Bangladesh Jewellers Association (Bajus) has reduced gold prices in the domestic market, cutting the price of 22-carat gold by Tk3,266 per bhori to Tk2,28,031.

The new prices took effect from 10am today (13 October). Bajus said the adjustment followed a fall in the price of pure (tejabi) gold in the local market.

The decision was taken at a meeting of the association's Standing Committee on Pricing and Price Monitoring.

Under the revised rates, 21-carat gold will sell at Tk2,17,767 per bhori, down Tk3,149. The price of 18-carat gold has been cut by Tk2,683 to Tk1,87,032, while gold of the traditional method will cost Tk1,52,798 per bhori, down Tk2,158.

Bajus last raised gold prices on 9 October, when the price of 22-carat gold went up by Tk2,216 to Tk2,31,297 per bhori. The latest reduction comes just four days later.

In that earlier adjustment, 21-carat gold was priced at Tk2,20,916 per bhori, 18-carat at Tk189,715, and traditional-method gold at Tk1,54,956.

Bajus has also lowered silver ornament prices. A bhori of 22-carat silver will now cost Tk4,199, down Tk117.

The price of 21-carat silver has been cut by Tk175 to Tk4,966 per bhori, and 18-carat silver by Tk117 to Tk3,441. Silver of the traditional method is now Tk2,624 per bhori, down Tk59.

Lub-rref (Bangladesh) PLC has received regulatory approval to use its unutilised initial public offering (IPO) proceeds to meet working capital needs as the listed lubricant manufacturer grapples with mounting losses, a liquidity crunch and production constraints.

The Bangladesh Securities and Exchange Commission (BSEC) approved the proposal last week, a commission official told The Business Standard on condition of anonymity. The company must return the funds to its IPO account within one year.

The approval allows Lub-rref to redirect around Tk20 crore, originally earmarked for machinery purchases, project expansion and loan repayment, to settle outstanding liabilities and support day-to-day operations.

The company's financial position remains under pressure. It incurred a net loss of Tk32.27 crore in the July-March period of FY26, with a loss per share of Tk2.22 against revenue of Tk27.11 crore.

Its shares closed at Tk12.40 on the Dhaka Stock Exchange today (13 October).

The approval could offer temporary relief by easing immediate cash-flow pressures. However, persistent losses and previous production constraints raise questions about whether the funds will be enough to restore normal operations and improve financial performance.

IPO funds remain idle after promised loan fails to materialise

Lub-rref raised Tk150 crore through an IPO in 2021. A portion of the proceeds remained unused after the company failed to secure a syndicated loan promised by Social Islami Bank PLC for the balancing, modernisation, rehabilitation and expansion (BMRE) of its project.

The unused funds are currently held in a short notice deposit (SND) account at the bank's Agrabad branch in Chattogram, generating only nominal returns, according to the company.

Lub-rref attributed the erosion of its working capital to the Covid-19 pandemic, the Russia-Ukraine war and political instability in Bangladesh in 2024. It said these disruptions weakened its financial capacity, making it difficult to sustain operations and meet financial obligations.

Under the revised utilisation plan, the company will use $364,811 of the proceeds to settle outstanding liabilities against letters of credit (LCs), equivalent to approximately Tk4.56 crore at an exchange rate of Tk125 per dollar.

Another Tk4.33 crore will be used as a down payment to reschedule long- and short-term loans under Bangladesh Bank's Banking Regulation and Policy Department (BRPD) Circular No 7. The remaining funds will be available for working capital after these payments.

The company's board approved the revised plan at its 187th meeting on 9 June, and the proposal was subsequently placed before shareholders at an extraordinary general meeting on 9 July.

According to the company's disclosures, 51% of shareholders, excluding sponsors and directors, approved the proposal.

The company said the initiative was taken in the interests of general shareholders, while the BSEC also considered the interests of ordinary investors in reaching its decision.

Production constraints and mounting losses

Lub-rref manufactures and refines lubricants under its BNO brand. Its expansion plans at Julda, beside the Karnaphuli River, included a base oil refinery, tank terminal, jetty, hydrogen plant and specialised bitumen plant.

However, dollar shortages, difficulties importing raw materials, global economic disruptions and delays in bank loan disbursements put pressure on project implementation and production.

In May 2024, the company sought permission to use Tk56 crore of its then-unutilised IPO proceeds as working capital. At the time, its chief financial officer said the company was operating at just 30%–40% of its normal production capacity.

Its financial performance subsequently deteriorated, with losses reaching Tk66 crore in FY2024-25. The latest nine-month loss indicates that the company continues to struggle to revive operations and recover revenue.

Kabir Hossain, company secretary of Lub-rref, did not respond to requests for comment on the company's current business and financial conditions.

The latest approval may help the company settle overdue liabilities, secure working capital and meet immediate financial obligations. However, it does not resolve the underlying challenges of restoring production, boosting revenue and returning to profitability.

Lub-rref must also replenish the IPO account within one year, making the effective use of the funds crucial. Its ability to revive operations and generate sufficient cash flow will be key to meeting this obligation while addressing its ongoing financial difficulties.

Bangladesh is heading for a possible 16-year high in inflation, with the International Monetary Fund (IMF) today (13 October) projecting it to reach 10.9% in the current FY27 fiscal year, a sharp reversal from the 6% forecast it made just six months ago.

Bangladesh last recorded a similar annual average in FY2010-11, when inflation reached 10.92%, according to Bangladesh Bureau of Statistics (BBS) data.

More recently, inflation surged amid global price pressures following Russia's invasion of Ukraine, with the annual average reaching 10.03% in FY25.

Inflation subsequently moderated, with average headline inflation falling to 8.7% in FY26, but remained high.

The easing continued into the new fiscal year, with monthly inflation slipping from 8.32% in July to 8.26% in August before rising again to 8.34% in September, BBS data show.

The IMF's latest World Economic Outlook, released today, said, "Global inflation is expected to pause its steady decline, primarily because of the war-induced negative supply shock."

Global headline inflation is projected to rise notably to 4.7% in 2026 from 4.1% last year and will ease to 4.1% in 2027.

"Energy-importing economies outside the technology value chain face the most difficult outlook," it added in its outlook released as global economic and finance leaders gather in Bangkok for the IMF and World Bank annual meetings.

Against this backdrop, the IMF's 10.9% projection for Bangladesh is higher than forecasts issued by other international lenders.

In its September Asian Development Outlook, the Asian Development Bank (ADB) raised its forecast for 12-month average inflation in FY27 to 9%, from 8.8% projected in July.

The ADB attributed the expected increase to the lagged effects of a stronger El Niño event, persistent supply-side price pressures from energy shortages, higher production and transport costs, as well as possible shipping disruptions.

A gradual shift towards less restrictive monetary policy and expanded liquidity support could add to the pressure, the Manila-based lender said.

The World Bank, meanwhile, projected in its October 2026 Bangladesh Development Update that inflation will remain elevated at 8.6% in FY27.

It cited recent increases in domestic energy prices, persistent supply-side constraints, expansionary fiscal policy and a shift towards a less contractionary monetary policy stance.

The Bangladesh Securities and Exchange Commission (BSEC) has decided to take strict legal action against listed companies that fail to deposit their declared final cash dividends into separate bank accounts before their annual general meetings (AGMs).

The decision was taken at a commission meeting today (13 October), chaired by BSEC Chairman Masud Khan.

Under existing regulatory directives, listed companies proposing annual cash dividends must deposit the full declared amount into a designated dividend bank account at least one day before their AGMs.

They must also obtain a bank certificate confirming the deposit, duly certified by the managing director, chief financial officer and company secretary, and submit it to the stock exchanges before presenting it to shareholders at the AGM.

Noting recent instances of non-compliance, the commission decided to take punitive action against defaulting companies under the applicable securities laws.

The BSEC also decided to amend the existing directive to explicitly prohibit companies from presenting dividend proposals at AGMs without first depositing the full amount into a separate bank account and obtaining the required bank certificate.

In a parallel move to simplify administrative procedures under the Corporate Governance Code, 2018, the capital market watchdog streamlined the appointment and reappointment framework for independent directors.

The commission decided that approval for the reappointment of existing independent directors will now be granted upon receiving an updated clean Credit Information Bureau (CIB) report from Bangladesh Bank.

Additionally, if an independent director was previously granted an exemption or relaxation regarding qualification and experience criteria under condition of the Corporate Governance Code, that waiver will now automatically apply to new appointments in other listed firms or reappointments in the same company, eliminating the need to seek fresh approval.

Commerce Minister Khandakar Abdul Muktadir today sought the Netherlands’ support in advancing negotiations for a proposed free trade agreement (FTA) with the European Union (EU) and expanding Bangladesh’s trade benefits in the European market after its graduation from the least developed country (LDC) category.

The minister sought the cooperation at a meeting with Sjoerd Sjoerdsma, the Netherlands’ minister of foreign trade and development cooperation, held at the commerce ministry in Dhaka.

Muktadir emphasised the importance of taking bilateral economic relations to a new level by leveraging Dutch technology and investment in agriculture, the jute industry, energy, ports and water management, according to a statement from the commerce ministry.

Highlighting the importance of maintaining Bangladesh’s export competitiveness in the post-LDC era, he said Europe is one of Bangladesh’s most important export markets.

The minister stressed the importance of advancing technical discussions on the proposed FTA with the EU and removing non-tariff barriers.

He particularly noted the potential for joint initiatives to improve the quality and productivity of potatoes and other vegetables, produce export-oriented agricultural goods that meet international standards, and develop new markets.

Regarding cooperation in the jute industry, Muktadir said growing global demand for environment-friendly products was creating new market opportunities for Bangladesh’s jute and jute-based goods.

He noted that Dutch technological assistance could play an important role in developing improved jute seeds, increasing productivity, establishing joint research laboratories and producing diversified jute products.

In particular, he highlighted the potential for adding greater value to the jute industry through environment-friendly packaging and the production of blended-fibre fabrics.

The Dutch minister expressed interest in expanding investment in promising sectors and strengthening existing economic ties with Bangladesh.

He emphasised the importance of drawing on Dutch expertise in agricultural technology, food processing, industrial modernisation, maritime transport and water management.

In the areas of port management and maritime transport, the discussions focused on developing Bangladesh’s port infrastructure, including the Laldia Terminal, establishing modern logistics systems, and exploring potential investment and technological participation by Dutch companies, the statement said.

Oil prices fell on Tuesday and were on track for their first decline in nearly a week, as traders assessed supply risks from attacks on Saudi Arabia while weighing the prospect of additional diesel supplies from Russia.

Brent crude futures fell $1.30, or 1.2 percent, to $105.35 a barrel by 0329 GMT, while US West Texas Intermediate crude futures were down $1.25, or 1.3 percent, at $92.49 a barrel.

Both benchmarks climbed nearly $2 a barrel in the previous session, with Brent settling at its highest since September 15.

US President Donald Trump said Russia had agreed to supply diesel to global markets, and his administration temporarily lifted US sanctions on Russian fuel designed to deprive Moscow of revenue for its war on Ukraine.

Additional supplies could help alleviate tightness in global fuel markets, tempering some of the supply concerns that have supported crude prices recently.

However, "there is considerable scepticism over the Russia-Ukraine energy ceasefire, particularly with reports that Russia has hit Ukrainian energy targets since Trump announced it," ING analysts said in a note.

Lawmakers from both parties in the US complained Trump's agreement with Putin appears to violate US law barring imports of Russian energy until Moscow ends its aggression against Ukraine.

Concerns over the vulnerability of Gulf energy infrastructure and shipping lanes remained in focus after Iran-aligned Houthis struck Riyadh's international airport over the weekend, while tanker attacks were reported near the Strait of Hormuz.

The incidents threatened to derail a recovery in Middle East supplies seen in September, and have reinforced fears of further disruptions along one of the world's most important energy transit routes.

"Fresh diesel supply from Russia and steadier Saudi flows are offering some relief, yet the market still looks more worried about the risk of further hits to ships or pipelines in the Gulf than it is reassured by extra barrels," said Tim Waterer, chief analyst at KCM Trade.

"Until we see clearer signs of de-escalation, the path of least resistance still leans higher," he said.

Ministers of OPEC and non-OPEC Participating Countries in the Declaration of Cooperation said shipping and insurance costs have surged to unprecedented levels of over one-third of the commodity value, impeding efficient movement of crude oil and products.

OPEC has revised down its oil demand growth forecast for this year to 400,000 barrels per day from 1.4 million bpd at the start of the year, in line with developments throughout the year, Haitham Al Ghais, Secretary General of the organisation said on Monday.

US payments firm Visa has received approval from China's central bank to begin preparations for a domestic bank card clearing institution in the country, ending years of waiting to tap into one of the world's largest payment markets.

The move marks a major step for Visa to join rivals American Express and Mastercard in operating bank card clearing services in China and represents a further opening up of the nation's tightly controlled financial sector.

The People's Bank of China (PBOC) issued an administrative approval to Visa Information Technology (Beijing) Co Ltd permitting it to begin preparatory work, according to the central bank's website.

Visa Information Technology (Beijing) is a foreign-invested enterprise established in China by Visa.

"The approval of our Application to Prepare marks a significant step forward in Visa's long-standing commitment to China," Visa CEO Ryan McInerney said in a statement on Tuesday.

The approval comes after US President Donald Trump's summit with Chinese leader Xi Jinping earlier this year in China, which included more than a dozen CEOs of top US companies, including those of Mastercard and Visa.

"We greatly appreciate the important role of the leaders of the United States and China in pursuing a constructive and strategically stable relationship between the world's largest economies," McInerney said.

Visa must complete its preparations within one year, after which it can apply to open for business, the PBOC said.

The central bank, together with the nation's top banking regulator, will review the application and, if it approves, issue a bank card clearing business license.

A GOODWILL GESTURE?

Visa was hoping to break into the Chinese market, which is dominated by state-controlled China UnionPay, with an unprecedented 100 percent ownership stake in a future joint venture license, sources have told Reuters.

"This should be viewed as a goodwill gesture from Beijing towards Washington ahead of the next meeting between Presidents Xi Jinping and Donald Trump," said George Chen, partner and chair of digital practice at The Asia Group.

The two are expected to meet again on the sidelines of the APEC Economic Leaders' Meeting in Shenzhen in November.

Greater market access in financial services has long been a priority for Washington, which has consistently urged Beijing to provide a more open and level playing field for foreign firms operating in China's financial sector, said Chen.

Mastercard, partnering with local clearinghouse NetsUnion Clearing Corp, won approval to prepare to set up its bank card clearing business in China in 2020.

American Express' joint venture in the country was cleared to start bank card clearing services later that year.

In China, bank cards processed 4.6 trillion transactions worth 963.60 trillion yuan ($143.92 trillion) in 2025, according to data from the central bank, highlighting the market's enormous potential.

Dhaka Electric Supply Company (Desco) returned to profitability in FY2025-26 after three years of losses, which had been exacerbated by currency volatility and foreign exchange losses.

The state-owned power distributor posted a profit of Tk40.15 crore, with earnings per share of Tk1.01, driven by higher revenue and gains from foreign currency movements, according to a disclosure published on the stock exchanges today (13 October).

The company also recommended a 5% cash dividend for shareholders for FY26, after skipping dividend payments for two consecutive years due to heavy losses.

Under the recommendation, shareholders will receive Tk0.50 for each share held, with the total dividend payout amounting to Tk6.42 crore.

This marks a major turnaround for the power distributor, which had incurred a heavy loss of Tk125 crore in FY25.

Following the declaration of dividend and annual corporate declaration, Desco's share price declined by 6.75% to Tk23.50 each at the Dhaka Stock Exchange.

In the three years, it had incurred a total Tk1,172 crore losses since FY2022-23 to FY2024-25.

Due to the losses, it had skipped dividend payouts for FY24-25, according to its financial statements.

According to disclosure, Desco managed to break its three-year streak of losses due to several positive operational and financial developments.

It said, this positive result was mainly attributed to higher yields from increased sales revenue by enhancing operational activities, interest income and a positive swing in foreign exchange operations, shifting from a foreign currency exchange loss in the prior period to a foreign exchange gain.

It previously faced blow due to heavy loss for foreign currency fluctuation for paying its foreign debts.

The net operating cash flow per share stood at Tk17.99, and the net asset value per share at Tk39.23, which was Tk15.93 and Tk35.33 respectively for the previous fiscal year.

On the capital market front, Desco's current market capitalisation stands atTk1,001 crore.

In a previous disclosure, it said the company received consent from the Bangladesh Securities and Exchange Commission for issuance of 4.59 crore Irredeemable Non-Cumulative Preference Shares of Tk10 each amounting total Tk45.90 crore. The shares to be issued in favour of the Government of Bangladesh, represented by the Secretary, Power Division, Ministry of Power, Energy and Mineral Resources, against share money deposits.

The state-owned Infrastructure Development Company Limited (IDCOL) is financing Walton Hi-Tech Industries' 50-megawatt (MW) captive solar power project, marking one of the largest rooftop and floating solar investments by a private manufacturer in the country.

IDCOL will provide Tk 1.44 billion in total for the project, of which Tk 440 million has already been disbursed, IDCOL acting managing director Monirul Islam told energy reporters at Walton's complex in Chandra, Gazipur on Monday.

Walton has so far installed 32 MW from solar — covering factory roofs, walkways and a 1.25 MW floating plant on a factory pond — with support from IDCOL, Monirul said.

The electronics giant consumes around 35 MW a day. It plans to add another 18 MW by December this year, taking total green generation to 50 MW.

"We are working to meet our entire daytime load from green sources," Walton Additional Managing Director Md Nazrul Islam Sarker said during the site visit, organised by the Forum for Energy Reporters Bangladesh (FERB) in collaboration with IDCOL.Buy Maps

IDCOL has been a key financier of renewable energy since 2002, starting with its nationwide Solar Home System programme, and is now focusing on industrial rooftop and floating solar to help meet the government's renewable energy targets.

The government has recently cut import duties and offered incentives for solar equipment as Bangladesh looks to diversify its fuel mix, improve energy efficiency and cut carbon emissions amid rising industrial power costs.

Walton said the solar shift is expected to significantly reduce its grid dependence and energy bill, while advancing its green factory compliance for export.

Once completed, the 50 MW plant will be among the largest captive renewable projects by a single industrial group in Bangladesh, officials said.

The Bangladesh Securities and Exchange Commission (BSEC) has decided to enforce strict legal action against listed companies failing to deposit declared final cash dividends into separate bank accounts prior to their Annual General Meetings (AGMs).

The decision was made during the regulator's commission meeting, presided over by BSEC Chairman Masud Khan, today (13 October).

Under existing regulatory directives, listed companies proposing an annual cash dividend must transfer the entire declared sum into a dedicated, separate dividend bank account at least one day before their AGM.

Companies are also required to obtain a bank certificate validating the deposit, which must be certified by the managing director, chief financial officer, and company secretary, before submitting it to stock exchanges and presenting it to shareholders at the AGM.

Observing recent non-compliance with these rules, the BSEC resolved to take punitive measures against defaulting companies under applicable securities laws.

Furthermore, BSEC decided to amend the existing directive to explicitly mandate that no dividend proposal can be presented at an AGM without first depositing the full amount into a separate account and securing the requisite bank certificate.

In a parallel move to simplify administrative procedures in line with the Corporate Governance Code, 2018, the capital market watchdog streamlined the appointment and reappointment framework for independent directors.

The commission decided that approval for the reappointment of existing independent directors will now be granted upon receiving an updated clean Credit Information Bureau (CIB) report from Bangladesh Bank.

Additionally, if an independent director was previously granted an exemption or relaxation regarding qualification and experience criteria under the conditions of the Corporate Governance Code, that waiver will now automatically apply to new appointments in other listed firms or reappointments in the same company, eliminating the need to seek fresh approval.

The International Monetary Fund (IMF) has cut its economic growth forecast for Bangladesh in the current fiscal year (FY2026-27) to 3.2 percent from the 4.3 percent projected in April, joining other major development partners in downgrading their outlooks amid persistent economic challenges.

It also projected an increase in average inflation in Bangladesh to 10.9 percent in the current fiscal year, reversing the easing seen in FY26, when average consumer price inflation fell to 8.7 percent from double digits, according to the IMF’s World Economic Outlook (WEO) report released yesterday at the annual meetings of the IMF and World Bank Group in Bangkok.

The IMF’s inflation projection is higher than the World Bank’s forecast of 8.6 percent for the current fiscal year, FY27, made earlier this month. However, both multilateral lenders have cut their economic growth forecasts for the South Asian country.

The World Bank has recently revised down its forecast for Bangladesh’s economic growth to 3.4 percent this year, while the ADB trimmed its growth projection for Bangladesh to 4 percent in September.

It would be the fourth consecutive year of slowing economic growth, as energy shortages, banking sector vulnerabilities, subdued credit growth and tight fiscal constraints continue to weigh on Bangladesh’s economy.

The downgrade in the economic outlook for the South Asian economy comes as the IMF expects the global economy to grow by 3.1 percent in 2026, down from 3.5 percent last year, with the war in the Middle East and a surge in artificial intelligence-related investment pulling economies in different directions.

It projects that advanced economies will grow by 2.1 percent this year and emerging and developing economies by 3.7 percent. The Middle East and Central Asia region is expected to be the hardest hit, contracting by 0.3 percent.

In South Asia, India is projected to grow by 7 percent in both FY27 and FY28, among the fastest rates in the region. Pakistan’s economy is projected to expand by 3.6 percent in FY26 and 3.5 percent in FY27.

The IMF said the global outlook masks growing disparities, with 32 economies expected to account for 95 percent of global growth, down from 54 in April. About 47 percent of economies have had their growth forecasts downgraded.

Countries less exposed to the energy shock and more closely connected to the technology supply chain are holding up better, it said.

Energy-importing economies outside that supply chain, including many low-income countries, face higher import bills, currency pressures and weaker incomes. The IMF said oil prices will average around $96 a barrel in 2026, compared with $68 a year ago.

The fund said global inflation would rise to 4.7 percent this year from 4.1 percent in 2025, driven mainly by energy and food prices.

The multilateral lender warned that a prolonged conflict in the Middle East and weather disruptions linked to El Niño could push energy and food prices higher. A reassessment of expected returns from artificial intelligence investment could also trigger a sharp market correction.The IMF urged governments to rebuild fiscal buffers, avoid broad fuel subsidies and price controls, and keep any support temporary and targeted, preferably through cash transfers.

The share of non-cotton garments in Bangladesh’s total garment exports rose to 30.7 percent in the January-September period of 2026, thanks to rising demand from international clothing retailers and brands, according to data from the Export Promotion Bureau.

Total garment exports from Bangladesh stood at $29.91 billion in the nine months to September this year.

Cotton garments accounted for $20.75 billion, or 69.3 percent, while non-cotton garment exports amounted to $9.17 billion, or 30.7 percent, according to the data.

The share of non-cotton garments rose throughout the year. The monthly average was 28 percent in January and February, surpassed 30 percent for the first time in June, reaching 31.6 percent, and peaked at 34.6 percent in August before falling to 32.6 percent in September.

Non-cotton exports reached their highest monthly value in July, at $1.31 billion, according to the data.

However, cotton is still the backbone of the sector. Monthly cotton exports ranged between $1.97 billion and $2.6 billion during the nine-month period.

Non-operational companies listed on the Dhaka Stock Exchange (DSE) number as many as 37, with five joining the group this year, heightening concerns about regulatory oversight and investor protection.

C&A Textiles is the latest addition after a DSE inspection team found its factory closed last week, according to a disclosure by the stock exchange.

DSE data show that 36 listed companies went out of operation between 2016 and Sunday, while Meghna Pet Industries has remained shut since 2002, making it the longest-closed company among listed firms.

The list of non-functional companies becomes even longer when troubled financial institutions are taken into account. Five listed Islamic banks have already merged, while three listed non-bank financial institutions (NBFIs) have been selected for liquidation.

Market analysts say the growing number of inactive companies exposes deep-rooted structural weaknesses in the country's capital market and highlights long-standing failures in regulatory oversight.

Many of these companies raised funds from the public through the stock market years ago, but later saw their financial strength wither due to sponsor disputes, financial irregularities, loan defaults or legal battles. Some organisations failed to modernise operations or lost competitiveness amid changing market conditions.

For some manufacturers, rising energy costs and persistent gas shortages have made production financially unviable. In other cases, banking restrictions, shortages of working capital and raw materials, and disputes involving sponsors have disrupted business operations.

S Alam Cold Rolled Steels, for example, suspended production in August this year, citing banking restrictions and shortages of raw materials and skilled workers. The company fell into trouble following the political changeover in August 2024, when its owner left the country, and its bank accounts were subsequently frozen, disrupting its access to raw materials and production inputs.

Hamid Fabrics suspended factory operations in June last year, citing inadequate gas pressure. The company informed investors that production had already been disrupted for nearly two years before the worsening gas crisis forced a complete shutdown.

Appollo Ispat Complex, which was listed in 2013 with its IPO raising Tk 2.20 billion from the primary market, has remained shut since October 2020. The manufacturer of Rani Marka Dheutin, which went public despite strong objections from market stakeholders, began to show financial deterioration within four years of listing following allegations of embezzlement against its former directors.

Company officials of Meghna Pet Industries could not be reached for comment, as the DSE website provides neither a contact number nor the name of the company secretary.

In some cases, companies appear to exist only on paper. Familytex (BD), for instance, no longer has any physical manufacturing assets. A recent investigation by the Chittagong Stock Exchange (CSE) found that the company's factory and other assets had already been sold to a private entity.

C&A Textiles' prolonged troubles

C&A Textiles' latest operational setback has raised questions about the effectiveness of the company's earlier revival efforts and its prospects of returning to sustainable production.

The company entered the capital market in 2015, raising Tk 450 million through an IPO. Its production was suspended in June 2017, followed by prolonged operational and financial difficulties.

Alif Group took over the troubled company in 2021 and subsequently attempted to revive its business. Production resumed on a trial basis in 2022, but the latest DSE inspection found that the factory was non-operational.

The DSE downgraded the company to the 'Z' category in January 2025 for failing to hold its annual general meeting within the stipulated time frame.

The company has also failed to publish quarterly financial statements since the quarter ended in March 2024, according to DSE information, further limiting shareholders' ability to assess its financial health.

C&A Textiles had previously announced a proposed merger with Alif Industries, subject to the necessary approvals from banks, creditors, shareholders, the High Court and the securities regulator. However, the merger process has yet to be completed.

The development has raised fresh questions about regulatory oversight, as the company has failed to publish financial statements for an extended period, leaving investors without up-to-date information on its financial health and business prospects.

Market participants say the absence of timely and effective intervention has allowed troubled companies to remain listed long after their production activities ceased, leaving investors exposed to uncertainty.

Md Sajedul Islam, shareholder director of the DSE, said the exchange had intensified inspections as many companies had failed to disclose their operational status to investors in a timely manner.

He said the physical inspections were part of the exchange's broader initiative to verify the operational status of listed firms and take appropriate action accordingly.

Prof Abu Ahmed, chairman of Investment Corporation of Bangladesh, however, said inspections alone could not resolve the underlying problems. The securities regulator and the stock exchanges should draw up effective action plans.

He noted that companies with viable business prospects should be required to submit time-bound revival plans and disclose regular progress, while prolonged defunct firms need separate resolution measures based on their financial and legal status.

Bangladesh Securities and Exchange Commission Chairman Masud Khan recently said the regulator planned to suspend trading in shares of companies that had remained non-operational for an extended period. However, no specific implementation timeline has been announced.

Stock prices surge while factories remain shut

Despite prolonged shutdowns, machinery lying idle and workers gone for long, several non-operational companies have posted sharp price increases on the bourses. Analysts suspect speculative trading and price manipulation behind the rallies.

Aziz Pipes, which has remained closed since May 2025, saw its share price rise about 31 per cent over the past month. The stock gained another 9.97 per cent on Sunday to close at Tk 72.70.

Meghna Pet Industries, whose factory has been shut for more than two decades, climbed 25 per cent over the past month to Tk 73.60 on Sunday.

Tung Hai Knitting & Dyeing, which has not been producing anything for more than six years, also gained 22 per cent over the past month.

Shyampur Sugar Mills, with its production suspended since December 2020, saw its share price rise 9 per cent over the past month.

Responding to concerns over the growing number of non-operational firms, a BSEC executive director, who asked not to be named, said the stock exchanges are the frontline regulators and have the authority to take action against such companies.

"The stock exchanges can suspend trading or delist companies in accordance with the listing regulations," he added.

The Bangladesh Securities and Exchange Commission (BSEC) has formally urged Bangladesh Bank to extend the duration and expand the size of the special capital market investment fund scheme for commercial banks, proposing to elevate the individual allocation ceiling from Tk200 crore to Tk300 crore per bank to inject sustained liquidity and stabilise market volatility.

Speaking as the chief guest at a seminar, "Digital Deception and Scam Alert" at the Dhaka Stock Exchange (DSE) auditorium, BSEC Chairman Masud Khan emphasised that navigating economic challenges requires comprehensive structural reforms rather than short-term fixes.

Masud Khan said the scheme is set to end on 30 November, and it is a serious issue for the capital market, as we heard that some banks are feeling concerned about the extension. If the scheme tenure is not extended, then the market will suffer.

Detailing the commission's sweeping reform agenda, he announced that the BSEC is finalising comprehensive amendments to Initial Public Offering (IPO) rules to ensure absolute transparency.

The revised framework introduces stringent audit verification mandates, requiring independent external auditors to verify financial statements rigorously to eliminate false reporting, he said.

Acknowledging the extended gestation periods inherent to heavy capital-intensive sectors, the BSEC chairman said the amended rules will accommodate large-scale infrastructure projects, power plants, and mega industrial units by allowing them to apply for IPOs despite accumulated initial losses.

Besides, the commission is raising the loan repayment ceiling for IPO proceeds, enabling fundamentally sound, over-leveraged enterprises to restructure their balance sheets effectively, Masud said.

The BSEC chairman further said the regulatory overhaul extends deeply into the mutual fund sector, shifting away from rigid closed-end structures to champion open-ended funds in line with global standards.

To broaden retail market penetration, the commission is introducing certified mutual fund agents modelled on international insurance broker frameworks, he said.

The discussions also confronted the rising menace of cyber deception and digital scams. DSE Chairman Mominul Islam warned that although seamless information flow drives capitalist markets, social media exploitation and Ponzi-style double-money traps severely undermine public trust and exploit investor vulnerabilities.

Echoing these concerns, DSE IT General Manager Abu Nur Mohammad Hasanul Karim detailed how scammers leverage artificial intelligence, deepfakes, and cloned brokerage platforms to execute cyber fraud, urging market participants to practice rigorous verification, multi-factor authentication, and institutional reporting.

BSEC Commissioners Nafeez Al Tarik and Nahid Mahtab further cautioned investors against unrealistic high-return schemes.

Mahtab noted that cyber fraudsters routinely impersonate regulatory bodies and licensed brokerages using AI-generated media across social networks, necessitating advanced market surveillance that looks beyond isolated transactions to detect coordinated manipulative intent.

Concluding the seminar, market leaders stressed that combining progressive regulatory measures, enhanced digital vigilance, and extended banking liquidity support will successfully fortify investor confidence and cultivate a resilient, transparent capital market in Bangladesh.

The latest Bangladesh Bank data shows net FDI inflow came down to $1.47 billion in FY26 from $1.69 billion in the previous fiscal year.

The inflow declined again after a surge of 20 per cent in FY25.

In addition, FDI lost momentum in the April-June quarter of FY26 as rising investment outflows and weakening intra-company financial flows eroded net inflows, exposing the fragility of foreign investment performance.

The decline in net FDI is raising concerns about the sustainability of foreign investment amid growing economic headwinds and policy uncertainties.

People familiar with the development warn that deeper structural challenges, including regulatory delays, rising operational costs, energy shortages, and currency volatility, could discourage both new and existing foreign investors, although the latest quarterly decline alone does not establish a loss of investor confidence.

Talking to The Financial Express, Arief Hossain Khan, executive director and spokesperson at the Bangladesh Bank, attributed the subdued investment trend partly to foreign investors' wait-and-see approach as the government undertook reforms in the banking sector, fiscal policy, and other relevant areas, while the ongoing energy crisis and broader economic uncertainties continued to weigh on investment decisions.

Net FDI inflows into the country fell 22.44 per cent quarter-on-quarter to $346.94 million in the April-June period of 2026 from $447.31 million in the January-March quarter.

A component-wise analysis shows the quarterly decline was driven mainly by lower reinvested earnings and a sharp contraction in net intra-company loans, while equity capital inflows remained relatively stable.

Reinvested earnings, the largest component of net FDI, dropped 23.92 per cent quarter-on-quarter to $260.91 million in April-June 2026 from $342.92 million in the previous quarter.

During the quarter, gross reinvested earnings inflows amounted to $664.35 million, while outflows stood at $403.45 million, leaving a net inflow of $260.91 million.

Net intra-company loans recorded the steepest contraction, plunging 67.04 per cent quarter-on-quarter to $8.61 million from $26.13 million in January-March 2026.

Gross intra-company loan inflows totalled $333.80 million during the April-June quarter, but outflows reached $325.19 million, substantially limiting net contribution from this component.

Net equity capital inflows, meanwhile, declined marginally by 1.07 per cent quarter-on-quarter to $77.42 million from $78.26 million in the preceding quarter.

Gross equity inflows amounted to $115.06 million against outflows of $37.64 million.

Securing new equity funding continues to be difficult due to the ongoing caution among global investors, according to a top official of Invest Bangladesh, the country's apex investment promotion agency.

Commenting on the quarterly FDI data, Nahian Rahman Rochi, a member of Invest Bangladesh, said their focus remained on improving the fundamentals of the investment climate to attract stronger and more sustainable FDI over time.

In a statement issued on Monday, Invest Bangladesh said net FDI rose 12.78 per cent year-on-year to $346.94 million in April-June 2026, driven largely by reinvested earnings.

"The year-on-year growth in overall FDI was encouraging, particularly against a backdrop of continued global economic uncertainty, geopolitical tensions, and higher energy costs," Nahian said in the statement.

Referring to the latest Bangladesh Bank data, the statement said net reinvested earnings increased 55.08 per cent year-on-year to $260.91 million.

This indicated that foreign investors operating in Bangladesh were making profits and reinvesting those profits in the country, it said.

It also said net equity capital stood at $77.42 million, down 4.77 per cent from the same period of the previous year.

Global geopolitical uncertainty, conflicts in the Middle East, and rising energy prices had put pressure on new investments worldwide, it added.

"Fresh equity investment remains challenging as investors continue to take a cautious approach globally. At the same time, the strong growth in reinvested earnings is an important positive signal as it demonstrates confidence among existing investors in the long-term prospects of their operations and can support further expansion, employment, and productive capacity," Nahian said.

He also highlighted the government agency's role in attracting more investment, especially in economic zones.

"We are also working to improve investment readiness across our economic zones. The Chinese Economic and Industrial Zone, which has been delayed for more than a decade, is now under development, with a 2028 target and approximately $500 million in prospective investment."

The 180-day progress report published recently by Invest Bangladesh outlined the milestones that had been reached thus far, he said.

"We will continue to report on progress as we work to turn investment interest into operating businesses and jobs," he added.

Despite the decline in net inflows, overall gross FDI inflows remained broadly stable, edging up to $1.11 billion in April-June 2026 from $1.10 billion in the previous quarter and $1.09 billion in the corresponding period of 2025.

Total FDI outflows, however, rose to $766.27 million from $656.99 million in January-March 2026, reducing the amount retained as net investment during the quarter.

The outflow was lower than the $787.12 million recorded in April-June 2025.

The data highlight a gap between gross investment inflows and the net amount retained in the economy, with substantial outflows offsetting much of the money entering the country.

While gross inflows remained broadly stable, the fall in net FDI indicates that headline inflow figures alone may not fully capture the strength of foreign investment.

Reinvested earnings reflect profits that foreign-invested companies retain and reinvest in their businesses rather than remit abroad.

Intra-company loans represent lending between foreign parent companies and their affiliates in Bangladesh.

Bangladesh will urge the World Bank and the IMF to link development financing more closely to measurable outcomes, arguing that the key challenge is not a shortage of money but the failure to translate funding commitments into jobs and investment.

The position is outlined in talking points prepared for a closed-door ministerial roundtable titled "Transforming Demographic Transition into Human Capital Gains and Job Creation", to be held on the sidelines of the World Bank Group Annual Meetings in Bangkok tomorrow.

The Bangladesh delegation, led by the finance minister, will call for faster project implementation support, greater mobilisation of private capital through guarantees and risk-sharing mechanisms, closer alignment of skills training with employers' needs, and financing linked to measurable results, including investment mobilised, and jobs created.

"Financing commitments don't automatically become outcomes," the document, seen by The Business Standard, says, highlighting delays in project preparation, procurement and approvals that erode the development impact of funding.

Dhaka frames the stakes in global numbers: 120 crore young people in developing economies will reach working age in the next 10-15 years, against a forecast 40 crore jobs. About 28% of Bangladesh's population is young and of working age.

The paper says jobs must come primarily from the private sector, and cites deregulation, digital investment services through One-Stop Service and BanglaBiz, and priority sectors including high-value manufacturing, export services, SMEs, ICT and modern agriculture.

The government is also pursuing a strategy focused on technology, entrepreneurship and workplace reforms, with an annual target of creating 200,000 technology-sector jobs and a Tk500 crore startup fund to support young and women entrepreneurs.

Turning demographic change into economic gains

The 90-minute ministerial roundtable will bring together finance ministers and global financing leaders to discuss how countries can convert demographic change into human capital development, productive employment and sustainable economic growth.

Finance ministers from Bangladesh, Indonesia and Egypt are scheduled to present their countries' experiences, with five minutes allocated to each country. Discussions will focus on population stabilisation, public and private investment in human capital, health and education outcomes, employment opportunities, and inclusive growth.

According to the World Bank Group's background document for the meeting, demographic change is a major force shaping economic and social development, but its potential remains largely untapped in many countries.

Rapid population growth, persistently high fertility rates and gaps in health, education and skills continue to constrain productivity, strain public services and limit economic opportunities for women and young people.

However, sustained investment in quality primary healthcare, education and skills development, alongside structural reforms that encourage private investment and exports, can help countries unlock a demographic dividend.

Such investments can generate more and better-paid jobs while laying the foundation for inclusive and sustainable economic growth, the document says.

The dollar traded around its highest in a year and a half on Monday, as an escalating Middle East conflict kept investors wary ahead of key US inflation data later this week.

That could shape the outlook for interest rates. Oil prices were volatile after Yemen’s Iran-backed Houthis stepped up strikes on Saudi Arabia, while two tankers were attacked over the weekend.

Brent crude futures were down 0.5 percent at $104 a barrel, under a touch of pressure after Sunday’s announcement from US President Donald Trump about an energy ceasefire between Ukraine and Russia.

The futures price is still nearly 45 percent above where it was before the war started, while prices on some physical markets are double those levels.

The dollar index, which tracks the US currency against six others, was slightly down at 102.16 but remained within sight of last week’s 18-month highs.

Weekly data from the US markets regulator shows investors have been adding to their bullish positions in the dollar.

The positions rose to around $36 billion in the week to October 7, from just $8.4 billion three weeks ago, largely at the expense of the euro.

“The US dollar has strengthened recently on the back of negative developments overseas that have boosted its appeal even as market participants have pared back expectations for Fed rate hikes,” MUFG currency strategist Lee Hardman said.

Wednesday’s US consumer inflation report, one of the last major economic releases before the Federal Reserve’s policy meeting this month, could be critical in determining the near-term direction of the dollar.

Data last week showed US consumer sentiment deteriorated further in early October, as the rising cost of living because of the Middle East conflict soured households’ views of the economy.

International energy companies are showing renewed interest in Bangladesh's offshore oil and gas exploration, with Chinese and Turkish state-backed firms taking the lead in purchasing bid documents.

China's Sinopec, CNOOC International, and Turkey's Turkish Petroleum Overseas Company (TPAO) have so far purchased official Promotional Packages, or bid documents, for Bangladesh's 2026 Offshore Bidding Round, according to Petrobangla's bid sales records.
Sinopec bought Information Package and bid documents as well as the specialised Data Package on 23 September to undertake a more detailed assessment of geological structures and potential oil and gas reservoirs.

The purchases make it the latest major international company to move into the more advanced stages of the bidding process.

CNOOC International purchased the official Promotional Package on 17 August, while Turkey's overseas exploration arm TPAO bought the bid document on 23 July.
Bangladesh launched the offshore bidding round for a second time on 24 May, offering 26 hydrocarbon blocks – 11 in shallow waters and 15 in deep-water areas of the Bay of Bengal – to international oil companies for exploration. The deadline for bid submission is 30 November this year.

Petrobangla said efforts are on-going to bring some major energy giants like BP, ExxonMobil, Murphy Oil, Petrobras, and KUFPEC in the bidding process by reaching out to those companies.

The purchases are significant as companies typically need to study geological and technical information before deciding whether to submit commercial bids for offshore blocks.

Md Shoyeb, director (Operation and Mines) of Petrobangla, said 10 companies have so far bought information packages but bid documents were bought by 3 companies.

"We expect that some energy giants will buy bids in the coming days. Discussions are going on with ExxonMobil, BP and several others."

Information packages draw wider interest

The bidding round has also attracted a wider group of companies at the initial information-gathering stage.

According to official sales records, companies that purchased Information Packages include local infrastructure and engineering firms as well as international energy and research companies.

Beringia Power Bangladesh Ltd, KrisEnergy, PEAL Engineering & Construction Ltd and ONODA INC are among the companies that have purchased the packages.

Global energy research and consultancy firm Rystad Energy has also bought an Information Package, while local infrastructure company Max Infrastructure Ltd has joined the list.

Switzerland-based Impression Ventures AG is another buyer, while Chinese state-owned Sinopec International Energy Investment Limited has moved further into the process by purchasing the Information Package along with the Promotional Package and specialised DSP-2 & 10 Data Package.

The Information Package provides companies with initial information to assess opportunities under the offshore bidding round, while the Promotional Package and specialised data offer more detailed material for companies moving towards potential bids.

ExxonMobil, BP and Eni in talks

Bangladesh is also reaching out to some of the world's major oil and gas companies to bring them into the offshore bidding process.

A Bangladesh delegation met executives of ExxonMobil, BP and Eni on 30 September.

US energy major ExxonMobil had contacted Petrobangla soon after the opening of the offshore bidding round and held an online meeting with the state-owned company. Executives representing ExxonMobil's Asia-Pacific region attended the meeting.

According to Petrobangla officials, ExxonMobil said it had previously purchased a data package when the offshore bidding process was launched under the interim government and expressed interest in purchasing bid documents in the current round as well.

Petrobangla officials said the government would continue discussions with ExxonMobil and other US energy companies. Energy Division officials, led by Power and Energy Minister Iqbal Hasan Mahmood, are also expected to visit the United States to engage with major US energy companies.

British energy giant BP has also expressed interest in the offshore bidding round and held an online meeting with Petrobangla officials in July.

Deepwater experience among potential players

Several companies that have shown interest or were discussed during the international outreach have experience in offshore and deepwater exploration in different parts of the world.

Houston-based Murphy Oil Corporation, an independent oil and gas exploration and production company, operates and participates in fields across more than 100 blocks in the deepwater Gulf of America. The company also has offshore exploration interests in Brazil, Vietnam and Côte d'Ivoire.

Brazil's Petrobras is another major deepwater operator, with involvement in 14 major deepwater production-sharing fields in Brazil. The company also signed an agreement in September to explore eight deepwater offshore blocks in Côte d'Ivoire under production-sharing contracts.

Kuwait Foreign Petroleum Exploration Company (KUFPEC) has stakes and interests in offshore exploration and production projects in Brazil, Indonesia, Malaysia and the South China Sea.

KUFPEC is also investing $1.54 billion in gas exploration and related infrastructure, with production targeted for 2028, while it has partnered with China National Offshore Oil Corporation in three separate production-sharing contracts in the South China Sea.

Canadian-incorporated and Singapore-headquartered Valeura Energy is involved in offshore oil exploration in the Gulf of Thailand and also has an interest in a deep, tight-gas appraisal block in Turkey's onshore Thrace Basin.

Bangladesh's headline inflation eased marginally to 8.26% in August from 8.32% in July, driven mainly by falling food prices.

However, non-food inflation remained above 9%, while wage growth fell below the inflation rate, putting continued pressure on households' real income and purchasing power.

The findings were highlighted in the Economic Update & Outlook, September 2026, published today (12 October) by the General Economics Division (GED) of the Bangladesh Planning Commission.

According to the report, food inflation fell to 7.02% in August from 7.16% in July.

In contrast, non-food inflation edged up to 9.32% from 9.28% during the same period, widening the gap between food and non-food inflation to more than 2 percentage points.

GED said the marginal decline in headline inflation masked divergent trends in its major components. While food inflation continued to ease, underlying price pressures in non-food items remained persistent.

Falling rice prices provide relief

Falling rice prices were a major contributor to the moderation in food inflation. Overall rice inflation declined further to -7.99% in August from -6.00% in July.

Inflation for medium rice fell to -5.58% from -4.28%, while fine rice inflation dropped to -6.71% from -4.12%. Coarse rice recorded a steeper decline, with inflation falling to -11.83% from -10.19%.

Consequently, rice's negative contribution to food inflation widened to -27.47% in August from -20.25% in July.

GED said the broad-based decline across coarse, medium and fine rice suggested that the easing was not confined to any single category.

However, the report cautioned that sustained rice deflation at these levels warranted close monitoring, as prolonged price declines could affect incentives for rice producers.

Price developments across other food categories remained mixed.

The contribution of fish and dry fish to food inflation rose sharply to 32.37% in August from 24.87% in July. Meat's contribution declined to 13.51% from 14.75%, while fruits' contribution fell to 13.47% from 17.50%.

Vegetables also provided some relief, with their contribution declining to 24.71% from 25.68%.

Onion played a stronger offsetting role, with its negative contribution to food inflation widening to -7.78% from -3.21%.

Wage growth falls below inflation

Despite the slight moderation in inflation, households continued to face pressure on their real purchasing power as wage growth slowed.

Wage growth declined to 8.05% in August from 8.22% in July. With headline inflation at 8.26%, wage growth was 0.21 percentage points below inflation, compared with a gap of 0.10 percentage points in July.

GED said the August figures marked a reversal of the improvement observed in July, when wage growth and inflation had moved closer together.

"As a result, wage-earning households continued to face pressure on their real purchasing power in August," the report said.

The outlook for household purchasing power will depend largely on the relative movements of wages and inflation in the coming months, particularly whether food price moderation continues and elevated non-food inflation begins to ease.

Transport-related cost pressures persist

Transportation cost inflation increased slightly to 9.41% in August from 9.34% in July. Transport services inflation, however, declined to 18.24% from 18.57%.

Inflation in liquid fuels, octane, petrol and diesel remained unchanged, while LPG inflation edged down to 23.97% from 24.03%.

GED said the broadly stable fuel-product inflation indicated that the decline in headline inflation in August was not driven by any significant change in administered or fuel-related prices.

ADP implementation remains sluggish

Bangladesh's Annual Development Programme (ADP) implementation remained sluggish in the first two months of FY2026-27, with the implementation rate falling to 1.85% from 2.39% a year earlier as expenditure on foreign-funded projects dropped sharply.

According to the GED report, total ADP expenditure during July-August of FY2026-27 stood at Tk 5,709.70 crore, marginally lower than the Tk 5,714.83 crore spent during the corresponding period of FY2025-26.

Although expenditure declined by only 0.1% year-on-year, the implementation rate fell more noticeably because of the larger ADP allocation for the current fiscal year.

In August alone, ADP expenditure amounted to Tk 3,588.52 crore, down from Tk 4,070.18 crore in August 2025, representing a year-on-year decline of about 11.8%.

The monthly ADP implementation rate consequently dropped to 1.16% from 1.71% a year earlier.

GED said there was scope to accelerate implementation in the coming months by improving project readiness, procurement, fund release and field-level execution.

Mixed signals from the economy

The September economic update identified several other areas of concern despite signs of improvement in some indicators.

Revenue collection remained below target despite positive year-on-year growth, while ADP expenditure stayed close to last year's level. However, the ADP implementation rate declined and the utilisation of external financing remained weak.

On the external front, foreign exchange reserves recovered in August after declining in July, supported by strong remittance inflows.

Capital machinery imports also increased, potentially signalling an improvement in investment-related activity. However, declining export earnings presented a contrasting picture, pointing to mixed signals from the external sector.

GED also highlighted concerns over the real appreciation of the taka. Despite relatively limited movements in the nominal exchange rate, the stronger real exchange rate could weaken Bangladesh's price competitiveness in international markets.

Overall, the report suggests that while falling food prices have provided some relief from inflation, persistent non-food inflation, slower wage growth and weak private-sector credit expansion continue to pose challenges to household purchasing power and broader economic activity.

Finance ministers and central bankers meet in Bangkok this week for the annual gatherings of the International Monetary Fund and World Bank, with the global economy buffeted between the US-Iran war’s energy shock, rising debt pressures and the AI boom.

The meetings run from Monday through Saturday in the Thai capital, and will see policymakers tackle some stark choices, with the IMF calling on governments to rein in spending even as vulnerable citizens’ needs may be growing in the face of surging inflation and climate risks.

The week will see a combination of high-level closed-door meetings, public events and policy announcements from the world’s top economic officials.

On Tuesday, the IMF will unveil its global economic forecast, along with detailed regional outlooks through the week, as policymakers set about tackling the challenges darkening the economic horizon. In Bangkok, IMF chief Kristalina Georgieva highlighted how the world economy was being pulled in opposite directions by the negative energy supply shock caused by the US war on Iran and the positive demand shock of the artificial intelligence technology boom.

World Bank President Ajay Banga said AI-powered applications could run on less powerful smartphones and be used in healthcare, education, agriculture and other fields that are development priorities for low-income countries.

“That shift into higher gear (from AI) is what is keeping the world economy growing at three percent,” she told an event on the first day of the meetings, adding the growth was “despite the fact we are being dragged down by the energy supply shock.”

At a press briefing, World Bank President Ajay Banga told AFP his message to developing countries on AI was to focus on building “small AI” applications, rather than trying to compete on capital-intensive models.

“Don’t try and compete with America and China on frontier models and large data centres,” he said. “You don’t have the computing power. You don’t have the electricity. You don’t have the people.”

Banga said AI-powered applications could run on less powerful smartphones and be used in healthcare, education, agriculture and other fields that are development priorities for low-income countries.

Chief among concerns in Bangkok will be the economic fallout of the US war on Iran, which has seen energy prices skyrocket as Tehran’s retaliatory action has targeted Washington’s Gulf allies and curtailed global oil and gas supplies.

The IMF has warned that the effects of the shock have been unequal, with developing countries reliant on imported energy hit the hardest. Despite the crisis, the Fund has called on countries to curb spending on subsidies and instead build their fiscal buffers after years of shocks since the pandemic.

Critics say that approach is just not feasible for low-income countries, and that multilateral lenders need to do more.

“The poorer member states of the IMF and World Bank are in distress from spillovers of the Iran war, rising interest rates in the West, and a climate crisis exacerbated by El Nino,” said Kevin P. Gallagher, director of Boston University’s Global Development Policy Center.

“The IMF and World Bank are not meeting this moment. They need an ambitious response that provides short-term emergency liquidity alongside longer term financing to make their economic growth paths less vulnerable to these shocks.” And the needs are great, according to the United Nations Development Programme (UNDP).

The combined shocks “could leave millions more in poverty as developing countries struggle to sustain support for households,” the UNDP warned in a report on Sunday. “We are witnessing a perfect storm that could throw tens if not hundreds of millions of people back into poverty,” said UNDP Administrator Alexander De Croo.

In the developing world, he added, governments are being forced to make the “impossible” choice between cutting support for their poorest citizens or risking their entire development agenda.

Advanced economies in Europe and the United States have weathered the storm from the rising energy prices better, but have not been immune to surging inflation fuelled by those price increases, which have begun to bleed into other goods.

That inflation has seen central banks around the world raise interest rates in an effort to curb rising prices, tapping the brakes on economic activity.

Still, advanced economies have seen a boom in investment in artificial intelligence technology drive stock markets to new highs and bolster economic growth.

The week will also see several key meetings on the sidelines, including of G20 finance ministers, where spiking bond yields will be high on the agenda.

A notable absence at that meeting will be US Treasury Secretary Scott Bessent, who will skip due to “domestic engagements”, a department official said on Friday.