

"Over the past two months, rising freight charges, higher container handling costs at inland container depots, and increased transport fares have pushed overall production costs up by more than 20%," he said.

"As manufacturers seek higher prices from buyers, many foreign clients are cutting back on new orders or shifting to competitor countries," he said.

SM Abu Tayyab, BGMEA director and president of the Chattogram chapter of the International Business Forum of Bangladesh, warned that the prolonged crisis could severely impact the export earnings.

"If the situation continues, small and medium-sized factories may be forced to shut down, leaving hundreds of thousands of workers unemployed," he said.

He stressed the need for urgent steps to resolve load shedding and gas shortages and to ensure energy security, cautioning that failure to act could put Bangladesh's key export sector at serious risk.

When contacted, Fahmida Begum, the executive engineer of the Power Development Board in Chattogram, said, "After the rain, the electricity demand has decreased leaving no requirement for load shedding. But, still there may be power outages due to a fault in the transmission line during thunderstorms and heavy rain."

Bangladesh's economy risks falling into an "energy trap" due to rising global fuel prices, dollar shortages and pressure from import dependence, speakers warned.

The concerns were raised today (2 May) at a webinar titled "Today's Agenda: Economy Trapped in the Energy Crisis?" organised by Power and Participation Research Center (PPRC).

Speakers said the crisis had intensified because of supply constraints, demand-driven reactions and communication gaps. Some early disruptions quickly turned into panic buying, causing a sudden spike in fuel demand. Although rationing and other measures were introduced, uncertainty made the situation more complex. Participants also discussed energy security during future emergencies.

Former energy secretary AKM Zafar Ullah Khan said long-standing planning weaknesses in the energy sector were now becoming clear. Aligning with global markets had further exposed domestic vulnerabilities.

He said questions were being raised about how much fuel Bangladesh could store and for how long. Fuel prices would eventually have to be adjusted in line with international markets, but uninterrupted supply remained the key priority. He added that the country did not have enough storage capacity to handle large fluctuations in incoming or outgoing oil supplies.

Former Bangladesh Agricultural University vice-chancellor A Sattar Mondal said, "Agriculture was becoming increasingly machine-dependent, raising fuel demand. Ensuring steady fuel supply has become essential for maintaining production at the field level."

He said muscle power in farming had largely been replaced by machine power. "Around 4.2 million diesel engines are used across the agricultural sector, not only for irrigation but also in many other activities," he said.

Sattar expected both machinery use and diesel demand to rise further.

Syed Mahmudul Haque, chairman of Trade Services International, said fluctuations in global fuel prices were directly increasing Bangladesh's import costs, putting pressure on foreign currency reserves and the wider economy.

He said every $5 rise per barrel in the international market significantly increased Bangladesh's import bill. He urged the country to consider alternatives, including diversifying sources of supply instead of relying mainly on the Middle East.

Anwar-ul Alam Parvez, chairman of the Bangladesh Chamber of Industries, said changing geopolitical conditions were making fuel supplies more uncertain, requiring coordinated and diversified planning.

"Bangladesh needed short-, medium- and long-term policies to secure the energy sector. Immediate steps should include operating coal-based plants according to capacity, maintaining domestic capability with imports from Adani Group and India, and prioritising gas supplies for fertiliser and productive industries," he said.

Mohammad Nazmul Haque, president of the Bangladesh Petrol Pump Owners Association, stressed the need to expand renewable energy and accelerate domestic gas exploration to reduce import dependence.

"Renewable resources must now be utilised, while more emphasis should be placed on drilling gas wells," he said, adding, "140 wells had been initiated since the current government took office."

Speakers also said that although supply conditions had not improved significantly, stronger demand management and monitoring had helped stabilise the situation gradually. However, uneven distribution at fuel stations and excessive media focus on local shortages had increased public anxiety.

Concluding the discussion, Hossain Zillur Rahman said the fuel crisis had exposed gaps in both immediate response and medium-term planning. Without coordinated policy and effective implementation, such crises could deepen and recur.

He also said accurate information flow during crises was essential, warning that false or exaggerated messaging could further destabilise the situation.

Although the introduction of family and farmers’ cards may bring some relief, excessive reliance on bank borrowing to finance the budget deficit is harmful to the economy, said Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD).

She made the remarks yesterday at a shadow parliament debate programme organised by Debate for Democracy at the Bangladesh Film Development Corporation (FDC) in Dhaka.

Fahmida said government social safety net initiatives, such as the family and farmers’ card, are promising, but their success depends on transparency and accountability in selecting and managing beneficiaries.

She added that past social protection schemes have often suffered from irregularities and corruption.

Fahmida also said subsidies must be properly targeted, with priority given to agriculture, irrigation, and public transport.

She stressed that the next budget should set clear policy directions-- given limited resource mobilisation, and ensure cost-efficiency.

Fahmida further said that the government depends heavily on borrowing from the banking sector, including the central bank, to cover budget deficits, which she described as harmful.

She argued that greater emphasis should instead be placed on external financing sources.

She also suggested temporarily waiving VAT on imported goods amid global volatility to reduce pressure on consumers. Such a step during Ramadan in the past helped lower prices in local markets, she said, although weak market management could limit its full impact.

Hassan Ahamed Chowdhury Kiron, chairman of Debate for Democracy, said the country’s economy is going through a difficult period due to multiple global and domestic challenges.

He said the current government has taken office at a time when the country is suffering from years of crisis-- the Covid-19 pandemic, the Russia-Ukraine war, economic damage from previous administrations, conflicts in the Middle East, energy shortages, rising inflation, low investment, limited job opportunities, high levels of loan defaults, and pressure from foreign debt.

He added that the US-Israel war on Iran has further worsened the global economic situation.

Rising global commodity prices and higher fuel costs due to Middle East tensions have increased the cost of living in the country, Kiron said in a statement after the programme.

He stressed that in a global recessionary situation, political unity is needed to maintain a tolerable standard of living without putting extra pressure on the government.

He also said both the government and the opposition must act responsibly, learn from past experiences, and avoid undermining each other, while a strong mandate holder should ensure public support by maintaining people’s comfort.

Kiron suggested temporarily reducing VAT and taxes on essential goods and expanding the affordable food supply through open market sales and the Trading Corporation of Bangladesh.

He also called for stronger social safety nets and more programmes like the family and farmers’ card to protect low- and middle-income groups.

Finally, he said the budget should be people-friendly, business-friendly, cautious, sustainable, balanced, and implementable, without putting pressure on lower-middle-income groups, while also helping stabilise prices and support investment and job creation.

In the shadow parliament debate titled “Rising cost of living is driven not by fuel price hikes but by global conditions,” debaters from Kabi Nazrul Government College defeated Dhaka College to win the competition.

The government will provide all promising export sectors with the same facilities currently available to the readymade garment (RMG) industry, Finance Minister Amir Khosru Mahmud Chowdhury said yesterday at a meeting with business leaders.

“If any promising export sector comes to us with a proposal, we will extend to that sector the same facilities that are available to the garment industry,” he said at the pre-budget meeting organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the revenue board at the Pan Pacific Sonargaon.

Bonded warehouse facilities, back-to-back arrangements, and all other relevant support will be provided, he added, citing the gold and diamond sectors as examples of industries held back by the absence of such support.

Goldsmiths, he noted, were leaving the country for a lack of opportunities.

Bonded warehouse facilities allow export-oriented industries to import raw materials duty-free, on the condition that finished goods are not sold domestically. Currently, only the RMG sector enjoys the facility in full; the leather goods sector receives it partially.

The National Board of Revenue (NBR) had long resisted broader extension, citing fears of duty-free materials being diverted to the local market, despite calls from economists to extend the facilities across the board.

The minister acknowledged those concerns but said they could not justify inaction. “It cannot be the case that we do nothing out of fear of theft,” he said, adding that preventing misuse is a separate issue, and solutions will be addressed accordingly.

On taxation, he said the government could not offer broad incentives at present but would work to lower the cost of doing business.

“Wherever you are facing obstacles, let us know, and we will remove them. Tell us where your costs are increasing, and we will directly address those issues within the next three months,” he told businessmen at the meeting.

This is already part of the ruling BNP’s manifesto, but businesses’ input will make it more effective, he noted, adding that while removing all obstacles might not be possible, the government will eliminate most of them. “Give us some time. If we fail, we will take responsibility.”

Stating that many have spoken about expanding the tax net, the minister requested business associations to assist in bringing those who are still outside the tax net into the system.

Painting a difficult economic picture, Khosru said the new government has inherited a damaged banking sector, weakened stock market and over Tk 40,000 crore in unpaid energy bills.

In addition, due to the ongoing conflict in the Middle East, the government is facing an additional energy cost of around $4 billion, he added.

“We are navigating through these challenges across all sectors, but the government does not have unlimited resources… It will take some time for the situation to improve,” the minister said, adding that the government and businesses need to work together to overcome this.

Noting that businesses are also experiencing a serious capital shortage, he said due to currency depreciation, many have seen about 40 percent of their capital wiped out. On top of this, a 13–14 percent inflation rate has further eroded value. “Altogether, nearly 50 percent of capital has been eroded.”

Describing the economy currently in a “low-level equilibrium”, Khosru said generating growth is necessary to move it upward and attract investment. “If poverty, which has risen significantly, is not reduced through higher expenditure, demand will not be generated.”

On the high borrowing costs, he said in the past, monetary supply was tightened to control inflation, but its effectiveness is uncertain.

With interest rates at 15 percent, he said the government would increase the development budget to stimulate growth, but cautioned that investment quality, not volume, was the priority. “If funds are misused or siphoned abroad in the name of mega projects, then a large budget serves no purpose.”

He projected a two-year adjustment period before the economy stabilises. “By the third year, the economy will turn around.”

Khandakar Abdul Muktadir, minister of commerce, industries, textiles and jute, said energy shortages and high borrowing costs had left many industrial sectors fragile, and that resolving those two issues was a prerequisite to new investment.

On reducing the cost of doing business, he said alongside providing targeted relief to the private sector, proposals will be made considering how to strengthen the national exchequer.

He also called for the jewellery sector to be brought fully into the formal economy, arguing that Bangladesh had a skilled workforce but lacked laboratories, design infrastructure, and supportive policy.

“If neighbouring countries can export several billion dollars’ worth of gold annually, why can’t we? We have the technical knowledge and skills. What we need are better laboratories, design facilities, and a supportive government policy,” he added.

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry, said the effective tax rate for many businesses reached 40-50 percent when advance and source taxes were factored in.

He called for unconditional corporate tax reductions, relaxed cash transaction rules, an integrated taxpayer profile system, and online appeal hearings for income tax, VAT, and customs disputes.

The Investment Corporation of Bangladesh (ICB), which is mandated to invest in the capital market, is struggling itself to stay afloat amid an unprecedented financial crisis.

According to its audited financial statements for FY25, the state-owned non-bank financial institution incurred a record loss of Tk588 crore in the first nine months of the current fiscal year. This marks a 111% year-on-year surge in losses, driven largely by prolonged volatility in the capital market.

The report also shows that ICB's bank borrowing costs rose by more than 31%, with interest payments increasing significantly during the period, disclosed in the audited financial statements for FY25.

Investment Corporation of Bangladesh (ICB), the country's largest stock market investor, primarily earns through trading shares—generating capital gains from buying and selling equities, as well as dividend income from listed companies.

In addition, the corporation generates revenue through fees, commissions, and service charges by offering various financial services via its subsidiaries.

As of June 2025, ICB's consolidated investment in stocks stood at Tk13,508 crore at cost value. However, the market value of this portfolio declined to Tk8,256 crore, resulting in a deficit of Tk5,252 crore. This represents a loss of approximately 38.88% relative to the cost price, according to its data.

Officials attribute the decline in earnings to the prolonged volatility in the capital market over the past years. This instability was driven by political uncertainties surrounding the general election, adverse macroeconomic conditions, and continued bearish sentiment influenced by global factors, including tensions related to the US-Iran war situation.
ICB Chairman Professor Abu Ahmed told The Business Standard that the company's core operations are closely tied to the performance of the capital market, further noting that during the reporting period, the market did not perform well due to various factors, which hit the institution badly.

Capital gains—once generated from buying and selling shares—fell sharply as the institution was unable to offload stocks amid a bearish market trend. At the same time, ICB faced increased financial pressure due to higher interest payments on deposits and borrowings from banks and other institutions, which drove up overall borrowing costs, he said.

Previously, the interest rate on funds borrowed for market investments was around 7 percent, but it has now risen to 10 percent or more, significantly increasing expenses. As a result, the institution incurred substantial losses.

When asked about the way forward, the ICB chairman said a major portfolio overhaul is essential, as considerable value has already been eroded. Many shares were acquired at high prices, while their current market value has dropped sharply. In addition, high-cost borrowings must be repaid, potentially with government support.

"We are considering raising capital through the issuance of rights shares to repay borrowings. Once implemented, this plan will reduce liabilities and lower interest expenses, providing ICB with much-needed breathing space," he said.

"We are considering raising capital through a rights issue to repay borrowings. Once implemented, this plan will reduce liabilities and lower interest payments, providing ICB with some financial breathing room," he said.

Capital gains fell by 67%:

According to its quarterly financial statements, during the July–March period, ICB's capital gains fell by 67% as it was unable to sell shares due to a volatile capital market. Its capital gains stood at Tk67 crore at the end of March, significantly down from Tk201 crore.

Its dividend income, generated from payouts by listed companies, declined by 19% to Tk236 crore, compared to Tk294.84 crore during the same period of the previous fiscal year.

Income from fees, commissions, and service charges also declined significantly over the same period.

As its core income decreased while interest payments on deposits and borrowings increased, the company incurred an operational loss of Tk406.12 crore.

Interest payments surge by 31%:

Financial statements of the Investment Corporation of Bangladesh (ICB) show that it incurred Tk914.86 crore in interest expenses on deposits and borrowings during the first nine months of the current fiscal year.

In the same period of the previous fiscal year, the amount stood at Tk699 crore—marking a sharp increase of over 31%.

According to its financial disclosures, ICB's total deposits and borrowings reached Tk7,195 crore as of June 2025. Of this, Tk4,058 crore came from banks, Tk3,125 crore from other institutions, and the remainder from deposits collected from the general public.

Including deposits, borrowings, government loans, bonds, and other liabilities, ICB's total liabilities stood at Tk18,063 crore at the end of March.

Once a highly profitable state-owned investment bank, ICB reported a historic loss exceeding Tk1,000 crore for the first time in its history in FY25. The loss of Tk1,213.86 crore in fiscal year 2024–25 was driven by higher provisioning linked to poor investment decisions in several weak non-bank financial institutions (NBFIs), erosion of its investment portfolio amid a volatile capital market, and reliance on high-cost bank borrowings to finance market activities.

Although ICB had previously faced quarterly losses due to market volatility, such a significant annual loss is unprecedented, according to internal sources.

As a result of the substantial losses, the company did not declare any dividend for shareholders for FY2025.

Bangladesh's investment climate is being vitiated by a mix of bureaucratic delays, policy uncertainty and rising business costs, making it harder for both local and foreign investors to expand operations and create jobs.

Experts say unless these longstanding barriers are addressed quickly, the country risks losing competitiveness and missing major investment opportunities.

Policy Exchange Bangladesh has identified eight major obstacles, with bureaucratic complexity and a restrictive regulatory framework topping the list.

Energy shortages, infrastructure bottlenecks, high tax pressure, weak institutional coordination and the absence of a clear investment strategy were also cited as major concerns at a policy dialogue in the capital on Wednesday.

The Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh jointly organised the meeting.

Policy Exchange Bangladesh Chairman and CEO Dr M Masrur Reaz presented the keynote paper titled "Improving the Investment Climate: Why It's Critical for New Government Priorities and the Upcoming National Budget."

In his presentation, Masrur Reaz said the country also faces the absence of a coordinated domestic and foreign investment strategy, which continues to weaken investor confidence. Newspapersubscriptions

He identified additional barriers including the lack of structured investment promotion, a gap between political commitments and implementation, and weak coordination between the public and private sectors.

He also pointed to limited coordination between the Prime Minister's Office and various ministries, the absence of diversified competitive sectors, leaving the economy heavily dependent on only five key sectors, and inadequate post-investment support or aftercare services.

Against this backdrop, Policy Exchange proposed a set of immediate reforms to strengthen investor confidence.

Masrur Reaz said the government can pursue seven priority reforms. Countrypolitics overview

These include formulating a comprehensive national investment policy, simplifying business registration procedures, addressing infrastructure and energy constraints, ensuring efficient use of economic zones, developing skilled human resources, promoting green investment, and establishing a modern legal framework for contract enforcement and dispute resolution.

BGMEA President Md Mahmud Hasan Khan attended the event as special guest, while EuroCham Chairperson Nuria López, corporate lawyer Barrister Margub Kabir, and Zinnia Huq, Chief Financial Officer (CFO) of Unilever Bangladesh, participated as panel speakers.

EuroCham Chairperson Nuria López said the absence of a free trade agreement (FTA) with the European Union, Bangladesh's largest export destination, is already affecting investor confidence.

"Do we have a free trade agreement with our major customer at this moment-the European Union? No," she said, noting that countries such as Vietnam and India have already secured similar agreements.

She warned that without preferential access to the EU market, Bangladesh risks losing competitiveness to regional peers offering more predictable trade frameworks.

"We need to have, we must have, we must start right now an FTA," López said. "If we don't have free trade access to our largest market, we don't have a horizon to invest." Economicanalysis reports

She also said uncertainty over future market access is influencing investment decisions.

"I have recently started a new business in the agro-processing sector, but I am uncertain about the future. I do not know whether I will be able to export to Europe on equal terms with competitors from countries that already enjoy free market access," she said.

López stressed that predictability is essential for attracting long-term investment, adding that Bangladesh currently lacks it.

"We don't have predictability. We don't know what's going to happen in the future," she said, questioning whether there is a clear and investor-friendly policy direction.

She linked the urgency of an EU FTA to Bangladesh's broader challenge in attracting foreign direct investment (FDI), saying policy uncertainty continues to undermine investor trust.

Addressing the event as special guest, BGMEA President Md Mahmud Hasan Khan said Bangladesh should expand export markets through bilateral agreements with countries such as South Africa, Brazil and Turkey.

He noted that around US$8 billion in new opportunities have emerged in the ready-made garment sector, with further potential for expansion. Bangladeshmarket analysis

However, he stressed that high tariffs in these markets make such agreements necessary.

"We are discussing this matter with the government," he said.

He also identified energy shortages as the most critical challenge for businesses.

"For entrepreneurs, energy is a greater concern than financial constraints," he said, adding that without resolving energy and infrastructure bottlenecks, financial support would have limited impact.

Unilever Bangladesh CFO Zinnia Huq said business registration and documentation processes in Bangladesh are extremely slow and time-consuming.

She pointed to weak coordination among government agencies, which reduces efficiency and delays business operations.

Despite a double taxation avoidance treaty, she said prior approval from the National Board of Revenue (NBR) is still required for dividend remittance, making the process unnecessarily complex. She also highlighted a lack of transparency in audit procedures.

Barrister Margub Kabir said dispute resolution is central to investor confidence, but Bangladesh continues to struggle with a slow judicial system.

He cited the example of a Japanese company operating in Bangladesh for 25 years, while a contractual dispute dating back to 2018 remains unresolved.

"There is no lack of laws in Bangladesh; the issue is making them simpler and the process faster," he said.

Kabir added that foreign investors generally prefer arbitration to avoid lengthy court proceedings. However, even after arbitration awards, enforcement through courts faces similar delays.

He called for specialised commercial courts, faster enforcement mechanisms, and judges with commercial expertise to ensure timely resolution of disputes.

MCCI Secretary General Farooq Ahmed delivered the welcome address.

Bangladesh’s business climate is constrained by regulatory bottlenecks, policy inconsistency, weak trust, and institutional inefficiencies, undermining both investment potential and long-term investor confidence, analysts and top business leaders said today.

They made the remark at a dialogue on the investment climate and the upcoming national budget, organised by the Metropolitan Chamber of Commerce & Industry, Dhaka (MCCI), at its auditorium at Police Plaza in the capital.

At the event, M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said private investment has fallen, while foreign direct investment remains below 1 percent of GDP, far behind regional competitors.

“This slowdown comes at a critical juncture. With ambitions of reaching a $1 trillion economy and creating millions of jobs, the government’s targets hinge almost entirely on increased investment,” he said.

“The real challenge is not competition but market entry itself, as firms must be prepared for a decades-long commitment given operational hurdles—from licensing delays to compliance burdens—that can deter even established players,” said Zinnia Huq, chief financial officer of Unilever Bangladesh.

Bangladesh’s struggle to attract foreign direct investment (FDI) stems largely from a lack of trust and policy predictability, said Nuria Lopez, chairperson of the European Union Chamber of Commerce in Bangladesh.

She noted that despite the country’s strong potential, foreign investors remain hesitant due to an unfavourable business environment and the absence of a clear, consistent government vision.

“The root problem is that Bangladesh does not have the trust of investors,” she said, adding that policy inconsistency and regulatory uncertainty continue to undermine confidence.

Lopez pointed to growing concerns over Bangladesh’s future market access, particularly in the European Union, as the country approaches graduation from least developed country (LDC) status.

Unlike regional competitors such as Vietnam and India, Bangladesh has yet to secure effective free trade agreements, leaving investors unsure about long-term export prospects, she said.

Taxation is another major concern, she said, noting that compliant firms—especially multinationals—often bear a disproportionate burden, while others remain outside the tax net.

“This creates an uneven playing field and discourages new investment,” she added.

Barrister Margub Kabir of Margub Kabir and Associates emphasised that trust—central to any investment decision—rests heavily on how disputes are resolved.

“Bangladesh’s persistent weakness in contract enforcement, once ranked among the lowest globally, reflects a slow and overburdened judicial system,” he said.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said efforts to improve the business environment must begin with fixing core infrastructure.

Farooq Ahmed, secretary general of the MCCI; Sumitra Kumar Mutsuddi, head of corporate at BSRM; and Sumaiya T Ahmed, head of sustainability at Pran-RFL Group, also addressed the event, among others.