The government has extended the state guarantee for the Investment Corporation of Bangladesh (ICB), a state-owned investment bank, for a Tk3,000 crore loan from Bangladesh Bank, granting a three-year extension until 2029 with a view to stabilising the country's capital market.

Amid mounting pressure and failure to repay the outstanding loan despite the expiration of the original deadline in May, the ICB applied to the government urging an extension, as it is struggling to repay due to a severe liquidity crunch.

In a letter expressing its concerns, the ICB stated that if it is forced to repay the loan now, it would have to sell shares in the secondary market, which would have a negative impact on the market.

According to an official letter from the Financial Institutions Division (FID) of the Ministry of Finance, the sovereign guarantee has been extended for three years, effective from 13 May, 2026 with the primary objective of stabilising the country's capital market.

However, the relief comes with strict financial strings attached that ICB must ensure full repayment of the principal amount within the extended deadline, while keeping all other original terms of the loan agreement unchanged.

The letter states that the primary objective of extending the state guarantee is to ensure stability in the capital market. To this end, ICB's share trading activities and portfolio restructuring activities during the extended period must be closely monitored by the FID.

Also, with the aim of bringing ICB's administrative and operational expenses down to a rational level, reducing the burden of rising interest costs, and overcoming the erosion of portfolio capital, a specific, time-bound, and implementable "Business Recovery Plan" must be formulated and submitted to the FID, and the progress of the implementation of the said plan must be monitored regularly.

The ICB must submit an updated report on ICB's financial liquidity position, capital market investment activities, and the progress of loan repayment preparations must be sent to the Finance Division and the FID every 3 months during the extended period.

Also, the ICB is directed to finalise an updated repayment Schedule, coordinated with Bangladesh Bank, which must be submitted to the Finance Division.

Currently, the ICB is facing a severe capital shortage with around Tk5,506 crore fund erosion due to volatile capital market.

The corporation has invested around Tk12,500 crore in the capital market, but the current market value of those investments has fallen to about Tk8,000 crore as of December 2025.

As a result, ICB is facing an acute capital shortage. It has failed to pay nearly Tk1,200 crore in accrued interest on loans from state-owned banks.

The ICB, once one of the country's most profitable institutional investors, earning hundreds of crores of taka from stock market investments, is now facing mounting losses.

ICB officials said the current board has overhauled the management of government funds following allegations of irregularities in previous years.

The board has strengthened oversight of the Portfolio Management Committee, responsible for buying and selling shares using ICB funds. Officials said weak monitoring previously allowed some corrupt officials, allegedly influenced by market operators, to purchase highly overpriced shares.

A senior ICB official, speaking on condition of anonymity, said, "The loopholes that previously existed at ICB have now been closed. Oversight of the portfolio committee has increased, and purchases through the block market have been stopped. As a result, the erosion of the portfolio has slowed, although the damage has already been done."

The official said investment decisions are now reviewed daily.

"After decisions to buy or sell shares are taken in the morning, a progress report is prepared and discussed at the end of the trading day. That report is presented to the board every 15 days for review, which has helped reduce losses."

The official said ICB urgently needs further government financial support or low-interest funding.

"The government has already provided funds at an interest rate of 4%. If additional low-interest funds are provided solely to repay existing loans, the institution can be saved. Our annual operating expenses are only around Tk100-120 crore, but interest payments alone amount to nearly Tk1,000 crore. It is simply not possible to sustain ICB under these circumstances."

According to ICB's financial statements, income from capital gains, dividends and subsidiary companies is now lower than its interest expenses. The corporation is also incurring substantial losses because of operating costs and provisions against investments.

After posting a record loss of Tk1,213 crore in the 2024-25 financial year, ICB reported a further loss of Tk588 crore during the first nine months of FY26. Although the final quarter's accounts have yet to be published, the corporation expects to remain in the red for the full year.

The government is planning to merge four investment promotion agencies into a single authority under a draft law aimed at simplifying investor services, reducing bureaucratic hurdles and improving coordination among state institutions.

The proposed Integrated Investment Development Authority Act, 2026 seeks to establish the Unified Investment Development Authority (UniDA).
The agency would bring the Bangladesh Investment Development Authority (Bida), Bangladesh Economic Zones Authority (Beza), Bangladesh Hi-Tech Park Authority (BHTPA) and the Public-Private Partnership Authority (PPPA) under one umbrella.The draft law, prepared by Bida, aims to boost domestic and foreign investment, support industrialisation, improve service delivery and ensure more effective use of state-owned industrial and commercial assets.

UniDA would be a statutory body with administrative and financial powers, headquartered in Dhaka, with the authority to open branch offices at home and abroad.

Ashik Chowdhury, executive chairman of Bida, said the proposal was designed to create a single point of contact for investors who now have to approach multiple agencies depending on the nature and location of their projects.

“Investors have repeatedly told us that they want to deal with a single entity instead of navigating multiple organisations for different approvals and services,” he said. “The objective is to reduce hassle for investors and make the entire process more coordinated.”

The merger would not change the services currently offered by the four agencies, Ashik said. “The difference is that the services will be coordinated through one institutional framework.”

Under the draft law, UniDA would be governed by a board chaired by the prime minister or a nominee holding ministerial rank, including key economic ministers or advisers, the Bangladesh Bank governor, heads of the constituent agencies and three private-sector representatives.

An executive council headed by an executive chairman would oversee day-to-day operations. The authority would oversee investment promotion, economic zones, hi-tech parks and public-private partnership projects.

It would formulate investment policies, approve projects, coordinate infrastructure support, monitor approved projects and help remove administrative and legal bottlenecks delaying investment.

If the law is enacted, all private industrial projects not governed by specialised authorities would require registration or approval from UniDA, as would foreign companies seeking to establish branch, liaison or representative offices in Bangladesh.

Once an investment is approved, UniDA would set binding timelines for key services, including land allocation, utility connections, customs clearance and environmental approvals.

The law would also empower the government to declare industrial areas, economic zones and hi-tech parks through gazette notifications, acquire land where necessary under the Acquisition and Requisition of Immovable Property Act, 2017, and transfer unused government-owned industrial and commercial assets for investment projects.

The proposal, however, has drawn concern from some public-private partnership specialists.

Tapas Chandra Bose, a deputy director and researcher on PPPs, said Bangladesh’s low tax-to-GDP ratio and declining access to concessional foreign financing have made PPPs increasingly important for infrastructure development.

He said the PPP Authority’s institutional independence had helped develop a project pipeline worth more than $41 billion, and warned that folding it into a broader investment authority could undermine investor confidence and weaken private-sector participation in infrastructure projects.

He called for wider consultation before the legislation is finalised.

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, questioned whether merging only a few agencies would substantially improve the investment climate, saying the reform overlooks deeper institutional issues.

He said Bangladesh has created multiple agencies with overlapping mandates, with investment-related regulatory services delivered by more than 50 organisations -- yet the proposed merger covers only four bodies, which have fundamentally different functions.
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He explained that Beza and BHTPA manage industrial estates, Bida is the country’s main investment promotion agency, and PPPA structures public-private partnership projects.

The priority, he said, should be cutting unnecessary licences, registrations and approvals, rather than relying on institutional mergers alone.

The draft law is in its final stage after stakeholder consultations and is expected to be sent to the Cabinet Division by the end of this month, said Nahian Rahman Rochi, executive member (investment) at Bida.

Rochi said the initiative comes as Bangladesh seeks to attract more foreign investment after several years of relatively weak FDI inflows and amid intensifying competition from regional peers.

“The objective is to create a single, integrated platform for investors without reducing the scope of services currently provided by the existing agencies,” he said.

The US trade deficit widened sharply in May to its largest in over a year as imports rose, government data showed Tuesday, with analysts noting that businesses could be gearing up for further tariffs.

The shift came as the world’s biggest economy grappled with fallout from war in the Middle East, while imports of tech goods linked to the country’s data center buildout remained strong.

The overall trade gap surged from the month prior by 42.2 percent to $77.6 billion, according to data from the Commerce Department. This was slightly less than a consensus forecast by Briefing.com.

In May, imports climbed by 3.3 percent to $395.3 billion, while exports dipped by 3.2 percent to $317.7 billion.

In May, imports climbed by 3.3 percent to $395.3 billion, while exports dipped by 3.2 percent to $317.7 billion
While imports of capital goods like computer accessories and semiconductors showed just a modest increase, “They are up 42 percent year-over year, thanks to ongoing demand for AI hardware,” said economist Grace Zwemmer of Oxford Economics.

She added that the latest imports uptick was broad-based and led by consumer goods, with “about half the strength attributed to pharmaceutical preparations.”

“This could be a sign that businesses are beginning to frontload pharmaceutical imports ahead of the 100 percent tariffs that are set to go into effect on July 31, although there are many exemptions embedded in the policy,” Zwemmer noted.

US trade data has been fluctuating widely over the past year as President Donald Trump imposed sweeping tariffs on various trading partners, sending businesses scrambling to avoid them.

“Imports convey solid US domestic demand,” said Nationwide financial market economist Oren Klachkin in a note.

But he added that companies’ attempts to get ahead of planned tariff hikes “likely lent a hand.”

Meanwhile, US exports of crude oil and petroleum products advanced after US-Israeli strikes on Iran from late February, which triggered Tehran’s retaliation in virtually blocking the Strait of Hormuz.

The strait is a key waterway for energy transit, sending prices soaring at the time.

While crude exports were still up in May, the partial reopening of the strait after the United States and Iran signed a memorandum of understanding helped push petroleum exports towards pre-war levels, Zwemmer said.

For now, the temporary deal saw a pause in hostilities while officials seek a longer term solution, and energy costs have cooled.

The Indian rupee eked out gains on Tuesday, tracking an uptick in most Asian peers even as dollar demand from merchant payments and maturing non-deliverable forward contracts limited room for the currency to gain.

The rupee traded at 95.28 against the dollar as of 11:25 am IST, up 0.1 percent from its previous close.

The RBI’s daily reference rate, called the daily fix, was last quoted at a premium of around 0.45/0.55 paisa, signalling elevated dollar demand. The fix usually attracts concentrated dollar buying or selling related to maturing contracts.

“Despite the central bank’s interventions and measures to boost flows, (the) rupee is struggling to cling to gains, which points to the scale of underlying USD demand,” a trader at a foreign bank said.

Analysts and traders are keeping a close eye on the scale of inflows mustered by recent policy measures such as removing tax on foreign investment in debt and offering foreign currency deposits with high interest rates. Goldman Sachs anticipates about $60 billion of inflows over the remainder of 2026.

In the near-term though, FX advisory firm Mecklai says that the dollar-rupee pair is trading with a “neutral to bullish” bias and is expected to encounter resistance in the 95.50-95.80 zone, while support is pegged in the 94.0-93.90 band.

Elsewhere, Asian currencies were mostly trading firmer, while regional stocks fell. Indian equities bucked the trend with the Nifty 50 index up 0.4 percent.

Investors are now looking ahead to the release of the minutes of the US Federal Reserve’s June meeting, due Wednesday. Traders are currently pricing in about 30 bps of rate hikes in the rest of 2026.

Closer public-private collaboration is essential to make healthcare affordable for all, the finance minister said yesterday, noting that Bangladesh has one of the highest rates of out-of-pocket healthcare spending in the world.

The country also needs a stronger focus on entrepreneurship to ensure the sustainable transformation of its healthcare sector, Amir Khosru Mahmud Chowdhury said at an event on health entrepreneurship at Amari Dhaka.

According to the Bangladesh National Health Accounts 1997-2020, nearly 69 percent of total health expenditure is paid directly by households out of their own pockets.

The minister said increasing budget allocations alone would not fix the problem, and that the priority was optimal use of existing resources, with joint public-private discussions serving as a roadmap for the future.

Bangladesh already has skilled entrepreneurs, diagnostic centers, private hospitals and a strong pharmaceutical industry, Khosru said.

This year’s budget allocates substantial support for the pharmaceutical sector’s Active Pharmaceutical Ingredients (API) industry, including a dedicated API zone.

The key question, however, the minister said is how to integrate that capacity into the mainstream healthcare system.

Stating that healthcare a fundamental right for all, Khosru said the government is placing greater emphasis on primary and preventive care, with plans to deploy about 100,000 health workers to raise awareness at the grassroots level.

Rather than build additional public healthcare infrastructure, he said, the government has made a policy decision to utilise private sector capacity and expertise instead.

The current budget also offers significant incentives for domestic and foreign entrepreneurs to invest in manufacturing healthcare equipment in Bangladesh, an initiative that has already drawn a strong response, he said.

The finance minister said the people of Bangladesh have the potential to become among the world’s finest entrepreneurs if given the right opportunities and policy framework.

He said the current government’s political philosophy is centered on private sector-led growth, with the country’s leadership viewing the private sector as the driving force of economic development.

He expressed optimism that visionary leadership, supportive policymaking and the hard work of Bangladesh’s entrepreneurs would make a transformative contribution to the healthcare sector and bring quality care to people’s doorsteps.

The event was attended by Zubaida Rahman, Vice President of the Ziaur Rahman Foundation, as the chief guest. Special guests included the finance minister, Health Minister Sardar Md Sakhawat Husain and the PM’s Special Assistant on Health Affairs Dr SM Ziauddin Haider.

German industrial production ticked up more than expected in May, official data showed Tuesday, as Europe’s top economy defied the worst following the virtual closure of the Strait of Hormuz.

Factory production rose 0.9 percent on the month, statistics office Destatis said, beating expectations in a FactSet poll of analysts who had expected a rise of 0.3 percent.

The automotive industry led the way with production volumes up 3.6 percent, Destatis said, while production of industrial machinery also rose 1.3 percent.

“Despite the war in the Middle East and soaring energy prices, industrial production is proving resilient,” ING analyst Carsten Brzeski said.

“Some industries or companies actually seem to have benefited from the war in the Middle East, as Asian competitors were hit harder by the closure of the Strait of Hormuz.”

The Strait of Hormuz was at the centre of tensions during the Middle East war, when Iran blockaded the waterway and a number of commercial vessels came under attack, sending global energy prices sharply higher.

The United States responded with its own naval blockade and later launched retaliatory strikes against Iran after accusing Tehran of targeting commercial shipping.

Maritime traffic resumed after Washington and Tehran signed a memorandum of understanding last month aimed at ending the conflict and reopening the strategic route.

A less volatile comparison by Destatis over the past three months showed production rising just 0.1 percent, and production in May was flat versus the same month last year.

Germany’s economy has barely grown since a burst of pent-up pandemic demand at the end of 2022, hit by high energy prices and increasingly fierce Chinese competition in key export markets.

Overall production volumes in May were eight percent below the monthly average for 2021, according to Destatis data.

The government has approved a $1,004 million loan from the Islamic Development Bank (IsDB) to finance the construction of the second unit of Eastern Refinery Limited (ERL), with officials describing the financing as being on highly non-concessional terms.

The approval for the approximately $1 billion loan was granted yesterday by the Standing Committee on Non-Concessional Loan (SCNCL) at a meeting chaired by Finance Minister Amir Khosru Mahmud Chowdhury at his office in Sher-e-Bangla Nagar.

Officials at the Economic Relations Division (ERD) said the refinery expansion remains a commercially viable and strategically important project for Bangladesh's long-term energy security, despite the relatively expensive financing.
According to documents presented at the meeting, the IsDB financing consists of two packages. Under "Forward Lease 1", the bank will provide $520.59 million, while "Forward Lease 2" will provide $483.10 million. A $0.6 million technical assistance grant will also be provided under the first package.As per an ERD working paper, the loan carries a relatively high financing cost compared with prevailing rates in the international market.

Based on the six-month Term Secured Overnight Financing Rate (SOFR) of 3.84627% as of 5 July 2026, the total mark-up rate is 5.44627%, including a 1.60% spread and risk premium. The loan has a 20-year tenure, including a five-year grace period, with repayments every six months over the remaining 15 years.

The ERD classified both financing packages as "highly non-concessional", with grant elements of minus 3.12% for Forward Lease 1 and minus 3.24% for Forward Lease 2.

Officials said the division had raised several observations before recommending approval. Because repayments will be made every six months, the SOFR benchmark, along with the applicable spread and risk premium, will change over time, meaning both the grant element and the level of concessionality will fluctuate throughout the repayment period.

The ERD also recommended that, before the government on-lends the funds to Bangladesh Petroleum Corporation (BPC) or ERL, the Finance Division should assess BPC's financial capacity to ensure the refinery can service the loan without creating an additional burden on the government.

The division also instructed that all project readiness conditions set by the ERD must be fulfilled before the loan agreement is signed. Repayments are expected to fall on 30 June and 31 December each year.

According to the ERD working paper, Eastern Refinery currently has an annual crude oil refining capacity of 1.5 million tonnes. The second unit will add another 3 million tonnes, tripling total annual refining capacity to 4.5 million tonnes and significantly reducing Bangladesh's dependence on imported refined petroleum products.

Officials said the project preparation mission was completed between 8 and 11 February 2026, followed by the appraisal mission from 8 to 12 March.

Negotiations with IsDB representatives were held on 28 April, an inter-ministerial meeting chaired by the ERD secretary took place on 14 May, and the negotiation minutes were signed on 20 May.

After the IsDB Dhaka Regional Hub sent draft loan agreements on 3 June, the proposal was placed before the 45th SCNCL meeting for approval.

ERD officials said the loan agreement could be signed in mid-August during a visit by IsDB President Dr Muhammad Sulaiman Al Jasser.

An official present at the meeting said the finance minister urged authorities to complete the project within the stipulated timeframe and expressed frustration that it had not been implemented earlier.

According to the official, the minister said an earlier expansion would have better positioned Bangladesh to cope with disruptions to global fuel supplies caused by the Iran-Israel conflict and tensions involving the United States.

Project cost revised

The modernisation and expansion of Eastern Refinery in Chattogram is now estimated to cost Tk31,000.57 crore. Of the total, the government will provide Tk18,566.74 crore, while BPC will contribute Tk12,433.83 crore from its own funds. The project is scheduled to run from January 2025 to June 2030.

The Executive Committee of the National Economic Council (Ecnec) approved the project in principle on 23 December last year at an estimated cost of Tk35,465 crore, subject to conditions. Following further scrutiny, the project cost was reduced by Tk4,465 crore.

According to the Energy Division, Eastern Refinery currently meets only around 20% of Bangladesh's petroleum demand, with the remainder met through imports at significant foreign exchange cost.

BPC officials said the new refinery will produce Euro-5 standard gasoline and diesel while upgrading diesel, motor spirit and octane from the existing refinery to Euro-5 specifications.

Officials added that BPC has already completed the "Installation of Single Point Mooring (SPM) with Double Pipeline" project, enabling the transport of up to 4.5 million tonnes of crude oil annually.

Once operational, the expanded refinery is expected to produce about 400,000 tonnes of furnace oil, 60,000 tonnes of LPG, 600,000 tonnes of Euro-5 gasoline, 1.1 million tonnes of Euro-5 diesel, 200,000 tonnes of lube base oil and 500,000 tonnes of jet fuel each year, reducing import dependence and government subsidy requirements.

Project delayed for years

Eastern Refinery, Bangladesh's only oil refinery, was established in Chattogram in 1968 by France's Technip.

Plans for a second refining unit were first announced in 2010, and the government approved a Tk13,000 crore project in 2013. However, repeated bureaucratic delays, implementation challenges and financing constraints prevented construction from beginning.

BPC revived the project in 2022 using its own financing, by which time the estimated cost had risen to Tk23,000 crore. In early 2024, S Alam Group proposed constructing ERL-2 at a cost of Tk25,000 crore, and the Energy Division approved the proposal on 9 July.

The project was later suspended following the student-led mass uprising in August that led to the fall of the Sheikh Hasina government.

After taking office, the interim government revived the project and initially sought foreign financing. At that stage, the estimated cost stood at Tk36,410 crore, including Tk25,500.77 crore in external financing and Tk10,909.32 crore from BPC.

When external funding did not materialise, the government decided to finance the project through public funds alongside BPC's contribution. The revised estimate initially rose to Tk42,973.70 crore before the Planning Commission reduced the cost following further scrutiny.

Eastern Refinery Limited was approved in 1960 and began commercial production in 1968. At the time, 35% of the company was owned by the former East Pakistan Industrial Development Corporation, another 35% by private businessmen led by former West Pakistan commerce secretary and ICS officer Abbas Khaleeli, while the remaining 30% was held by the UK's Burmah Oil Company.

The government is working to fully digitalise Bangladesh as quickly as possible to improve access to banking and financial services, enhance transparency and reduce the time and costs involved in receiving public services, Finance Minister Amir Khosru Mahmud Chowdhury said today (6 July).

Speaking as the chief guest at the "Innovation Showcasing 2025-26" programme organised by the Financial Institutions Division, the minister said every citizen - including businesses, farmers and workers - must be brought into the country's digital transformation so that the benefits of technology reach all segments of society, reads a press release.

He said the primary objective of digital technology is to simplify service delivery while ensuring greater transparency and accountability.

Referring to the FY27 national budget, Khosru said the government had sought to make development more inclusive by incorporating people from all walks of life, including artisans, artists and singers, adding that technology would play a key role in achieving that objective.

He also said the government has undertaken a broader initiative to increase citizens' participation in political, social and economic activities through the wider use of digital technology.

Highlighting international best practices, the finance minister said a high-level government delegation is currently visiting Estonia to study the country's digital governance and technological advancement.

The delegation includes the ICT adviser, Bangladesh Bank Governor Mostaqur Rahman and other senior government officials, reports UNB.

Khosru urged policymakers and financial institutions not to delay adopting proven international practices that could strengthen Bangladesh's financial sector.

Addressing officials of banks and financial institutions, he said the innovations showcased at the event were encouraging but stressed that continuous improvement would be necessary to achieve the country's digital transformation goals.

He called on banks and insurance companies to assess how many of their customers currently use digital services and take measures to expand that coverage.

The minister also urged branch officials to encourage customers to adopt online services instead of relying on conventional banking methods. Financial institutions should actively inform customers about available digital services through effective communication, he added.

He further emphasised expanding digital services across banks, insurance companies and capital market institutions so that people can access financial services easily from home or while travelling.

Reducing unnecessary travel, costs and harassment for citizens would save time and ultimately improve national productivity, he said.

According to information presented at the event, 329 public services provided by 25 offices and agencies under the Financial Institutions Division have so far been digitalised.

The Bangladesh-German Chamber of Commerce and Industry (BGCCI) yesterday (5 July) hosted a seminar on the FY27 national budget, with business leaders, policymakers and tax officials calling for stable and predictable fiscal policies to boost investment and private sector growth.

The seminar, titled "National Budget 2026–27: Impact on Business, Trade, and Investment", was held at The Westin Dhaka, where participants discussed the budget's key tax measures, customs reforms and their implications for businesses and investors.

Speaking as the chief guest, Anja Kersten, Chargé d'Affaires a.i. of the German Embassy in Bangladesh, emphasised the importance of maintaining a transparent, predictable and business-friendly fiscal environment to support sustainable economic growth and deepen trade and investment ties between Bangladesh and Germany.

Senior officials from the National Board of Revenue (NBR), including First Secretary (Customs: Policy and ICT) Md Tariq Hassan, First Secretary (VAT Policy) Md Mashiur Rahman and Deputy Commissioner of Taxes Nusrat Farzana, attended the event as special guests.

Snehasish Barua, partner at Snehasish Mahmud and Co, presented the keynote paper, outlining the major fiscal measures proposed in the FY27 budget, including changes to tax, customs and VAT policies, and assessing their potential impact on business, trade and investment.

Moderating the session, BGCCI Senior Vice President Md Farooque Khan highlighted the importance of sustained engagement between the government and the private sector to foster a competitive business environment and support long-term economic growth.

BGCCI President Md Rokonuzzaman said the chamber would continue facilitating dialogue between policymakers and businesses while promoting bilateral trade and investment between Bangladesh and Germany.

The seminar also featured an interactive discussion, with participants exchanging views on taxation, customs procedures, VAT issues and other investment-related concerns with NBR officials and the keynote speaker.

The programme concluded with a vote of thanks from BGCCI Director and event chairman Md Jahangir Alam Sharker, who reiterated the chamber's commitment to strengthening public-private dialogue and supporting sustainable economic development.

The country’s plastic industry has slowed sharply following the recent Middle East crisis, as rising raw material prices and weak consumer demand continue to hit manufacturers hard, industry leaders said.

The steep rise in the cost of imported plastic raw materials has severely affected producers, Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA), told journalists at the association’s office in Dhaka’s Paltan yesterday.
Before the conflict, key raw materials were imported at around $800 to $900 per tonne. Prices have now increased to between $1,500 and $1,600 per tonne, he said.

“The sharp rise in raw material costs is putting immense pressure on the industry. Higher production costs are also driving up the prices of finished products,” Shamim said.

The country’s plastic and packaging industry, worth around Tk 60,000 crore annually, recorded monthly sales of about Tk 5,000 crore before the conflict. This has now fallen to around Tk 3,750 crore, a decline of at least 25 percent, according to the BPGMEA.

Shamim said at least 25 percent of customers have reduced their orders since the conflict began, while some segments have seen demand drop by as much as 40 percent.

The packaging segment, which accounts for about 40 percent of the industry, has been the worst affected as demand for fast-moving consumer goods weakens amid lower household spending, he added.

“We are not the end product; we supply other industries,” Shamim said. “When consumers buy less detergent, food or household products, demand for our packaging and plastic components drops immediately.”

According to him, Bangladesh has around 6,000 plastic manufacturing units, of which 4,000 to 4,500 supply products to other sectors, including garments, pharmaceuticals, food processing and beverages. The industry serves around 30,000 businesses in total.

“Many people still think plastic means buckets, mugs and kitchenware. But plastic has become an essential part of industrial production and supply chains,” he said.

He warned that any disruption in the sector would quickly affect the wider economy, as most manufacturing industries depend heavily on plastic packaging and components.

Shamim also alleged that customs authorities often assess imported raw materials at higher values than invoice prices to meet revenue targets, even though such materials are sourced from large international suppliers where under- or over-invoicing is unlikely.

On recycling, Shamim said Bangladesh has a relatively high plastic recycling rate in the region, but investment in waste-to-energy infrastructure remains behind neighbouring countries.

KM Iqbal Hossain, senior vice-president of BPGMEA, said manufacturers have been absorbing much of the increased production costs instead of passing them on to buyers.

“We are negotiating with our clients to raise prices because production costs have increased by at least 30 percent, but we have not yet fully adjusted our prices,” he added.

Industry leaders said higher costs and weak consumer demand are putting severe pressure on profit margins, with many firms struggling to stay viable.

Iqbal also said Bangladesh is lagging in developing waste-to-energy projects. “Countries like Indonesia are rapidly expanding waste-to-energy projects. In Bangladesh, we have been trying to set up even one large-scale waste-to-energy plant for the past five years,” he said.

Despite the slowdown in traditional plastic manufacturing, Shamim said the recycling segment continues to grow and is creating new jobs as businesses place greater focus on sustainability.

Iqbal criticised high industrial land prices, weak incentives and complex regulations, saying these factors are discouraging investment and job creation.

He questioned why industrial plots developed by the Bangladesh Small and Cottage Industries Corporation are sold at prices much higher than acquisition costs, forcing entrepreneurs to spend heavily on land instead of production.
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Comparing with neighbouring countries, Iqbal said governments in India provide industrial land, utilities and incentives to support manufacturing and exports.

He also highlighted challenges faced by plastic and toy manufacturers, saying many key components must be imported because local production is not commercially viable. However, manufacturers still pay commercial import duties on these inputs, reducing competitiveness against producers in countries such as China and Sri Lanka.

The National Board of Revenue’s (NBR) collection of more than Tk360,000 crore during the first eleven months of the fiscal year deserves recognition. At a time when Bangladesh is grappling with mounting fiscal pressures, this performance signals improvement in revenue administration despite a challenging economic environment.

Higher revenue collection strengthens the government’s ability to finance infrastructure, education, healthcare, and social protection while reducing excessive dependence on domestic and external borrowing.
Yet, beyond the headline figure lies a more important policy question: Is Bangladesh pursuing revenue growth in a sustainable manner?

The answer depends not only on how much revenue is collected today, but on whether the country’s revenue strategy is built on realism, efficiency, and trust.

Every year, Bangladesh announces ambitious revenue targets as part of the national budget. While optimism has its place in public finance, persistent gaps between targets and actual collections have become a recurring feature of our fiscal landscape.

When revenue targets consistently prove unattainable, they gradually lose their value as planning instruments. Revenue forecasting must therefore be grounded in economic realities rather than aspirations. Tax collection ultimately reflects economic activity. Ignoring these realities while setting ambitious targets only widens the gap between expectations and outcomes.

A balanced revenue strategy begins with acknowledging the economy’s actual capacity.

Bangladesh continues to have one of the lowest tax-to-GDP ratios among comparable developing economies. However, the real issue is not necessarily tax rates but a narrow tax base and uneven compliance. A small segment of formal businesses and salaried individuals continues to shoulder a disproportionate share of the tax burden, while large parts of the economy remain outside the formal tax net.

Expanding the taxpayer base should therefore become the central objective of tax reform.

Rather than repeatedly imposing additional obligations on compliant taxpayers, policymakers should focus on identifying new taxpayers, formalising informal businesses, strengthening digital record-keeping, and improving data sharing among government agencies. Technology offers opportunities to detect tax evasion while reducing compliance costs for honest taxpayers. Equally important is simplifying the tax system. Businesses are more likely to comply when tax rules are clear, predictable, and consistently applied. A modern tax administration should view taxpayers as partners in national development rather than merely subjects of enforcement.

This is particularly important as Bangladesh seeks greater domestic and foreign investment. Frequent regulatory changes and inconsistent interpretation of tax laws increase business uncertainty and discourage long-term investment. A stable and transparent tax environment ultimately generates more sustainable revenue than short-term collection drives.

Another often overlooked aspect of revenue mobilisation is public trust. Citizens are more willing to pay taxes when they see visible improvements in public services and infrastructure. Revenue collection should therefore be viewed not merely as a fiscal exercise but as part of a broader governance framework where accountability and service delivery strengthen voluntary compliance.

Bangladesh’s development ambitions will require steadily rising public revenues in the coming years. These objectives cannot be financed indefinitely through borrowing alone. The solution lies in building a tax system that is broader, fairer, more efficient, and more trusted.

The recent progress made by the NBR demonstrates that improvements are possible. The next phase of reform should focus less on announcing ambitious collection numbers and more on strengthening institutional capacity, expanding the formal economy, reducing tax evasion, and making compliance easier.

Balanced revenue growth is not about collecting the maximum amount in a single fiscal year. It is about creating a tax system capable of supporting Bangladesh’s long-term economic transformation. Realistic target-setting, efficient administration, and greater taxpayer confidence will ultimately produce more credible fiscal outcomes and a stronger foundation for sustainable economic growth.

Bangladesh is exploring the possibility of issuing China's proposed Panda Bond as an international sovereign bond to establish its presence and begin marketing itself in the global capital market.

The government is forming an inter-ministerial committee to assess the feasibility of issuing the bond and prepare recommendations.

Alongside the conventional US dollar-denominated Eurobond, the committee will review the risks associated with issuing Panda Bonds in Chinese currency, as well as examine the bond's structure, timing and size before making recommendations to the finance ministry.

The previous Awami League government had also considered issuing sovereign bonds. However, it ultimately backed away after taking into account the financial crises experienced by sovereign bond issuers such as Argentina and Sri Lanka. Former Bangladesh Bank governor Dr Ahsan H Mansur has advised that, whether the government opts for a Panda Bond or a Eurobond, any sovereign bond issuance should be undertaken with extreme caution.

Officials at the finance ministry said the issue of issuing a Panda Bond as an international sovereign bond was discussed at a recent meeting on exploring alternative sources of financing, chaired by Finance Minister Amir Khosru Mahmud Chowdhury at the Prime Minister's Office. Following the meeting, the Finance Division prepared a summary seeking the finance minister's approval to form an inter-ministerial committee to examine the proposal.

The committee is expected to include officials from the Finance Division, the Economic Relations Division (ERD), the Bangladesh Bank, the Prime Minister's Office, the Financial Institutions Division, and the Bangladesh Securities and Exchange Commission.

According to the minutes of the meeting held on 20 June, Bangladesh Bank Governor Mostaqur Rahman supported the idea of issuing Panda Bonds in Chinese currency, saying, "Alongside the conventional US dollar-based Eurobond, the possibility of issuing Panda Bonds denominated in Chinese renminbi (RMB) can be explored.

"The first issuance should be relatively small – equivalent to around $50 million – to test market response and keep risks at a manageable level."

Before Prime Minister Tarique Rahman's visit to China, a delegation from the Export-Import Bank of China (Exim Bank) visited Dhaka to discuss the introduction of Panda Bonds in Bangladesh. During the Prime Minister's visit, the Chinese government also included the Panda Bond proposal on the agenda, according to sources.

At the meeting, ERD Secretary Md Shahriar Kader Siddiky said several countries, including Pakistan and Sri Lanka, had issued sovereign bonds. He noted that Bangladesh should consider establishing its footprint in the international capital market.

However, the ERD secretary cautioned that issuing sovereign bonds could raise concerns from the International Monetary Fund (IMF). He added that China would be willing to assist Bangladesh if it decided to proceed with a Panda Bond.

The finance minister said in the meeting that Bangladesh's entry into the international capital market should be viewed positively. He noted that an initiative is underway to establish a Bangladesh Investment Fund for equity investment by the private sector. Once the Hong Kong-based fund is established, it will create opportunities for equity investment in both private enterprises and state-owned companies.

The finance minister also said that alongside the proposed equity fund, the government could continue exploring the possibility of issuing sovereign bonds. He instructed officials to begin internal discussions and institutional preparations.

The meeting also discussed incorporating the possibility of issuing Eurobonds or other international sovereign bonds into the upcoming Medium-Term Debt Strategy, Annual Borrowing Plan and Debt Sustainability Analysis (DSA). Participants agreed that signalling such plans to the market and investors in advance would be appropriate.

Finance Secretary Dr Khairuzzaman Mozumder said the Finance Division had previously been reluctant to pursue sovereign bond issuance because of the associated risks. However, he said the current situation warranted a fresh assessment.

In his view, Bangladesh should improve its sovereign credit rating before making any final decision so that bonds can be issued at favourable interest rates in the international market.

"As this would be Bangladesh's first international sovereign bond issuance, it is necessary to carefully examine the associated risks as well as the bond's structure, timing, currency and denomination before proceeding," the finance secretary added.

Former Bangladesh Bank governor Dr Ahsan H Mansur told TBS that the government had also considered issuing sovereign bonds in 2014-15, when Bangladesh's economic situation and international image were stronger than they are today. However, after observing the debt crises faced by Sri Lanka and Argentina following their sovereign bond issuances, the government abandoned the plan.

He said the biggest risk associated with such borrowing is ensuring the proper management of large amounts of money raised abroad under a sovereign guarantee. It is essential to determine where the funds will be spent and to ensure effective oversight of their use.

"Many countries avoid borrowing from the international capital market because such loans carry commercially determined interest rates. For US dollar-denominated borrowing, the interest rate is generally the US Treasury bill rate plus around 3%. The rate Bangladesh would receive will depend on its international sovereign credit rating," Ahsan H Mansur added.

After years of cautious enforcement in dealing with weak and non-performing listed companies, the Dhaka Stock Exchange (DSE) is now pushing for a comprehensive overhaul of its delisting framework, aiming to clean up a capital market increasingly burdened by "junk" stocks and strengthen investor protection.

The move comes as nearly one-third of listed securities have now been pushed into the Z category, reflecting widespread compliance failures and long-standing operational weaknesses among several firms. Against this backdrop, the bourse has submitted a set of reform proposals to the stock market regulator to make the delisting process more structured, transparent, and enforceable.

At present, stock exchanges have the authority to delist companies that fail to comply with listing regulations. However, market stakeholders say the absence of a clear procedural framework particularly regarding rehabilitation, investor safeguards, and enforcement steps has made action difficult.

As a result, delisting has remained largely inactive despite repeated violations by many listed companies.

Rehabilitation-first approach before delisting

Under the proposed framework, the DSE has suggested introducing a rehabilitation phase before any compulsory delisting. In this stage, struggling companies would be required to submit a detailed operational recovery plan outlining how they intend to restore financial stability and regulatory compliance.

The exchange would monitor the execution of these plans over a specified period. Only if a company fails to implement its recovery roadmap, or if the plan is deemed unfeasible, would compulsory delisting be initiated.

The proposals also identify clear triggers for delisting, including prolonged business closure, failure to declare dividends for extended periods, and repeated non-compliance such as not holding annual general meetings.

Tougher accountability measures for sponsors

Beyond procedural reforms, the DSE has also proposed stricter accountability mechanisms for company sponsors and directors. One of the key recommendations includes conducting special audits to determine the true financial condition of distressed firms and identify individuals responsible for financial irregularities.

If sponsors or directors are found guilty of mismanagement or fund diversion, the exchange has proposed barring them from serving as directors in any other listed company and restricting their access to bank loans.

In more stringent cases, the DSE has suggested provisions to attach or seize personal assets of responsible directors if company funds are found to have been siphoned off mirroring existing legal provisions used in bank loan recovery cases.

Chairman explains rationale for reform

DSE Chairman Mominul Islam said the proposed changes aim to address long-standing gaps in the existing regulatory framework.

"We have proposed amendments to address issues that are not clearly defined in the current delisting rules," he said. "Although the rules allow delisting, they do not clearly outline the process or ensure adequate protection for investors. That is why we have placed these proposals before the regulator."

He emphasised that the reforms are not intended for immediate implementation.

"This is essentially an upgrade of the system. It will not be enforced right away. Once the market becomes more vibrant and new listings increase, we will proceed with delisting in a structured manner," Mominul Islam added.

The chairman also stressed a preference for negotiated exits over forced delistings.

According to him, mutual delisting where sponsors voluntarily buy back shares would be prioritised to avoid market disruption.

"We are prioritising mutual delisting over compulsory delisting. The idea is to ensure a win-win outcome for both sponsors and investors," he said.

He added that delisting decisions would only be taken once a company is deemed genuinely non-viable after rehabilitation efforts are exhausted.

Z-category stocks surge after stricter rules

According to DSE data, out of 360 listed securities excluding mutual funds and corporate bonds, 196 are in the A category, 75 in the B category, and 125 in the Z category.

The sharp rise in Z-category stocks followed a regulatory directive issued in May 2024, which introduced stricter classification criteria for issuer companies.

Before the directive, the number of Z-category stocks stood at around 30, but increased sharply as companies were downgraded for failing to meet compliance requirements.

Market observers say the proposed reforms, if implemented effectively, could mark a significant shift in Bangladesh's capital market discipline potentially removing long-standing weak assets while improving transparency and investor confidence.

Bangladesh’s foreign exchange reserves stood at $37.85 billion, according to the latest data released by the Bangladesh Bank (BB) on Monday.Bangladesh Politics News

The central bank said that under the International Monetary Fund’s (IMF) Balance of Payments and International Investment Position Manual (BPM-6) accounting standard, the country’s reserves were recorded at $33.20 billion.

Officials noted that the reserve position reflects the country’s external sector stability amidst ongoing global economic uncertainties.

Oil prices fell by more than 1 percent on Monday after Opec+ agreed to further increase its output targets from August while exports from key producers via the Strait of Hormuz are recovering, potentially adding to global supplies.

Brent crude futures fell $1.02, or 1.41 percent, to $71.10 a barrel at 0756 GMT after settling 0.45 percent higher on Friday. US West Texas Intermediate crude was at $67.89 a barrel, down 80 cents, or 1.16 percent. There was no settlement for WTI on Friday as US markets were closed ahead of the Independence Day holiday on Saturday.

Both contracts were little changed last week after mostly falling over the past few weeks, as investors kept a close eye on talks between the US and Iran over the fate of shipping through the Strait of Hormuz while keeping tabs on the recovery in Gulf oil exports.

The Organization of the Petroleum Exporting Countries and their allies including Russia agreed on Sunday to further increase output targets by 188,000 barrels per day from August, on top of similar increases for June and July.

However, the increase has remained largely on paper because of the US-Israeli war on Iran, which closed the Strait of Hormuz to tanker traffic for key Opec producers, including Saudi Arabia, Kuwait and Iraq, capping their output.

“They are selling into a falling market, offering little hope of an imminent price recovery,” PVM analysts said in a note. “However, lower oil prices will undoubtedly stimulate demand further down the line.”

Gulf oil exports in June jumped more than 3 million barrels from May to exceed 10 million barrels per day, although volume remained 40 percent below pre-war levels, data showed.

“We now expect global oil demand to contract by 1.5 million barrels per day in 2026, reflecting a sharper-than-expected downturn in Q2, when year-on-year declines could reach 4 million bpd based on preliminary data,” ANZ said.

“However, we expect demand losses to moderate in the second half of the year as supply improves and some deferred consumption returns,” the bank added.

Abu Dhabi National Oil Company has sold about 16 million barrels of Emirati crude at wider discounts in a fifth spot tender issued since June, trade sources said, underscoring a surge in spot supply.

In addition, oil shipments from Russia’s western ports hit a record high in June and are expected to maintain that level in July as its refineries have been damaged in drone attacks by Ukraine that have forced Moscow to boost crude exports, industry sources said.

Uttara Finance and Investments Limited has r restated its 2019 financial statements, posting a consolidated net loss of Tk308 crore in place of an earlier reported profit after a Bangladesh Bank-ordered forensic audit uncovered widespread irregularities in the non-bank financial institution's accounts.

The revised financial statements, published through the Dhaka Stock Exchange (DSE) today (6 July), showed a consolidated loss per share (EPS) of Tk23.43, a restated net asset value (NAV) per share of Tk29.55 and net operating cash flow per share (NOCFPS) of Tk13.24 for the year ended 31 December 2019.

The restatement marks a sharp reversal from the original audited accounts, which had reported a consolidated net profit of Tk118 crore in 2019, up 14% from the previous year. Based on those results, the board had recommended a 15% cash dividend and a 5% stock dividend.

However, Bangladesh Bank later rejected the financial statements audited by SF Ahmed and Co after a special audit by KPMG Bangladesh uncovered discrepancies involving about Tk5,300 crore in the company's financial records.

The audit, conducted under the central bank's Resolution and Recovery Department (RRH), prompted the company to restate its financial statements in line with regulatory directives.

Uttara Finance also released revised financial statements for 2020 and 2021, showing continued financial deterioration.

For the year ended 31 December 2020, the company reported a consolidated loss per share of Tk35.98, while NAV per share turned negative at Tk9.26. Net operating cash flow per share stood at Tk12.04.

In 2021, it posted a consolidated loss per share of Tk23.48. NAV per share further declined to negative Tk32.74, while net operating cash flow per share fell to negative Tk20.38.

The company told the stock exchange that AGMs for 2020 and 2021 have become time-barred due to delays in finalising audited financial statements. It plans to seek High Court permission to hold the overdue AGMs after completing and auditing its pending financial statements for 2022-2025. Record dates and AGM schedules will be announced after court approval.

Following the financial irregularities, Bangladesh Bank dissolved the NBFI's sponsor-director board in 2022 and appointed a new board to restore governance, transparency and accountability.

The company remains in the "Z" category on the stock exchange for failing to hold annual general meetings within the stipulated timeframe.

As of June 2026, sponsors and directors held 44.44% of the company's shares, institutional investors 31.71%, foreign investors 7.82% and general investors 16.03%.

The total market capitalisation of the Dhaka Stock Exchange (DSE) crossed the Tk7 lakh crore mark today (6 July) for the first time in more than three months, signalling a continued recovery in investor confidence amid sustained gains in the country's stock market.

The market capitalisation of the country's premier bourse rose to over Tk7 lakh crore, the highest level since 16 March, when it stood at Tk7.06 lakh crore. The milestone comes as the benchmark DSEX index has extended its recent rally, supported by expectations of market-friendly regulatory reforms and a series of policy initiatives aimed at strengthening the capital market, according to analysts.

They said reclaiming the Tk7 lakh crore threshold carries strong psychological significance, reflecting a rebound in the overall value of listed companies as investors continue to accumulate fundamentally strong blue-chip and large-cap stocks after a prolonged bearish spell.

The DSEX advanced 12 points, or 0.22%, to close at 5,799 today, hovering just below the key 5,800-point resistance level. The blue-chip DS30 index also edged up one point to settle at 2,192.

Market breadth remained slightly positive, with 166 issues advancing, 155 declining and 71 remaining unchanged.

Despite the gains, trading activity moderated. Daily turnover declined 7% to Tk1,416 crore from the previous session, indicating some investors opted to book profits following the market's recent rally.

According to Sheltech Brokerage Limited's daily market review, selective buying in heavyweight and fundamentally strong stocks continued to drive the market higher.

The brokerage said optimism over recent policy measures aimed at deepening the capital market and improving transparency supported investor sentiment. Although profit-taking emerged midway through the trading session, sustained buying interest in selected large-cap stocks outweighed the selling pressure, allowing the benchmark index to extend its winning streak.

Sector-wise, the textile sector accounted for the largest share of turnover at 16.8%, followed by insurance at 12.67% and pharmaceuticals at 12.17%.

An analysis by BRAC EPL Stock Brokerage showed that most major sectors ended in positive territory. The fuel and power sector led the gains, rising 1.08%, followed by telecommunications, which added 0.63%, and food and allied, up 0.57%.

The non-bank financial institution (NBFI) sector was the day's worst performer, slipping 0.25% as investors remained cautious over the sector's ongoing liquidity concerns.

The positive momentum also extended to the Chittagong Stock Exchange (CSE). The Selective Categories' Index (CSCX) climbed 42 points to 9,488, while the All Share Price Index (CASPI) gained 73 points to close at 15,489. However, turnover at the port city bourse plunged 75% to Tk16.59 crore.

Much of the discussion surrounding Bangladesh's FY2026–27 energy budget has centred on a single headline figure: the reduction in overall budgetary allocation to the power and energy sector.

Yet an exclusive focus on the size of the allocation risks overlooking a far more important question: whether the budget provides a credible roadmap for addressing the structural challenges that have long constrained the country's energy sector.

The significance of this year's budget lies less in the scale of its allocation than in the direction of its policy priorities. The budget signals a gradual yet important transition from an import-dependent, subsidy-intensive and increasingly costly energy model towards a more diversified, secure and financially sustainable energy system. Viewed through this lens, the FY27 budget represents a strategic realignment of Bangladesh's energy policy.

More importantly, the budget reflects a growing recognition that energy policy is no longer merely about keeping the lights on; it is fundamentally linked to industrial competitiveness, export performance, investment attraction, employment generation and macroeconomic stability.

For an economy aspiring to accelerate industrialisation, strengthen its position in global value chains and sustain higher economic growth, reliable and affordable energy is no longer a supporting factor; it is a prerequisite.

The broader significance of the budget therefore extends well beyond the energy sector. Its success will ultimately be measured not only by megawatts generated or infrastructure built, but by its ability to strengthen economic resilience, enhance industrial productivity and reduce vulnerabilities associated with excessive dependence on imported energy.

Energy security as economic security

Energy security can no longer be viewed as a standalone sectoral concern; it has become a fundamental pillar of economic security. Bangladesh currently imports approximately 95% of its petroleum products, a significant share of its natural gas demand in the form of LNG, and nearly all of its LPG requirements. As a result, fluctuations in global energy markets have direct implications for inflation, foreign exchange reserves, fiscal stability and overall economic growth.

Recent geopolitical tensions in the Middle East, the aftermath of the Russia–Ukraine conflict and recurring disruptions to global supply chains have underscored a critical reality: countries with high levels of energy import dependence are increasingly vulnerable to external economic shocks. For Bangladesh, the challenge is not simply securing adequate energy supplies, but ensuring that energy remains affordable, reliable and resilient in an increasingly uncertain global environment.

In this context, the government's emphasis on domestic gas exploration, offshore bidding, refinery expansion, LNG infrastructure development and the creation of strategic energy reserves reflects a broader effort to strengthen the country's energy security architecture. These initiatives should therefore be viewed not merely as energy-sector projects, but as strategic investments aimed at enhancing economic resilience, reducing exposure to external shocks and supporting long-term sustainable growth.

Domestic gas: The foundation of affordable and secure energy

For Bangladesh, no energy source currently offers greater economic value than domestically produced natural gas. Every additional unit of domestic gas production reduces LNG imports, conserves foreign exchange, lowers electricity generation costs and eases the fiscal burden associated with energy subsidies.

With pressures on the balance of payments remaining elevated and energy demand continuing to grow, increasing domestic gas production remains one of the most effective ways to strengthen energy security and reduce exposure to external shocks.

The budget's emphasis on Bapex's exploration programme, including the drilling of 69 new wells, 31 workover operations, expanded seismic surveys and the procurement of new exploration rigs, represents one of its most strategically important initiatives. It signals a renewed policy focus on developing domestic energy resources rather than relying excessively on imported fuels to meet growing energy needs.

Exploration, of course, carries inherent risks, and not every well will lead to a commercial discovery. Yet countries that fail to invest in exploration effectively guarantee continued dependence on imported energy. From that perspective, the budget's renewed commitment to domestic resource development is both economically prudent and strategically necessary.

Offshore exploration: Bangladesh's next energy frontier

Few developments are likely to have a greater impact on Bangladesh's long-term energy future than a significant offshore gas discovery. Recognising this opportunity, the government has revised the Production Sharing Contract (PSC) framework and reopened 24 offshore blocks, nine shallow-water and 15 deep-water blocks, to international investors.

However, attracting major international energy companies will require more than competitive contract terms. Investors also place considerable emphasis on policy consistency, regulatory efficiency, access to high-quality geological data, profit repatriation mechanisms and foreign-exchange convertibility.

Encouragingly, the government appears to be pursuing a dual-track strategy: attracting international expertise and capital while simultaneously strengthening BAPEX's own exploration capabilities. This balanced approach can help combine global experience with domestic institutional development.

At a broader level, offshore exploration is not merely an energy initiative; it is a strategic investment in Bangladesh's future economic and energy security.

Renewable energy: From policy ambition to economic opportunity

Perhaps the most forward-looking aspect of the FY27 budget is its strong and sustained support for renewable energy. The government has proposed tax exemptions for the renewable energy sector until 2035, duty waivers on key solar components, tax incentives for battery manufacturing and energy storage technologies, and tax rebates for renewable energy users.

More importantly, it has reaffirmed ambitious targets of generating 20% of electricity from renewable sources by 2030 and between 30% and 50% by 2050.

Collectively, these measures signal a broader shift in policy thinking. For much of the past two decades, Bangladesh's energy strategy was primarily focused on expanding electricity generation capacity to meet rapidly growing demand. The challenge today is fundamentally different. The objective is no longer simply to generate more electricity, but to produce it in a manner that is more affordable, sustainable, resilient and economically efficient.

The success of the budget will ultimately be measured not only by megawatts generated or infrastructure built, but by its ability to strengthen economic resilience, enhance industrial productivity and reduce vulnerabilities associated with excessive dependence on imported energy.

The FY27 budget therefore reflects the early foundations of a broader transition from energy expansion to energy transition.

The significance of this transition extends well beyond its environmental benefits. For a country that remains heavily dependent on imported fuels, renewable energy is increasingly becoming an economic necessity as much as an environmental imperative. Diversifying the energy mix can reduce exposure to volatile international energy markets, strengthen long-term energy security and improve economic resilience.

At the same time, renewable energy presents a significant economic opportunity. The expansion of solar power, battery storage, energy management systems and associated supply chains could stimulate new investment, encourage technology transfer and create green employment opportunities.

Why grid modernisation matters

Achieving renewable-energy targets will require a comprehensive transformation of the energy system, not merely the addition of new generation projects. A modern energy system depends not only on how electricity is produced, but also on how efficiently it is transmitted, distributed, stored and managed.

As the share of renewable energy increases, investments in smart grids, battery storage, advanced transmission infrastructure and rooftop solar integration will become increasingly important. The next phase of Bangladesh's energy transition will therefore be less about building additional power plants and more about modernising the systems that connect, distribute and manage electricity.

Rooppur and Bangladesh's future energy mix

Another significant development highlighted in the budget is the anticipated integration of the first 1,200 MW unit of the Rooppur Nuclear Power Plant into the national grid. This represents an important milestone in Bangladesh's efforts to diversify its energy mix and establish a more balanced and resilient power system. Unlike solar and wind power, nuclear energy is not weather-dependent, while its exposure to international fuel-market volatility is generally lower than that of gas-fired generation.

As Bangladesh plans for the coming decades, a balanced energy portfolio combining domestic gas, renewable energy, nuclear power and regional electricity trade is likely to provide the most resilient and cost-effective pathway for meeting growing energy demand.

Power sector reform: The missing piece of long-term sustainability

The budget also acknowledges a critical reality: achieving energy security will ultimately require a financially sustainable power sector. Annual subsidies in the power and energy sector now exceed Tk40,000 crore. While subsidies have played an important role in maintaining affordability and supporting economic activity, their continued expansion is neither fiscally desirable nor economically sustainable.

Given these realities, the government's emphasis on reviewing capacity payments, reassessing power purchase agreements (PPAs), adopting least-cost generation principles and promoting competitive bidding represents an important step towards improving efficiency and strengthening financial discipline. These measures have the potential to reduce unnecessary costs, improve resource allocation and ensure that future investments deliver greater value for both consumers and taxpayers.

The challenge, however, is not simply to reduce subsidies, but to do so in a manner that preserves affordability, protects vulnerable consumers and maintains industrial competitiveness.

EVs and the future of energy demand

The budget's support for electric vehicles (EVs) deserves particular attention. While EV incentives are often viewed primarily through an environmental lens, they are equally important from the perspectives of energy security and economic efficiency.

The transport sector remains one of the largest consumers of imported petroleum products. Gradual electrification, particularly of public transport, could reduce dependence on imported diesel, improve urban air quality, lower carbon emissions and ease pressure on foreign exchange reserves.

Viewed through a broader policy lens, the expansion of electric mobility represents not merely a transformation of the transport sector, but a strategic component of Bangladesh's efforts to strengthen energy security, reduce dependence on imported fuels and advance the transition towards a cleaner, more resilient and sustainable energy future.

The bigger picture: From energy expansion to energy transition

The FY27 energy budget is not without its challenges. Important hurdles remain, including project implementation, financing constraints, regulatory reforms, institutional capacity and the need to sustain investor confidence. Yet despite these challenges, the broader policy direction is increasingly clear.

The budget seeks to bring together energy security, domestic resource development, renewable energy expansion, fiscal discipline, technological modernisation and sectoral governance within a single strategic framework.

Its significance therefore lies not in the size of the allocation, but in the vision it articulates for the future of Bangladesh's energy sector. At its core, the budget reflects a growing recognition that energy policy and economic policy are increasingly inseparable. Energy security, industrial competitiveness, export performance, investment attraction and macroeconomic stability are now deeply interconnected policy objectives.

If effectively implemented, the FY27 budget may ultimately be remembered not for the size of its allocation, but for marking the beginning of Bangladesh's transition towards a more secure, competitive and sustainable energy future, one that supports industrial transformation, strengthens economic resilience and enhances long-term growth prospects.

Inflation fell slightly in June but still remained above 9%, extending a three-month streak of elevated price pressures.

According to the latest data released by the Bangladesh Bureau of Statistics (BBS) today (6 July), point-to-point inflation at the national level stood at 9.16% in June, down from 9.42% in May. In preceding two months, i.e in March and April, the rate stood at 8.71% and 9.02% respectively.

In June last year, the rate was 8.48%.

Although the revised budget for FY2025-26 targeted average inflation at 7%, the goal was not achieved.

According to BBS, the 12-month moving average inflation for the period from July 2025 to June 2026 stood at 8.68%, down from 10.03% during the corresponding period from July 2024 to June 2025.

The BBS report shows that both food and non-food inflation declined in June. Food inflation fell to 8.60% in June from 9.06% in May, while non-food inflation eased to 9.61% from 9.71%.

Food inflation was 7.39% in June 2025, rising to 8.60% over the past year. During the same period, non-food inflation increased from 9.37% to 9.61%.

Explaining the slight decline in June inflation, Dr Mustafa K Mujeri, Executive Director of the Institute for Inclusive Finance and Development (InM), said the fall could largely be attributed to seasonal factors.

"First, the modest decline in inflation in June can largely be regarded as a seasonal effect. At this time of the year, supply generally improves, particularly for food items. As a result, market pressures ease somewhat and inflation temporarily declines. Therefore, it is reasonable to explain the decline in both food and non-food inflation primarily by seasonal factors," he said.

However, he cautioned that the decline should not be interpreted as a lasting shift.

"For most of the current fiscal year, inflation has remained persistently high and has not declined significantly. Overall, it has followed either an upward or consistently elevated trend, clearly indicating that the government has failed to achieve its inflation target," he added.

Mujeri said that despite the slight decline, inflation remained at an uncomfortably high level.

"Although inflation has eased somewhat, it is still too high to provide any real relief. The cost of living remains under considerable pressure because the current rate is still well above a desirable or tolerable level."

He stressed that effective measures were urgently needed to bring inflation under control.

"It will not be enough to rely solely on the central bank's monetary policy. Although the policy interest rate has been maintained at 10%, stronger coordination is needed through supply-side management, fiscal policy and market supervision. A comprehensive and robust policy response will be essential if the government is to achieve its target of bringing inflation down to 7.5%."

Mujeri also noted that fuel prices had contributed to inflationary pressures.

"Although the fuel sector has stabilised somewhat and prices have been adjusted in line with the market, the full impact has not yet been reflected in the economy. The effects of higher fuel prices usually take time to filter through, so they may become more evident in the coming months."

Professor Dr Sayema Haque Bidisha of the Economics Department at the University of Dhaka said June's modest decline should not be interpreted as a significant improvement.

"While it is a positive sign, it would be premature to describe it as a lasting trend. We need to observe the situation over the next one or two months to determine whether this is merely a temporary fluctuation or the beginning of a sustained decline. If inflation continues to fall consistently, that would certainly be encouraging."

Rural inflation falls to 9.23%

Inflation in rural areas also eased slightly in June, although it remained elevated.

According to BBS, point-to-point inflation in rural Bangladesh fell to 9.23% in June from 9.48% in May.

Food inflation in rural areas declined to 8.52% from 8.95%, while non-food inflation stood at 9.98%, virtually unchanged from the previous month.

Urban inflation declines to 9.01%

Inflation in urban areas also remained high in June despite a slight decline.

The BBS report showed that point-to-point inflation in urban areas fell to 9.01% in June from 9.25% in May.

Urban food inflation declined to 8.76% from 9.29%, while non-food inflation eased to 9.16% from 9.24%.

Wage growth continues to lag inflation

At the national level, point-to-point wage growth stood at 8.18% in June, down slightly from 8.21% in May.

According to BBS, wage growth has remained below the inflation rate for 52 consecutive months.

Bangladesh's export competitiveness is coming under increasing pressure ahead of its graduation from the least- developed country (LDC) status due to uncertainty over post-graduation market access, tougher compliance requirements, and new free-trade agreements (FTAs) signed by competing exporting countries, according to the Research and Policy Integration for Development (RAPID). Geographic

Weak infrastructure, high production costs, inefficient logistics, and slow export diversification are further constraining export growth, it says.

With Bangladesh preparing for LDC graduation, the research organisation has called for an urgent and coordinated competitiveness reform programme.

The observations came in a keynote paper presented at a workshop titled "LDC Graduation and Trade Competitiveness" and held at the National Press Club in the capital on Monday.

The presentation was delivered by RAPID Chairman Dr Mohammad Abdur Razzaque.

Speaking as the chief guest, Information and Broadcasting Minister Zahir Uddin Swapon called for making the most of the possible three-year LDC graduation extension by strengthening export competitiveness, implementing policy reforms, and preparing for post-LDC challenges.

He also stressed that sustainable development would not be possible without economy-friendly politics.

" Politics must support the economy. Otherwise, discussions on these issues will remain merely theoretical," he said.

The minister said although Bangladesh had not yet formally graduated from the LDC category, effective preparations must begin immediately to address the challenges in the export sector.Politics

Those challenges were expected to intensify after graduation, he added.

Swapon noted that the government had applied to the relevant United Nations committee in February this year to defer the graduation until November 2029.

The additional period, he said, should not be viewed as an opportunity for delay but as a window to complete the necessary preparations for a smooth transition.

"The government's policymakers and relevant officials are already working on the issue," he said, adding that if the extension was approved, it would facilitate policy reforms, boost export growth, remove administrative bottlenecks, and help the country better adapt to the post-LDC environment.

Presenting the keynote, Dr Razzaque said Bangladesh's export sector was entering a far more challenging global trading environment as competition intensified and preferential market access gradually eroded.

He noted that competitors such as India and Vietnam were expanding their network of free trade agreements, strengthening their position in key export destinations, including the European Union, while Bangladesh risked losing its traditional competitive edge after graduation.Economic Policy Reviews

He warned that the withdrawal of duty-free market access following graduation could expose Bangladeshi exports to higher tariffs, undermining their price competitiveness unless the country undertook comprehensive reforms.

At the same time, he observed that global trade was increasingly being shaped by environmental, climate, and labour-related standards, making compliance an essential requirement for sustaining market access.

According to Dr Razzaque, Bangladesh can no longer rely solely on low production costs.

Enhancing productivity, improving trade competitiveness, and meeting evolving sustainability and compliance requirements would be critical to maintaining export growth in the post-LDC era, he said.

Doulot Akter Mala, president of the Economic Reporters' Forum (ERF), attended the programme as the guest of honour.

She stressed the need for urgent strategic preparations ahead of graduation, saying the absence of a revised transition strategy, declining foreign direct investment (FDI), and weak competitiveness remained major concerns.Geographic Reference

Mala also called for restoring business confidence through stable policies, reducing bureaucratic hurdles, strengthening research and development, and aligning budgetary commitments with the country's economic realities.

Dr M Abu Eusuf, executive director of RAPID, delivered the address of welcome.