The Asian Development Bank (ADB) and the government of Bangladesh on December 22 signed loan agreements worth $688 million to upgrade the 35-kilometre railway line from Chattogram to Dohazari, aiming to strengthen rail connectivity along the country's key southern corridor.

The financing will support the South Asia Subregional Economic Cooperation-Chattogram-Dohazari Railway Project, which also includes the construction of a 2.5-kilometre railway bypass.

Once completed, the bypass will allow direct train services from Dhaka to Cox's Bazar without stopping at Chattogram station, improving travel time and operational efficiency.

According to a press release, the project seeks to establish seamless connectivity along the Dhaka-Chattogram-Cox's Bazar corridor, a critical route for passenger and freight movement, thereby boosting regional transport efficiency and economic growth.

The agreements were signed at a ceremony held at the Economic Relations Division (ERD) office in Dhaka by ERD Secretary Md Shahriar Kader Siddiky and ADB Country Director for Bangladesh Hoe Yun Jeong.

ADB officials said the project would enhance the resilience, reliability and efficiency of rail services between Dhaka and Cox's Bazar, supporting a shift from road to rail transport.

The improved connectivity is expected to stimulate economic activities along the corridor, with particular benefits for tourism and fisheries in the Cox's Bazar region.

As part of the Trans-Asia Railway network, the Dhaka-Chattogram-Cox's Bazar corridor currently carries around 32 percent of passenger traffic and 55 percent of freight traffic, highlighting its strategic importance for national and regional economic integration.

Key project components include track elevation, improved drainage systems, modern signalling, dual-gauging of tracks and the procurement of 30 energy-efficient locomotives to reduce fuel consumption and emissions.

The project will also strengthen Bangladesh Railway's operational capacity through staff training and upgrade three stations with inclusive, user-friendly facilities and space for private sector commercial activities.

Despite 25 years of foreign loans for local governance and capacity-building projects, Bangladesh has seen limited gains while debt burdens and dependence on external financing have increased manyfold, according to an assessment by the Economic Relations Division (ERD).

In a recent meeting, ERD officials flagged problems with projects under the Local Government Division (LGD) and objected to initiating or continuing them in phases, citing high interest rates and the ineffective outcomes of past initiatives.

For example, the Tk1,151.5 crore Jica-funded Upazila Governance and Development Project (UGDP-I) had a concessional interest rate of 0.01%, whereas the proposed Tk2,310 crore UGDP-II, if undertaken, will carry a much higher rate of 2.35%.

Officials also pointed to the World Bank-backed Recovery and Advancement of Informal Sector Employment (RAISE) project involving Tk2,440 crore, which failed to generate employment, providing only one-time handouts to some people, according to meeting minutes seen by TBS.

The meeting was held on 11 December at the ERD conference room in Sher-e-Bangla Nagar, Dhaka, marking the second fact-finding mission kickoff for the proposed Jica-funded UGDP-II, where ERD strongly objected to taking new foreign loans for the project's second phase.

The session was chaired by ERD Additional Secretary and America–Japan Wing Chief Mohammad Mizanur Rahman, with the Jica delegation led by Fujii Teruaki.

During the meeting, the ERD said multiple donor-funded projects under the Local Government Division (LGD) – including three phases of the WB-financed Local Governance Support Project (LGSP), the UNDP-supported Union Parishad Governance Project (UPGP), and the Jica-funded Upazila Governance and Development Project (UGDP-I) – have fallen short of delivering structural or sustainable reforms.

Large portions of loan funds were spent on consultants, workshops, seminars, and training activities, while tangible administrative reform and durable capacity-building at the local level remained limited, ERD officials said, noting that similar objectives could have been achieved more efficiently through domestic financing and policy reforms rather than foreign borrowing.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, told TBS, "Spending on capacity building or local governance does not produce direct financial returns. When such spending is financed through foreign loans, the risk increases significantly because the liability is in foreign currency."

"Without a clear answer to whether a project will increase foreign exchange inflows or reduce outflows, taking foreign loans cannot be justified," he added.

The ERD concluded that due to policy gaps, many projects suitable for domestic financing are instead being implemented with foreign loans. This trend, it warned, is making external debt increasingly costly and heightening future repayment risks – posing a growing concern for the country's financial stability.

Why is ERD against UGDP-II

According to ERD officials, UGDP-I involved Jica loans of Tk1,151.5 crore, while the proposed UGDP-II seeks $188.67 million (around Tk2,310 crore) at a sharply higher interest rate of 2.35%, compared with UGDP-I's concessional 0.01%.

The ERD considers such high-interest borrowing unjustifiable for governance and capacity-building projects that do not generate direct financial returns.

Jica stated that UGDP-II builds on lessons from UGDP-I (2015–2025) and aims to institutionalise performance-based grants for upazila parishads and strengthen the capacity of elected representatives and officials.

However, the ERD questioned the project's economic basis.

Quoting the meeting chair, official minutes noted: "Countries that succeeded at the early stages of development did not rely on loans for governance reform. Continued dependence on foreign borrowing will prevent the Local Government Division from building its own sustainable systems and governance structures."

The ERD also argued that the need for a second phase after a decade of UGDP-I casts doubt on the first project's effectiveness. Consequently, the ERD has instructed the Local Government Division to submit a consolidated evaluation of some projects – LGSP, UPGP, ELAG, and UGDP-I, and advised exploring government funding rather than foreign loans for UGDP-II.

WB-backed RAISE project under scrutiny

Similar concerns have been raised regarding the World Bank–funded Recovery and Advancement of Informal Sector Employment (RAISE) project. The ERD believes the project has failed to deliver sustainable employment outcomes, despite providing one-time incentives of Tk13,500 to migrant workers who returned home due to the Covid-19 pandemic.

Beneficiaries say the assistance was too small to create income-generating activities. Anjana Khatun, a returnee migrant from Sirajganj Sadar Upazila, said the money was quickly spent on household necessities.

Sajjadur Rahman from Sharsha upazila in Jashore, who returned from Italy, said he attempted to start a small business with government support but found the amount insufficient to sustain any meaningful venture.

Running from October 2021 to June 2026, the RAISE project involves $200 million in World Bank loans. Of this, $150 million is being implemented through Palli Karma-Sahayak Foundation (PKSF), while nearly $50 million is allocated to the Wage Earners' Welfare Board (WEWB).

The ERD approved the PKSF portion, as the organisation disburses funds to beneficiaries at fixed interest rates, allowing the government to recover the loan. However, officials objected to an additional $75 million loan proposal for WEWB, noting that the funds are distributed as non-recoverable grants, making the loan financing policy inconsistent.

ERD officials said direct communication with beneficiaries in 20 districts showed that such small incentives were largely ineffective. As a result, the project's core objectives are not being met, while future debt repayment obligations continue to grow.

Zahid Hussain said social assistance and grants for the poor do not generate financial returns and should therefore be funded from domestic revenue rather than foreign loans.

Deshbandhu Sugar Mills Ltd, a sugar industry pioneer in South Asia, collapsed with a hefty debt burden that forced it to shut down operations, leaving eight lenders exposed to over Tk3,300 crore in outstanding loans.

According to Bank Asia, one of the eight lenders, and its internal inspection findings, funds were diverted to Deshbandhu's sister concerns, creating an equity shortfall of over Tk1,300 crore as of June 2023. This means the company now has no remaining equity, and the banks are unlikely to recover the Tk1,300 crore even after selling its assets.

An equity shortfall occurs when a company's liabilities exceed its assets, meaning the company effectively has negative net worth.

In this context, Bank Asia had reported Deshbandhu Sugar as a "wilful defaulter" to the Bangladesh Bank several months ago after finding "fund diversion." The central bank's policy committee also rejected the company's loan rescheduling proposal, citing the "wilful defaulter" status.

However, following an appeal from the Deshbandhu Group, the Bangladesh Bank has instructed Bank Asia to withdraw the wilful defaulter report – a move which has raised questions among bankers about the effectiveness of the wilful defaulter framework, as the same bank board that reported the client must now approve its removal.

When contacted, Sohail RK Hussain, managing director of Bank Asia, told TBS the bank had filed a criminal case against the borrower after its internal inspection revealed that sales proceeds were missing against working capital. Their internal inspection found that the business had "diverted funds" from cash flow to its seven sister concerns instead of repaying bank loans.

"The company has no current assets against a bank liability of Tk3,320 crore. We have been informed that Deshbandhu Sugar has been temporarily shut down since at least January 2025," he added.

Bank Asia had previously rescheduled Deshbandhu's loans four times, but the company failed to continue payments and defaulted again. The bank also said it had sought travel bans on the business owners, Golam Mostafa and Golam Rahman, through the court.

Other banks exposed to Deshbandhu's loans include Southeast, Mercantile, NCC, First Security Islami, Agrani, Social Islami, and Islami Bank.

Meanwhile, First Security and Social Islami have merged with three other weak banks, while Islami Bank continues to struggle with huge defaulted loans exceeding Tk 1 lakh crore.

Deshbandhu Group, however, did not comment on the allegation of fund diversion.

When contacted, Deshbandhu Group Managing Director Golam Rahman said he is sick and unable to talk.

Additional Managing Director Brig Gen (Retd) Zakir Hossain said they plan to reschedule their loans by this December, as the central bank has already instructed Bank Asia to lift the wilful defaulter status.

When asked why the business was unable to repay the loans, he said he could not explain. He also declined to comment on how Deshbandhu Group continued investing in sister concerns despite being unable to service its debt.

The account performance of Deshbandhu Sugar began to deteriorate in 2012, and the company started rescheduling loans from 2013, according to banks.

However, in 2024, the Deshbandhu Group began setting up a 100% export-oriented jumbo bag manufacturing plant in Narsingdi's Palash upazila with an investment of Tk300 crore.

The group proceeded with the new plant even as another sister concern, Deshbandhu Polymer Limited — a manufacturer of polypropylene (PP) woven bags for the local market and exports — was incurring losses.

In a qualified audit opinion for the year ended 30 June 2025, the auditor noted that Deshbandhu Polymer reported sales of Tk20.48 crore against a cost of sales of nearly Tk30 crore, resulting in a gross loss of Tk9.45 crore. The gross loss margin of 46.2% is unusually high for the company's line of business and raises concerns about the appropriateness of inventory valuation and the allocation of manufacturing costs.

Why BB instructed lifting Deshbandhu's wilful defaulter status

Bank Asia reported Deshbandhu Sugar Mills as a "wilful defaulter" to the Bangladesh Bank in December 2024, following the central bank's reporting criteria. Subsequently, the policy committee of the Bangladesh Bank rejected Deshbandhu Group's rescheduling proposal in May 2025.

However, on 8 December, Bank Asia received a letter from the Bangladesh Bank instructing the bank to take necessary measures to lift the wilful defaulter status of Deshbandhu Sugar Mills. The letter cited the customer's goodwill and intent to repay the loans as the reason for removing the company from the wilful defaulter list.

The instruction also required the bank to update the customer's Credit Information Bureau (CIB) status according to the bank-client relationship and to withdraw the name from the wilful defaulter list, subject to board approval.

This move raised a question among bankers: when the central bank instructs a bank to lift a client's wilful defaulter status, what is the point of board approval if the same board had originally placed the name on the list?

When asked on what grounds the Bangladesh Bank instructed the removal of Deshbandhu's name from the wilful defaulter list, Arif Hossain Khan, spokesperson and executive director of the central bank, declined to comment.

He said he was unaware of the matter and had contacted the relevant department for clarification, but did not receive a response.

The Business Standard had sent a written query to the Bangladesh Bank seeking clarification on the grounds for the instruction, but did not receive a response by publication time.

The Deshbandhu Group has reportedly been pursuing the Bangladesh Bank through the Ministry of Labour and Employment to secure a bailout by allowing rescheduling of its loans.

In a letter addressed to Bangladesh Bank Governor Ahsan H Mansur on 14 October, the ministry requested to urgently facilitate loan rescheduling, provide essential working capital, and reopen back-to-back Letter of Credit (LC) facilities for Deshbandhu Group factories to ensure the distressed conglomerate's operation continues.

The letter stressed the group's importance to the national economy, saying that "Deshbandhu Group is one of the country's largest industrial conglomerates. Since 1989, it has contributed to the national economy by establishing large and medium-sized industries in remote areas, creating 25,000 jobs. Various factories remain shut due to a lack of necessary raw materials and working capital, with five operating at a maximum of 25% capacity."

The letter also urged the central bank to provide capital and back-to-back LC facilities to resolve the impending labour crisis and restore factory operations.

Several factories under the Deshbandhu Group halted production following the political transition after the fall of the Hasina government on 5 August 2024. Currently, five export-oriented ready-made garment (RMG) units are struggling to remain partially operational.

Following the ministry's request, the Bangladesh Bank instructed Bank Asia to remove Deshbandhu's name from the wilful defaulter list to allow implementation of the loan rescheduling facility.

Shusmita Anis, a director of Advanced Chemical Industries (ACI) PLC, has expressed her intention to buy 1,60,000 shares of the company, according to a disclosure published with the stock exchanges today (24 December).

The disclosure stated that she will buy the shares at prevailing market price in the block market through Dhaka Stock Exchange (DSE) within the next 30 working days.

Based on shareholding data up to November, Shusmita currently holds 3,986,946 shares of ACI, representing 4.51% of the company's total shareholding. The planned purchase will further increase her stake in the listed conglomerate.

ACI shares closed at Tk193.60 each today, down 1.17% from the previous trading session. At that price, the value of the proposed share purchase stands at around Tk3.09 crore.

The disclosure comes amid a series of share acquisitions by ACI's sponsors and directors in recent months. Anis Ud Dowla, chairman of ACI, has also announced his intention to buy 360,000 shares of the company, further strengthening his holding.

In October, Anis Ud Dowla had purchased 500,000 shares of ACI. According to the latest shareholding report, he currently owns about 1.97 crore shares, equivalent to a 22.31% stake in the company.

ACI has recently shown signs of financial improvement. For the financial year ended 30 June 2025, the company reported a sharp reduction in losses. Its consolidated loss per share declined to Tk7.40, an improvement of nearly 53% from Tk15.88 in the previous fiscal year.

Reflecting the improved performance, the board of directors has recommended a 25% cash dividend for shareholders for FY25.

The rise of an unexpected Tk20,000 crore cost for bank mergers has created liquidity stress for the government, prompting additional borrowing from the banking system and crowding out private sector credit.

Moreover, election costs, higher house rent for MPO-listed school and college teachers, and a new pay scale for government employees have increased budgetary expenditure, prompting the government to revisit its borrowing target for the current fiscal year.

Despite a record-low Annual Development Programme (ADP), government borrowing from the banking sector increased by more than Tk25,000 crore in the first six months of FY26.

ADP expenditure in the first five months of FY26 stood at Tk28,043.62 crore, the lowest in recent history, according to an Implementation Monitoring and Evaluation Division report.

Government borrowing would have been even higher if ADP implementation had been normal, said a senior executive of the central bank.

Bangladesh Bank had to call an additional auction to provide Tk10,000 crore for the merger of five banks, causing a rise in treasury bill and bond yields.

The newly formed Sammilito Islami Bank is set to start repaying depositors' money from the end of this month with government funding.

The government's liquidity stress is also reflected in unpaid remittance subsidy dues of more than Tk4,000 crore.

Meanwhile, treasury bill and bond rates, which had dipped below 10% since September, rose sharply to nearly 11% in December due to heavy bank borrowing, according to Bangladesh Bank data.

The higher rates encouraged private commercial banks to invest more in treasury bills and bonds instead of lending to the private sector.

Private sector credit growth fell to 6.23% in October, well below the FY26 monetary target of 8%, while government sector credit growth stood at 24%, surpassing the 18% ceiling, central bank data show.

Borrowing target set for upward revision

The government is planning to revise the bank borrowing target upward from Tk1.04 lakh crore to Tk1.17 lakh crore, a move discussed mainly at the coordination council meeting held in November, according to central bank sources.

There is also concern about possible disruption to foreign financing inflows for deficit funding due to election-centric unrest, the official said.

Total government borrowing stood at Tk34,648 crore as of 15 December in FY26, which remains within the official target.

Syed Mahbubur Rahman, managing director of Mutual Trust Bank, said some banks are in a strong liquidity position, with advance-deposit ratios below 80%.

However, the overall market remains under liquidity stress, as most banks are struggling with high default loans.

Banks with surplus liquidity are investing in treasury bills and bonds due to limited lending opportunities in the private sector, he said.

Inflation risks and central bank stance

Rising government treasury yields have pushed deposit rates higher, which will ultimately increase financing costs for businesses and add to inflationary pressure, he added.

Speaking to The Business Standard, a senior central bank executive said government borrowing could rise in the coming months due to falling revenue amid sluggish economic activity.

If government borrowing continues to increase, it will shrink space for private sector credit and weigh on economic growth, he added.

He said the central bank is not concerned as long as borrowing remains within budgetary limits, as inflation targets were set after adjusting for those limits.

However, Bangladesh Bank may need to call a special auction of treasury bills and bonds in the near future due to rising unexpected expenditure, he added.

Despite high bank borrowing, the money market has remained liquid, as Bangladesh Bank has been injecting funds through dollar purchases to balance inflows and outflows.

Bangladesh Bank has injected more than Tk30,000 crore by buying $2.5 billion so far in FY26 and has continued dollar purchases to prevent appreciation pressure.

Explaining the dollar buying, the central bank executive said banks find investing in treasury bills and bonds more profitable than holding dollars due to appreciation risks.

Moreover, demand for dollars remains low because of sluggish economic activity and slower imports ahead of the election, he said.

Although government expenditure has increased for several unexpected reasons, the revenue shortfall has continued to widen amid weak economic activity.

National Board of Revenue collection during the first five months of FY26 fell short by Tk24,047 crore against a target of Tk173,023 crore.

Economist urges caution

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, said it is normal for the government to supply funds in one area while borrowing in another.

"However, the scale of borrowing from the banking sector should not create distortions that could disadvantage private borrowers. As demand for private-sector loans rises, care must be taken to ensure fair access," he said.

The interim government has decided to take legal action against owners of at least 10 struggling industrial firms, including the Beximco Group, after more than Tk700 crore in interest-free loans given to clear workers' wage arrears were not repaid within the agreed timeframe.

The government has decided that any factory owner failing to repay the loan by 31 December will face legal proceedings. Additional measures include imposing foreign travel bans, confiscating passports of owners, managing directors and board members, and, if necessary, selling land, factories and machinery to recover the funds.

The decisions emerged from the minutes of a meeting of the Adviser Council Committee on labour and business conditions at Beximco Industrial Park, held on 8 December.

According to official records, more than Tk701.6 crore was disbursed to 10 industrial groups under a six-month repayment condition to defuse labour unrest following widespread wage arrears after 5 August last year.

Of the amount, the labour ministry provided Tk76,14,55,115 while the Finance Division provided the remaining Tk 6,25,46,00,000.

Labour and Employment Adviser Brigadier General (retd) M Sakhawat Hossain has held several meetings with factory owners and leaders of the BGMEA and the BKMEA, seeking their cooperation to ensure repayment of the government funds.

The troubled companies

The loan recipients include Beximco Group, Bards Group, TNZ Group, Yellow Apparels Limited, Dard Group, Niagara Textiles Limited, Roar Fashion Limited, Mahmud Jeans Ltd and Apparel Chain BD Limited.

The largest exposure involves Beximco Group, which received nearly Tk585 crore in two phases. In November last year, it was given Tk59.53 crore, followed by a further Tk525.46 crore on 6 March. Repayment deadlines of 21 May and 6 September have also expired without payment.

Bards Group received Tk19 crore on 11 November 2024. The repayment deadline expired on 11 May 2025, but no payment has been made.

TNZ Group received Tk28 crore in two phases – Tk16 crore on 28 November last year and Tk12 crore on 28 May this year. The repayment deadlines of 27 May and 28 August have both passed without any repayment.

Yellow Apparels received Tk37.32 crore on 20 November last year, Dard Group Tk13 crore on 10 December, Niagara Textiles Tk18 crore on 4 June, Roar Fashion Tk1.23 crore on 27 March, Mahmud Jeans Tk21 crore on 28 May, and Apparel Chain BD Tk1 crore on 4 April last year. None of these companies has repaid the loans despite the lapse of their respective deadlines.

A senior finance ministry official, speaking on condition of anonymity, told TBS that the loans were extended primarily to prevent labour unrest but recovery plans failed as many of the factories remained closed.

Fresh labour unrest feared

Meanwhile, the labour ministry fears further labour unrest as three other companies – BHIS Apparels Limited, Seasons Dresses Limited, and Paradise Cables Limited – are currently unable to pay their workers' wages and benefits.

BHIS Apparels owes Tk2.27 crore, Seasons Dresses Tk16.75 crore and Paradise Cables Tk8.40 crore. At the 8 December meeting, Paradise Cables Managing Director Mobarak Hossain said the factory had been closed since 2017 and that efforts were under way to clear remaining dues within three months. Seasons Dresses has requested an interest-free loan from the central labour fund, while no representative from BHIS Apparels attended the meeting. A representative of the Dard Group said they could not pay the remaining dues of the workers and employees due to the inability to raise funds.

The labour adviser instructed officials to form a technical committee to prepare a comprehensive action plan to settle workers' dues at the affected firms and avert further unrest.

The National Board of Revenue (NBR) has introduced special arrangements for filing e-returns on holidays to facilitate individuals intending to contest the upcoming national parliamentary election.

Under the initiative, aspiring candidates will be able to submit their income tax returns online even on weekly holidays, easing compliance pressure ahead of nomination deadlines, according to a press release.

To streamline the process, the NBR, through its e-Tax Management Unit, has opened a dedicated help desk at the e-Tax Management Unit office at the Institution of Engineers, Bangladesh (IEB) in Dhaka.

The help desk will provide assistance related to online income tax return filing, including technical and procedural support.

According to the NBR, the help desk will operate on December 26 (Friday) from 2:00pm to 5:00pm and on December 27 (Saturday) from 9:00am to 5:00pm.

The service will also remain available during regular office hours on December 28 and December 29, the revenue authority said.

Officials noted that the initiative aims to ensure prospective candidates can meet mandatory tax compliance requirements within stipulated timelines, despite tight schedules and holiday constraints.

The move is expected to benefit a large number of election aspirants seeking to complete their documentation ahead of the parliamentary polls.

With GDP growth slowing to around 4% and inflation remaining in the high single digits, Bangladesh is entering what economists describe as a moderate stagflationary phase, one that is eroding real incomes, weakening employment and threatening long-term growth prospects.

Economists made the observations at a roundtable in Dhaka today (24 December), warning that while Bangladesh has avoided outright recession, persistent inflation, stagnant wages, falling employment, particularly among women, and weak investment are creating a vicious cycle that could derail the country's long-term development ambitions.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said while textbook stagflation refers to negative growth combined with high inflation, developing economies like Bangladesh rarely experience outright negative growth.

"It becomes evident when growth falls below trend levels while inflation remains elevated. By that definition, Bangladesh has shown stagflationary tendencies for the past three to four years," he added.

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said, "Bangladesh risks remaining stuck in a 'low-level economic equilibrium' unless it addresses persistent inflation, weak private investment and widening inequality.

While inflation has eased from double digits to 8.29%, wage growth has remained largely stagnant. This means real incomes have declined, eroding people's purchasing power, she said.

Zahid Hussain said that although GDP growth remains positive at around 3.5-4%, inflation continues in the high single digits, driven mainly by exchange rate depreciation and persistent food inflation.

Fahmida Khatun pointed out that inflationary pressure has persisted for nearly three years, driven initially by Covid-related supply chain disruptions and later compounded by global geopolitical tensions and domestic instability.
Infograph: TBS
Infograph: TBS

Under current institutional and investment conditions, Bangladesh's potential growth stands at about 6-6.5%, making sustained 8% growth a highly ambitious target, Zahid Hussain said.

Without deep structural reforms, he said, growth is likely to remain stuck at 4-5%, making the trillion-dollar economy target difficult to achieve.

Echoing Zahid, Planning Commission member Monzur Hossain said sustaining 8% growth until 2035 is extremely ambitious for Bangladesh. Rather than chasing a number, the priority should be rebuilding the economic foundation by restoring macroeconomic stability and ensuring quality investment, employment and productivity, he said.

While presenting the keynote paper, economist Jyoti Rahman said Bangladesh stands at a critical economic crossroads as it pursues the ambitious goal of becoming a trillion-dollar economy by 2035, a target that would require sustaining around 8% real GDP growth for at least a decade.

The event was also attended by Dhaka University teacher Professor Rashed Al Mahmud Titumir. The discussion was jointly organised by Voice for Reform and BRAIN.

Economic stability

Zahid Hussain stressed that political stability is a prerequisite for macroeconomic stability, but not sufficient on its own.

He identified three key pillars of macro stability: controlling inflation, maintaining external balance, and restoring health in the financial sector.

Structural supply-side factors are a key reason behind persistent food inflation, particularly extortion along supply chains and the market power exercised by syndicates in essential commodities such as rice, onion, edible oil and sugar.

"Extortion acts like a tax and becomes embedded in prices," he said, adding that both extortion and market manipulation create self-fulfilling inflationary expectations.

Zahid stressed that economic outcomes are ultimately shaped by the political environment, arguing that macroeconomic variables "grow on the soil of politics."

Even under a stable political scenario, he cautioned, economic challenges will not resolve themselves automatically.

Fahmida Khatun warned that sluggish private investment is constraining growth prospects. Private investment stood at around 23-24% of GDP in FY24, but declined further to 22.5% in FY25 – far below the level required to sustain high growth.

"For Bangladesh, the minimum investment rate should be close to 30%. To move into upper-middle-income status, it needs to rise to around 35%," she said.

Zahid Hussain acknowledged visible improvement in Bangladesh's external balance over recent months, driven largely by a surge in remittances, reduced illicit financial outflows and changes in Bangladesh Bank's exchange rate management.

He said Bangladesh Bank's current "soft peg" approach, keeping the exchange rate within a narrow band, has reduced volatility without heavy-handed interventions.

'Financial sector remains under stress'

Despite recent regulatory and structural initiatives, including bank mergers, Zahid Hussain said the financial sector remains under stress, particularly due to high non-performing loans.

"There are no clear signs of recovery yet, although the situation may have stopped deteriorating further," he said.

Zahid emphasised that policy support is not a substitute for structural reform, likening short-term incentives to painkillers that mask deeper institutional weaknesses.

Citing resistance to the separation of tax policy and tax administration at the National Board of Revenue, as well as opposition to leasing container terminals at Chattogram Port, he said such pushback is inevitable.

The July 2024 uprising, though politically significant, delivered another shock to the economy, Fahmida Khatun said.

"Any form of instability – political, natural or external – has negative economic consequences," she said.

Unemployment and poverty

Fahmida Khatun highlighted a worrying contraction in employment, citing findings from the Labour Force Survey 2024. According to the survey, total employment declined by 1.74 million, of which 1.64 million – nearly 94% – were women.

"This clearly undermines the idea of inclusive development," she said, stressing that decent and productive employment is a prerequisite for reducing inequality.

Citing surveys by the World Bank and PPRC, the CPD executive director said both poverty and inequality have increased in recent years.

"The paradox is that the more educated someone is, the less likely they are to find a job," she said, attributing the problem to a severe skills mismatch between university curricula and labour market demand.

Reform agendas

With elections ahead, she urged political parties to clearly outline reform agendas in their election manifestos. "Political stability is a must, but it is not enough," Fahmida Khatun said. "Without genuine political will, achieving a trillion-dollar economy will remain out of reach."

"Every structural reform creates winners and losers. Those benefiting from the status quo have the power to resist," Zahid Hussain said, stressing the need to manage the political economy of reform.

Silver breached the $77 mark for the first time on Friday, while gold and platinum hit record highs, buoyed by expectations of US Federal Reserve rate cuts and geopolitical tensions that fueled safe-haven demand.

Spot silver jumped 7.5 percent to $77.30 per ounce, as of 1:53 p.m. ET (1853 GMT), after touching an all-time high of $77.40 earlier today, marking a 167 percent year-to-date surge driven by supply deficits, its designation as a US critical mineral, and strong investment inflows.

Spot gold was up 1.2 percent at $4,531.41 per ounce, after hitting a record $4,549.71 earlier. US gold futures for February delivery settled 1.1 percent higher at $4,552.70.

"Expectations for further Fed easing in 2026, a weak dollar and heightened geopolitical tensions are driving volatility in thin markets. While there is some risk of profit-taking before the year-end, the trend remains strong," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Markets are anticipating two rate cuts in 2026, with the first likely around mid-year amid speculation that US President Donald Trump could name a dovish Fed chair, reinforcing expectations for a more accommodative monetary stance.

The US dollar index was on track for a weekly decline, enhancing the appeal of dollar-priced gold for overseas buyers.

On the geopolitical front, the US carried out airstrikes against Islamic State militants in northwest Nigeria, Trump said on Thursday.

"$80 in silver is within reach by year-end. For gold, the next objective is $4,686.61, with $5,000 likely in the first half of next year," Grant added.

Gold remains poised for its strongest annual gain since 1979, underpinned by Fed policy easing, central bank purchases, ETF inflows, and ongoing de-dollarization trends.

On the physical demand side, gold discounts in India widened to their highest in more than six months this week as a relentless price rally curbed retail buying, while discounts in China narrowed sharply from last week's five-year highs.

Elsewhere, spot platinum rose 9.8 percent to $2,437.72 per ounce, having earlier hit a record high of $2,454.12 while palladium surged 14 percent to $1,927.81, its highest level in more than three years.

All precious metals logged weekly gains, with platinum recording its strongest weekly rise on record.

Profits at China's industrial firms in November fell at their fastest pace in over a year, as weak domestic demand offset resilience in exports in another sign of a stuttering economic recovery that backs calls for additional policy stimulus.

Profits fell 13.1 percent year-on-year in November, accelerating from a 5.5 percent drop in October, according to the National Bureau of Statistics (NBS) data released on Saturday. The sharper decline came despite better-than-expected goods exports and against a backdrop of persistent factory-gate deflation, maintaining pressure on policymakers to do more to address chronically soft household consumption.

The profit numbers are consistent with a broader cooling in economic activity in the fourth quarter, mainly due to the drag from soft domestic demand, said Xu Tianchen, senior economist at the Economist Intelligence Unit.

Xu said he remained cautiously optimistic about the outlook for industrial profits.

"Profitability will improve under 'anti-involution'" as firms scale back investment over time, he said, adding that companies could also "earn more profits overseas," albeit "at the cost of their global peers."

For the first 11 months of the year, industrial profits rose 0.1 percent from a year earlier, slowing from 1.9 percent growth in January–October, driven in part by a 47.3 percent plunge in profits at the coal mining and washing industry.

Momentum in the roughly $19 trillion economy eased toward year-end, though authorities have yet to roll out new policy support.

China observers say Beijing is taking some comfort from indicators suggesting that the official 2025 growth target of around 5 percent is still achievable, while a US-China trade truce has also helped ease tensions. However, market expectations centre on the need for further policy support next year to bolster domestic demand and broad economic growth.

Against a volatile and uncertain global backdrop, and amid continued structural adjustment as industry shifts from old to new growth drivers, the recovery in industrial firms' profitability still needs to be put on a firmer footing, NBS Chief Statistician Yu Weining said in an accompanying statement.

China's economy grew by just 2.5 percent to 3 percent in 2025, the Rhodium Group think tank estimates, roughly half the pace implied by official data, driven by a collapse in fixed-asset investment over the second half of the year.

After a brief period of profit-taking, the Dhaka Stock Exchange (DSE) experienced a rebound today (24 December), spearheaded by significant gains across blue-chip and banking shares.

The benchmark index, DSEX, of the bourse, surged by 23 points, while turnover declined by 17% to Tk338.10 crore, according to DSE data.

Out of the 10 stocks, seven banks – including BRAC Bank, City Bank, Pubali Bank, Eastern Bank, and Uttara Bank – were index pullers, as their share prices surged.

However, the majority – 178 out of 387 stocks traded on the bourse – posted price gains, while 126 declined and 83 remained unchanged.

Stocks opened on a positive note today (24 December), with prices of the majority of stocks rising and indices advancing.

However, after the first 19 minutes of trading, sell-offs emerged, dragging the indices down for about 10 minutes.

From around 10:30am, buying interest regained dominance, pushing stocks higher, with the upward momentum continuing until 1pm.

After that, selling pressure returned, but the market eventually closed in positive territory with DSEX gaining by 23 points to settle at 4,883 points.

Meanwhile, the other two indices – Shariah-based DSES and blue-chip DS30 – rose by 6 points and 9 points, respectively, to close at 1,006 and 1,882 points.

Market capitalisation, the total value of a publicly traded company's outstanding common shares owned by stockholders, Tk1,248 crore to Tk6.77 lakh crore.

According to the LankaBangla financial portal, Al-Arafah Islami Bank topped the index gainers, followed by BRAC Bank, City Bank, Beacon Pharmaceuticals, Pubali Bank, Uttara Bank, Grameenphone, Southeast Bank, and Eastern Bank.

On the dragger side, National Bank was the major index dragger, followed by Square Pharmaceuticals, GPH Ispat, ACI, Summit Power, AB Bank, Prime Bank, and Unilever Consumer Care.

Al-Arafah Islami Bank was the top gainer on the DSE with the increase of its shares by 8.57% to Tk15.2 each.

Rahima Food Corporation was the second top gainer with an increase in its share price by 6.50% to Tk160.5 as a revival plan was unveiled with the agreement with City Edible Oil to use the factory of Rohima Food to bottle oil.

Other top gainers are Makson Spinning Mills (6.38%), GSP Finance (6.25%), and Malek Spinning Mills (6.15%).

Fareast Finance was the top loser as its share price declined by 9.38% to Tk0.58 each, FAS Finance, People's Leasing by 8.33% to Tk0.66 each and Tk0.55, respectively.

Bangladesh Shipping Corporation, a state-owned firm, led the top trading stocks in terms of value with Tk18.74 crore, followed by City Bank with Tk13.10 crore, Rohima Food Corporation with Tk12.97 crore and Shaiham Cotton with Tk12.83 crore.

Four years after the launch of Bangladesh's first asset-backed corporate green sukuk, investors have largely avoided converting their Beximco Green-Sukuk Al Istisna'a units into shares, deepening concerns over the group's ability to repay the instrument on maturity in 2026.

Despite the option to convert 20% of units annually, total conversion reached only about 6.36% over four years up to 2025, with just 350 units converted into 420 Beximco shares in 2025, according to trustee Investment Corporation of Bangladesh (ICB).

Conversion in 2025 was the lowest among the four years, whereas the highest conversion took place in 2022, with 1.7 crore sukuk units converted into shares.

According to trustee data, as of the record date on 22 December, 17 sukuk holders applied to convert 20% of their holdings, while one sukuk holder applied to convert 80% of its holdings in the fourth year.

The applicants collectively held 640 sukuk units, of which 350 units were converted into 420 ordinary shares of Beximco Limited at a cost price of Tk82.58.

After the conversion process, total remaining sukuk units stood at 28.09 crore by the end of 2025, the data showed.

ICB officials said currently, due to the imposition of a floor price on Beximco's shares, the price is stuck at Tk110.10 each.

Sukuk investors fear that if the floor price is lifted, the share price may decline significantly, as Beximco Ltd remains largely non-functional, having closed its garments division in Gazipur and partially operating its textile division, they said.

As a result, the company's revenue and profitability suffered after the fall of the previous government last year, said the officials.

Therefore, investors prefer to retain their sukuk units rather than convert them into shares, as they continue to receive half-yearly periodic interest on their sukuk investments, they added.

So, upon maturity of the sukuk in December 2026, Beximco, the sukuk originator, will be obligated to repay the entire amount to investors.

But lack of capacity to repay the whole amount within a year, as Beximco is now in trouble, a Bangladesh Bank-mandated working committee has recently recommended extending the maturity of Sukuk by six years.

The 21-member committee, led by the ICB has proposed a new maturity date of 2032 for the Tk3,000-crore instrument.

The extension has been sought amid Beximco's ongoing financial strain, delays in two of the three Sukuk-funded projects, and the company's failure to convert Sukuk units into its shares as originally planned.

Beximco raised Tk3,000 crore in 2021 through the country's first private-sector, asset-backed corporate green Sukuk.

The plan for Sukuk was to finance two solar power plants – Teesta and Korotoa – alongside the expansion of Beximco's textile division.

Only Teesta Solar Plant is functional, and Korotoa plant, with a planned 30MW capacity is non-functional. was expected to begin production by June 2026, as the plant was damaged due to a fire in August 2024.

Meanwhile, Beximco has yet to publish its nine-month and full-year financial statements for the 2024-25 fiscal year. Its six-month financials up to December 2024 showed revenue plunging to Tk415 crore, down sharply from Tk1,441 crore in the same period of the previous fiscal year. The company posted a loss of Tk356 crore, with a per-share loss of Tk3.78.

In FY24, Beximco incurred a loss of Tk35.87 and did not declare any dividends for shareholders.

Chief Adviser Muhammad Yunus is actively working to enhance diplomatic relations with India, Finance Adviser Salehuddin Ahmed said today (23 December), noting that the relations between the two neighbouring country's has not deteriorated significantly.

Speaking to reporters after a meeting of the Advisers' Council Committee on Government Purchase at the Secretariat, Salehuddin expressed optimism that bilateral relations would not decline further.

"The chief adviser is working to improve diplomatic relations with India and he himself has also been speaking to various stakeholders on the issue," said the adviser.

When asked whether the chief adviser has directly spoken to India, he said the chief adviser has not but he did speak to those associated with the matter.

Emphasising relations with India, the finance adviser said trade and politics should be viewed separately.

Dhaka summons Indian envoy, voices deep concern over security at Bangladesh missions

While there may be some sensitive issues or rhetoric at the diplomatic level, maintaining good relations with India is essential for economic interests, Salahuddin noted.

He mentioned that Bangladesh approved a proposal today as well to purchase 50,000 tonnes of rice from India, as a means to seek good relations.

Importing this rice has also benefited Bangladesh, the adviser said, as sourcing rice from Vietnam instead of India would cost Tk10 more per kilogram.

The finance adviser further said although there was some delay, approval has been given to import onions from India and that efforts were ongoing to improve relations with India.

He reiterated that the chief adviser is working on enhancing diplomatic ties with India, and he himself has spoken with the Indian High Commission. They have informed him that they are also working to improve relations as well.

"From the outside, it may sound like many things are happening. But the situation has not reached such a bad stage. However, there are some statements that are difficult to shut out," the adviser said.

When asked whether people or external forces are making anti-India statements, Salehuddin said, "These are creating complicated situations for Bangladesh and do not represent the country's national expression."

The finance adviser said the government does not want any trouble with neighbouring countries. Bangladesh currently believes in regionalism and is interested in maintaining economic relations with India, Bhutan, Nepal and Pakistan.

Following the political changeover on 5 August 2024, tensions emerged in Bangladesh-India relations.

Bangladesh suspends visa services in New Delhi, Shiliguri, Agartala

Both countries have now expressed concerns over the security of their respective diplomatic missions.

Citing security reasons, operations at the Indian Visa Application Centre (IVAC) in Chattogram city were suspended indefinitely yesterday (Monday).

Earlier, due to protests, visa centres in Dhaka, Khulna and Rajshahi were partially closed for one day each last week, citing security risks.

Meanwhile, Dhaka and Delhi have issued contradictory statements regarding yesterday's protest in front of the Bangladesh High Commission in New Delhi.

Dhaka Stock Exchange (DSE) indices edged slightly lower today (23 December) as investors remained cautious amid ongoing political uncertainty and opted to book profits on existing holdings rather than take on new risks.

The benchmark DSEX index decreased 14 points to close at 4,861. The blue-chip DS30 index fell 2 points to settle at 1,873, while the Shariah-based DSES index shed 4 points to end at 1,003.

Despite the decline, market turnover rose 2.77% to Tk407 crore, compared to Tk396 crore in the previous session. Out of 389 traded issues, 84 advanced, 242 declined, and 63 remained unchanged.

Market analysts say fears of possible disruptions, year-end sell pressure, and uncertainty surrounding the election process prompted investors to adopt a wait-and-see approach, contributing to the overall market downturn. During the bearish phase, yields on treasury bills and bonds have started to rise again, further weighing on equity market sentiment amid the ongoing bearish trend.

According to analysts, political uncertainty remains the most crucial issue influencing the stock market. As this uncertainty gradually eases, the market is expected to move in a more positive direction. Due to the current uncertainty, institutional investors and large individual investors have largely stayed away from active participation, keeping trading volume below its potential level.

In its daily market review, EBL Securities noted that the capital bourse struggled to build on the previous session's recovery, as risk-averse investors opted to reduce exposure amid the absence of meaningful catalysts, while persistent political uncertainties continued to dampen overall market sentiment.

The market opened on a positive note, extending the recovery momentum from the previous session. However, as the session progressed, broad-based selling pressure resurfaced amid subdued investor sentiment, eroding early gains and ultimately dragging the index into negative territory, according to the commentary.

Most of the large-cap sectors posted negative performance today. Food & Allied was the only sector to register a slight gain of 0.18%, followed by Fuel & Power with a marginal increase of 0.03%.

Other major sectors that ended in the red included Engineering (down 0.08%), Telecommunication (down 0.08%), Pharmaceutical (down 0.10%), Non-Bank Financial Institutions (down 0.25%) and Banks (down 0.35%).

The price of Shahjalal Islami Bank's perpetual bond jumped Tk2,400 per bond — a 54.55% increase — in a single day on Tuesday hitting the highest price within the 52-weeks.

Market insiders said the prices of the bond have jumped due to annual dividend declaration.

As per disclosure published today (23 December), the trustee of Shahjalal Islami Bank Mudaraba perpetual bond set coupon or profit rate at 10% for January-December 2026 period.

The trustee also set a range of return from 6% to 10% and margin rate of return at 2.50%.

Due to this annual declaration, on Tuesday, there was no price limit on the trading of SJIBL Mudaraba Perpetual Bond. That is why its bond price surged 54.55% in a single day.

On Tuesday, the adjusted opening price of the bond was Tk4,400 each, closing price of the bond was Tk6,800 each at the Dhaka Stock Exchange (DSE). Only two bonds are traded on the bourse.

Shahjalal Islami Bank has reported a slight decline in its earnings per share (EPS) at Tk3.50 for the first nine months of 2025 – during the January to September period.

At the same time of the previous year, its EPS was Tk3.65.

In 2024, Shahjalal Islami Bank reported a profit of Tk169.33 crore with an EPS of Tk1.52, and paid a 10% cash dividend to its shareholders.

A year ago in 2023, it made a profit of Tk358.15 crore and EPS was Tk3.22, according to its financial data.

Today, Shahjala Islami Bank's share price closed at Tk16.40 each at the DSE.

Bangladesh's external debt declined by $1.45 billion in the July-September quarter, according to data released by Bangladesh Bank today (23 December).

The country's total outstanding external debt stood at $112.12 billion at the end of September this year. This marks a decrease of $1.45 billion from the previous quarter, when external debt amounted to $113.57 billion at the end of June.

The reduction reflects declines in both public and private sector external borrowing.

Government sector external debt at the end of September stood at $92.54 billion, down from $93.74 billion in the previous quarter. Meanwhile, private sector external debt was $19.58 billion, down from $19.83 billion in June.

Bangladesh's external debt jumps 42% in 5yrs, repayment pressure doubles: World Bank

Former World Bank lead economist Zahid Hussain said the decline could be linked to a fall in buyers' credit.

"Because imports are lower, buyers' credit is also decreasing, which may reduce overall external debt," he added.

Bangladesh Bank data shows that buyers' credit fell by around $1.1 billion in the three-month period, standing at $4.15 billion at the end of September, down from $5.25 billion in the previous quarter.

A senior Bangladesh Bank official explained that the main reason for the decline in the September quarter was lower new external borrowing combined with higher repayments of previous loans. This, along with the drop in buyers' credit, contributed to the overall $1 billion reduction in total external debt.

The official added that after 5 August 2024, foreign banks had reduced loan limits, but limits have since gradually increased as reserves improved. "There is no concern regarding borrowing limits now. Businesses can take foreign loans if they wish," the official said.

Currently, foreign borrowing carries an interest rate of around 7.5%, compared with over 12% for domestic bank loans, making external loans more cost-effective for businesses.

The official also noted that new investments are generally lower, leading to reduced business activity and lower imports of capital machinery, which explains the drop in buyers' credit. Data shows that private sector growth was 6.23% at the end of October, reflecting slower expansion and reduced demand for bank loans.

"Before the elections, the likelihood of new borrowing is low. This trend is expected to continue until the polls, but external loan uptake may increase again afterward," the official said.

The government has approved several proposals, including imports of rice, edible oil and lentils to strengthen food security and stabilise prices ahead of the holy month of Ramadan.

The approvals were given at a meeting of the Advisers Council Committee on Government Purchase, today (23 December) at the Cabinet Division Conference Room at the Secretariat, with Finance Adviser Dr Salehuddin Ahmed presiding.

The meeting recommended two proposals from the Ministry of Food to procure a total of 100,000 tonnes of rice.

Of this, 50,000 tonnes of non-basmati parboiled rice will be imported from India through the international open tender method at an estimated cost of Tk217.53 crore, while another 50,000 tonnes of white rice will be imported from Pakistan under a government-to-government arrangement at around Tk241.52 crore.

Officials said the rice imports would help maintain adequate public food stocks and curb market volatility during Ramadan when demand for essentials rises sharply.

The Directorate General of Food will implement the procurement to ensure the timely arrival of consignments and strengthen buffer stocks.

To keep edible oil prices stable, the meeting also approved the procurement of 4.75 crore litres of edible oil.

This includes 1 crore litres of refined rice bran oil from local sources and 3.75 crore litres of soybean oil from international sources through direct purchase methods.

The Trading Corporation of Bangladesh is expected to distribute the oil through subsidised sales across the country.

In addition, the committee approved the procurement of 10,000 tonnes of lentils through the national open tender method at an estimated cost of Tk72.20 crore.

The lentils will be procured in 50-kg bags and distributed through government channels to stabilise the market and support low- and middle-income consumers.

The Government's Procurement Advisory Council Committee has approved the Trading Corporation of Bangladesh (TCB)'s plan to buy 4.75 crore litres of edible oil, including 1 crore litres of rice bran oil and 3.75 crore litres of soybean oil.

The Ministry of Commerce proposal was approved today (23 December) by the procurement committee at a meeting presided over by Finance Advisor Dr Saleh Uddin Ahmed.

Under the plan, rice bran oil will be procured locally through an open tender, while soybean oil will be acquired internationally using the direct purchase method.

Locally, three companies will supply rice bran oil at Tk 167.90 per litre: Gaibandha's Pradhan Oil Mill will supply 25 lakh litres, Dhaka's Green Oil and Poultry Feed Industries 25 lakh litres, and Majumdar Product Limited 50 lakh litres.

As for soybean oil, Malaysian company Sen Millennium Trade will supply 50 lakh liters at Tk132 per litre, US company Stuart Clobanu Gerhard of New Jersey will supply 1.25 crore litre at Tk132.69 per litre and Nigeria's Vidocq Firm and Export Ltd 2 crore litre at Tk121.32 per liter.

In the same meeting, the committee also approved the import of 1,00,000 tonnes of rice under two separate proposals from the Ministry of Food. One proposal covers 50,000 tonnes of non-basmati parboiled rice to be imported through an open tender; this consignment will be supplied by India's M/S Pattabhi Agro Food Private Ltd at $355.77 per tonne.

The remaining 50,000 tonnes will be imported from Pakistan on a government-to-government basis, purchased through the Trading Corporation of Pakistan at $395 per tonne.

The committee also approved the purchase of 1.30 lakh tonnes of fertiliser and the printing, binding and distribution of books for the 8th, 9th and 10th grades of secondary education for the 2026 academic year.

Chinese firm awarded contract to drill five gas wells

The procurement committee also cleared a turnkey contract worth Tk907 crore for drilling five wells, awarded to Sinopac International Petroleum Service Corporation Limited of China. Four of these are appraisal-cum-development wells at Shahbazpur-5 & 7 and Bhola North-3 & 4, while the fifth is an exploration well at Shahbazpur North East-1. The contract was secured through an international "one stage, two envelopes" tender process.

At a time of surging passenger demand, Biman Bangladesh Airlines is facing a worsening fleet crisis after failing to add a single aircraft over the past five years.

Instead of expanding, the national carrier's fleet has shrunk to just 19 aircraft, after returning two leased planes last year when their contracts expired. Attempts to lease replacements have repeatedly failed, with five tender rounds drawing no response from international lessors.

Officials and industry insiders say the core problem is the airline's inability to move quickly under government procurement rules, at a time when global aircraft supply is tight and leasing decisions are often made within days.

The shortage is already affecting operations. Biman is preparing to cut flights on several routes ahead of the Hajj season starting next April, even as it plans to launch services on the Dhaka-Karachi route later this month under a bilateral agreement.

Biman Spokesperson Boshra Islam told The Business Standard that the airline had attempted to lease aircraft last year but could not find any available planes.

"We are continuing our efforts," she said, adding that a draft plan to reduce flights during the Hajj season due to aircraft shortages had been prepared and would be announced once finalised.

On the slow leasing process, she said: "The airline is required to follow all government procurement rules and cannot deny that the process takes time."
No immediate fix

Biman's current fleet consists of four Boeing 777-300ERs, four Boeing 787-8s, two Boeing 787-9s, four Boeing 737s and five Dash-8 Q400s. The last aircraft added was a Dash-8 Q400 delivered from Canada on 5 March 2021.

Biman currently operates 22 international routes. There are plans to open more routes including East Asia, Europe and USA.

Under a 10-year plan approved by the Biman board in 2024, the airline aims to acquire at least 26 new aircraft, expanding its fleet from 19 to 47 planes by 2034.

Earlier in late June this year, Biman MD Md Shafiqur Rahman told reporters, "We need aircraft to meet our current passenger demand. That's why we have decided to connect directly with aircraft lessors."

He said Biman is also unable to launch new routes due to the ongoing aircraft shortage.

However, insiders say the target now looks increasingly uncertain, as procurement discussions with both Boeing and Airbus remain unresolved.

One official said the problem cannot be solved quickly, noting that any major aircraft purchase requires cabinet-level approval and that deliveries typically occur five to six years after contracts are signed.

Former Biman board member and aviation analyst Kazi Wahidul Alam said the airline has remained indecisive for years, alternating between leasing aircraft and buying new ones.

"The issue is not the availability of leased aircraft, but the failure to follow realistic, practical and internationally accepted procurement policies," he said.

"Even though Biman issues tenders repeatedly, international lessors are reluctant to respond because the government process takes too long. They operate on hours or days – not months."
Boeing, Airbus deliveries years away

During negotiations with the United States in August over reciprocal tariffs, the government committed to procuring 25 Boeing aircraft. However, commerce ministry officials say Boeing would not be able to deliver the first plane before 2037.

A similar timeline applies to Airbus. After a September 2023 meeting in Dhaka between then prime minister Sheikh Hasina and French President Emmanuel Macron, France publicly acknowledged Bangladesh's commitment to acquiring 10 Airbus aircraft.

Asked whether deliveries could be made before 2030, Edward Delahaye, head of customer accounts for Airbus India and South Asia, said production capacity could not meet that timeframe due to high global demand.

"However, aircraft may become available earlier through lessors who already have orders with Airbus," he said, adding that Airbus routinely helps customers secure interim leased aircraft.

"If Biman selects Airbus, we will encourage lessors to provide aircraft as a bridge until our deliveries begin," Delahaye said.
Why private airlines are moving faster

Bangladesh's largest carrier by fleet size, US-Bangla Airlines, operates 25 aircraft, around 16 of which are leased. Its third Airbus A330-300 joined the fleet on 21 October.

US-Bangla spokesperson Kamrul Islam said private operators have a clear advantage.

"Government procedures involve multiple committees, approvals and banking protocols. Private airlines can act much faster," he said.

Even so, he added, global aircraft shortages are also affecting private carriers. "At this moment, we need at least three to four more aircraft, but availability is limited."
Rising demand, unresolved debts

Between 2021 and 2025, around 50 lakh Bangladeshis migrated overseas for work, according to the Bureau of Manpower, Employment and Training. While domestic air travel has softened on some routes due to improved road and rail links, overall passenger traffic continues to rise.

Data from Dhaka airport show that about 1.25 crore passengers passed through the country's busiest airport in 2024, up from 1.17 crore in 2023 — a growth of roughly 7%, despite political unrest.

Amid this demand, Biman reported a record profit of Tk937 crore in the last fiscal year. However, the airline still owes more than Tk6,068 crore to the Civil Aviation Authority of Bangladesh.

Caab sources say Tk4,794 crore of the amount is surcharge, while the principal stands at Tk746 crore.

Biman's former spokesperson ABM Rowshan Kabir said most of the disputed dues date back years. "About 79% of the outstanding amount claimed by airports is surcharge. We have withheld these old bills because we do not accept them," he said.

Most investors knew this year would be different given US President Donald Trump's return to power in the world's biggest economy, but few predicted how wild the ride would get, or the end results.

World stocks recovered from April's "Liberation Day" tariffs crash to add another 20% in their sixth year of double-digit gains in the last seven, but look elsewhere and the surprises jump out.

Gold, the ultimate safe port in a storm, is set for its best year since 1979, the US dollar is down nearly 10%, oil off almost 17%, yet the junkiest of junk bonds have soared in the debt markets.

The "Magnificent Seven" US tech giants seem to have lost some of their sparkle since artificial intelligence darling Nvidia became the world's first $5 trillion company in October, and bitcoin has suddenly lost a third of its value too.

DoubleLine fund manager Bill Campbell described 2025 as "the year of change and the year of surprises", with the big moves all "intertwined" in the same seismic issues – the trade war, geopolitics and debt.

"If you were to tell me a priori that Trump was going to come in and use very aggressive trade policies and sequence it the way he has, I would not have expected valuations to be as tight or lofty as they are today," Campbell said.

A near 60% boom in European weapons makers' stocks has been driven by Trump too, following signals he will scale back Europe's military protection, forcing the region – and other NATO members – to rearm.

That's also helped drive the best year for European bank stocks since 1997, while there's also been the 70% leap in South Korean stocks and near-100% returns on defaulted Venezuelan bonds.

A trio of US rate cuts, Trump's criticisms of the Federal Reserve and broader debt worries have all impacted bond markets.

Trump's "big, beautiful" spending plans led the 30-year US Treasury yield to surge past 5.1% to its highest since 2007 in May, and though it is now back at 4.8%, the re-expanding gap to short-term rates that bankers dub "term premia" is causing jitters again.

Japan's 30-year yields are back near a record high too. The juxtaposition here is bond market volatility is at a four-year low and local-currency emerging market debt has had its best year since 2009.

AI is all part of the debt mix too. Goldman Sachs estimates the big AI "hyperscalers" have spent nearly $400 billion this year and will spend almost $530 billion next year.

All that glitters

Gold's near 70% surge is its biggest jump since 1979 and precious peers silver and platinum are up an even more dazzling 130%.

In crypto, Trump launched a memecoin and gave a presidential pardon to Binance founder Changpeng Zhao. Bitcoin hit an all-time high above $125,000 in October but then crashed to $88,000 and will end the year down around 5.5%.

The dollar's near 10% drop, meanwhile, leaves the euro up 14%, the Swiss franc and Swedish crown 14.5% and 19% higher respectively, while the yen is flat for the year.

Trump's re-engagement with Russian President Vladimir Putin has helped the rouble surge almost 36%, although it remains heavily restricted by sanctions and just leads the 28% tear from gold producer Ghana's cedi.

Poland's zloty, the Czech crown and Hungarian forint are all between 15% and 20% stronger. Taiwan's dollar jumped 8% in just two days in May, and Mexico's peso and Brazil's peso have both shrugged off the trade war drama to score double-digit gains.

"We don't think this is just a short-term phenomenon," said Jonny Goulden, head of EM fixed income strategy research at J.P. Morgan. "We think a bear market cycle for EM currencies that has lasted for 14 years now has turned here."

Argentina has been another standout. Its markets got hammered when President Javier Milei suffered a thumping regional election defeat in September, but then went wild weeks later when a $20 billion pledge from Trump helped Milei romp national midterms.

New year, new fears

It won't be a quiet start to next year either.

Trump is already revving up for midterm elections in November and is expected to name his new head of the Federal Reserve shortly, which could be crucial for the central bank's independence.

Europe and Asia will see how the French, British and Japanese governments – and their bond markets – fare, and whether Prime Minister Viktor Orban can hang on to power in Hungary in April.

Israel will hold elections in the months after, which will keep the fragile Gaza peace in focus, while Colombia and Brazil have crucial elections starting in May and October respectively.

And then there are all of the AI unknowns.

Satori Insights founder Matt King said markets are going into 2026 in a "remarkable" situation in terms of valuations and with leaders like Trump "looking for excuses" to give voters money through stimulus or tax breaks.

"There's just this ongoing risk that we are pushing the limits of what easy money can do," King said.

"Already you are starting to see the cracks appearing around the edges, in terms of growth of term premia (in the bond market), in terms of bitcoin suddenly selling off and in terms of the ongoing gold rally."