Bangladesh’s information technology (IT) exports grew 13.54 percent in the first five months of fiscal year 2025-26, buoyed by accelerating global artificial intelligence (AI) adoption and the widening digitalisation of services, according to government data.

Between July and November, the sector’s exports reached $269.84 million, up from $237.67 million in the same period a year earlier, shows Export Promotion Bureau (EPB) data. IT service exports stood at nearly $629 million in fiscal year 2024-25.

The gains were broad-based across the sector, which encompasses software development, IT-enabled services, computer consultancy, and hardware support, though the composition of growth reveals a market in transition.

SOFTWARE GETS BOOST, CONSULTANCY STUMBLES

Installation and hardware support posted the sharpest growth, nearly tripling to $3.09 million, a 136 percent year-on-year jump, reflecting rising demand for physical infrastructure alongside digital transformation.

Software exports also surged strongly, climbing 54 percent to $21.39 million, as global clients ramped up demand for custom solutions, automation tools and AI-integrated applications.

IT-enabled services, including business process outsourcing, expanded more steadily, rising 16.74 percent to $235.72 million.

Computer consultancy, however, contracted sharply, falling 53.9 percent to $9.64 million, suggesting clients increasingly prefer bundled service packages over standalone advisory engagements.

According to industry executives, AI is simultaneously expanding the market and compressing the workforce needed to serve it.

Ferdous Mahmud Shaon, managing director (MD) of Cefalo, a Dhaka-based software firm with around 300 employees, said his company has seen a substantial rise in orders as businesses worldwide race to embed AI into their operations.

“AI is not replacing software, it is actually increasing the need for new types of software,” Shaon said. “Many processes still require customised solutions, integration and ongoing development.”

At the same time, productivity gains are reshaping how companies hire. The Cefalo MD noted that AI tools are enabling companies to produce software faster and at lower cost.

“Previously a task might require ten engineers; now five can deliver the same output using AI tools,” Shaon said.

Cefalo has invested heavily in AI-assisted development tools, enabling teams to complete projects 25-50 percent faster.

While this improves competitiveness and delivery speed, it also creates pressure on employment, leading to downsizing in some cases, a trend visible across global tech companies as well.

“Companies must adopt these technologies or risk being pushed out of the market,” Shaon said, noting that AI is reducing routine work. “In the future, we will need to focus on more complex and sophisticated tasks that machines cannot easily handle.”

He also cautioned that the growth trajectory may remain moderate in the short term due to broader global uncertainties.

Despite the solid headline figure, Shaon flagged three structural risks to sustained growth: the global economic slowdown dampening client budgets, domestic instability undermining Bangladesh’s appeal as an outsourcing destination, and AI-driven workforce disruption requiring rapid reskilling.

The government has partially reduced value-added tax (VAT) on liquefied petroleum (LP) gas, aiming to stabilise prices of the essential fuel used in households and industry while keeping it affordable for consumers.

In a notification issued yesterday (17 February), the National Board of Revenue (NBR) has now scrapped VAT at the production and trader stages as well as the advance tax at import, replacing them with a single 7.5% VAT levied only at the import stage.

Under the previous system, LP gas faced 7.5% VAT at both the production and trader levels, alongside a 2% advance tax at the import stage.

The tax authority said the measure — effective until 30 June — was taken in the public interest to help stabilise LP gas prices and maintain them within consumers' purchasing capacity.

The notice stated that the government has decided, in the public interest, to partially reduce VAT on LP gas to stabilise the market price of this essential product used in industry and households and keep it within consumers' purchasing capacity.

The decision followed an application from the LPG Operators Association of Bangladesh and recommendations from the Ministry of Power Energy and Mineral Resources.

According to the NBR, the revised structure will reduce the overall VAT burden on consumers by around 20% compared with the previous system. Industry entrepreneurs say the change could translate into a modest drop in market prices.

Speaking on condition of anonymity, the chief financial officer of a leading LP gas supplier said a 12kg cylinder currently priced at Tk1,206 could fall by about Tk15 due to the VAT restructuring.

Officials maintain the tax adjustment will not hurt government revenue. An NBR official explained that compliance gaps in the LP gas supply chain had allowed some operators to evade VAT, particularly because advance tax at import was rebateable.

By shifting VAT collection to the import stage, authorities expect to reduce evasion — potentially maintaining or even increasing revenue collections.

The government’s development expenditure in the first seven months of the current fiscal year 2025-26 (FY26) has slumped to its lowest level in at least 16 years amid fiscal restraints and political disruptions.

Ministries and divisions spent just Tk 50,556 crore – a mere 21.18 percent of the total Annual Development Programme (ADP) outlay – during the period, shows Implementation Monitoring and Evaluation Division (IMED) data published yesterday.

During the same period in FY25, when operations were disrupted by a mass uprising and administrative instability, the ADP implementation rate stood at 21.52 percent. The rates were 27.11 percent and 28.16 percent in FY24 and FY23, respectively.

The slowdown is particularly acute in the health sector, which has recorded dismal implementation rates despite growing concerns about healthcare accessibility.

The Medical Education and Family Welfare Division has utilised only 2.98 percent of its allocation, while the Health Services Division has managed just 6.59 percent, according to the IMED.

Md Deen Islam, research director at Research and Policy Integration for Development (RAPID), blamed lackings in “institutional capacity” for the slow spending.

“The underperformance in the health sector reflects deeper governance challenges. In many cases, those in charge hesitate to take bold decisions, particularly when procurement-related scrutiny creates a climate of fear. That affects implementation,” he added.

The underperformance comes as Bangladesh continues to grapple with one of the world’s highest rates of out-of-pocket health expenditure.

This has led to a “structural vulnerability that demands urgent policy attention,” Islam said.

“A single chronic or terminal illness can push a non-poor family into poverty,” he warned, citing data from the Multiple Indicator Cluster Survey showing stagnation in key health indicators.

He emphasised that without immediate increases in health investment and execution, Bangladesh risks falling further behind on crucial development metrics.

The broader spending slump reflects multiple headwinds. For the current fiscal year, the government allocated Tk 238,695 crore for the ADP, including funds from autonomous bodies.

However, during the July-January period, utilisation of both state funds and foreign loans has declined sharply.

Foreign fund spending fell to approximately Tk 18,668 crore, while government funds amounted to Tk 28,052 crore, down from Tk 30,096 crore in FY25.

This deceleration comes as the interim government implemented a reduced, austerity-focused ADP that slowed or postponed certain projects initiated by the previous administration.

Planning ministry officials note that several contractors fled the country before completing their work following the mid-2024 political changeover, further hampering implementation.

RAPID’s Islam largely agreed, noting that smaller projects may have received less attention as larger initiatives were prioritised.

Infrastructure sectors have fared considerably better than social services.

Among the top 15 recipients of allocations, the Ministry of Water Resources achieved the highest implementation rate at 41.10 percent, followed by the Energy and Mineral Resources Division with 40.66 percent, and the Local Government Division with 36.91 percent.

For Islam, the health shortfall is particularly worrying given Bangladesh’s demographic outlook.

He warned, “Within 15 to 20 years, Bangladesh will gradually transition into an ageing society. Without adequate investment in health infrastructure and human resources, fiscal pressure will intensify.”

He urged authorities to view health spending through an economic lens, noting that Bangladesh maintains a low ratio of nurses and support staff compared to doctors.

“Expanding this workforce would improve service delivery while generating jobs. Health investment is not just social spending, it is also an economic strategy,” he said.

However, Islam said ADP implementation may accelerate under the newly elected political government.

A modest uptick in January offered limited encouragement. The month recorded 3.64 percent implementation of the revised ADP, marginally up from 3.55 percent in January 2024.

“As an elected party, the BNP will have to deliver on its pledges, including job creation, expanding health services, and reducing out-of-pocket costs,” Islam said.

Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh, concurred that a full-fledged political government could help strengthen ADP spending by accelerating countrywide development activities.

The reciprocal trade deal signed by the interim government with the United States has raised questions regarding the economic sovereignty of Bangladesh, especially in decisions on trade, energy and security.

Critics point to several binding and conditional clauses that allow Washington to terminate the agreement and restore steep tariffs if its concerns are not addressed.

For example, take the digital trade facilitation provision in the deal.

The agreement says that if Bangladesh signs a new digital trade deal with any country that jeopardises essential US interests, Washington may terminate the pact and reimpose the 37 percent reciprocal tariff on Bangladeshi exports.

That was the tariff rate the US had proposed in April 2025.

The same condition applies if Bangladesh enters into a new bilateral free trade or preferential agreement with what the US terms “a non-market country” -- nations it does not recognise as market economies.

The agreement says that if consultations with Bangladesh fail to resolve American concerns, the United States may withdraw from the deal and reinstate the 37 percent tariff.

The rate is high enough to sharply reduce Bangladesh’s exports to the US, a costly prospect given that the country earns roughly one-fifth of its export revenue from garments and other goods sold to American buyers.

The deal, signed on February 9 between the interim government and the Trump administration, also restricts Bangladesh from purchasing “any nuclear reactors, fuel rods, or enriched uranium from a country that jeopardises essential US interests”.

An exception applies to “the procurement of proprietary materials for which there are no alternative suppliers or technologies, or materials contracted prior to the entry into force of this agreement required for existing reactors”.

This suggests that supplies for the Rooppur Nuclear Power Plant, built with Russian technical and financial support through Russian state corporation Rosatom, may continue.

But any future nuclear project could fall under tighter scrutiny.

Citing the section on economic and national security, BRAC Executive Director Asif Saleh, in a Facebook post, said, “This is the most important and controversial part of the agreement, as it raises questions about ‘sovereignty’.”

The section adds, “The United States shall work with Bangladesh to streamline and enhance defence trade.”

On the nuclear restriction, Saleh said, “This could create risks for Bangladesh’s energy security.”

The deal also opens the door for US direct investment to “explore, mine, extract, refine, process, transport, distribute and export critical mineral resources”.

In addition, Bangladesh is required to purchase $3.5 billion worth of American agricultural products. This includes at least 700,000 tonnes of wheat annually for five years, at least $1.25 billion or 2.6 million tonnes of soy and soy products, and cotton.

Bangladesh shall also need to buy 14 Boeing aircraft initially and $15 billion worth of liquefied natural gas (LNG) over 15 years, apart from increased purchases of US military equipment and limits on defence equipment purchases from certain countries.

“It appears more like an imposed purchasing obligation than free trade,” said Saleh. “Regardless of Bangladesh’s actual needs or capacity, it effectively ensures profits for US companies.”

Mustafizur Rahman, distinguished fellow at local think tank Centre for Policy Dialogue (CPD), said bulk commodities in Bangladesh are usually imported by private sector businesses, not the government.

If traders can source goods more cheaply elsewhere, he asked, why would they buy from the United States?

In that case, Rahman said the government may have to offer incentives to persuade private importers to purchase American products, adding to fiscal pressure.

In an interview with The Daily Star last week, Professor Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), said that Bangladesh could be compelled to buy more expensive goods even when cheaper alternatives are available.

“If we find a cheaper source elsewhere, we may not be able to choose it,” he said. “This will put additional pressure on our foreign exchange.”

“How are we going to finance aircraft purchases and energy imports? There is a risk of increased reliance on foreign loans,” Raihan said.

Anwar-ul Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries, said the agreement indicates that Bangladesh should reduce its dependence on China for raw materials.

The deal also contains a provision on Rules of Origin. It says that if the benefits of the agreement accrue substantially to third countries or their nationals, either party may establish Rules of Origin to reflect the intention of the agreement.

Parvez said the third country clause should have been defined more clearly.

The agreement has not been made public, with officials citing a non-disclosure provision. Amid growing concern, the Chief Adviser’s Office said in a statement that it had inserted “an exit clause” into the deal.

“There was no scope for any country to terminate the agreement,” it added. The statement did not clarify whether Bangladesh exports would again face a 37 percent tariff, up from 19 percent, if the agreement were terminated.

A total of 2,100 metric tonnes of non-basmati coarse rice have been imported through Benapole port over six working days.

The consignments, brought in through 15 separate shipments, entered the port's 31 No transhipment yard, Port Director Shamim Hossain said today (17 February).

According to port sources, the imports took place between 27 January and 17 February. Earlier, 6,128 metric tonnes of rice were imported through the port during the four months from August to November last year.

On 18 January, the government allowed 232 importing firms to bring in 2,00,000 metric tonnes of rice, setting 3 March as the deadline for completing the imports and marketing the grain in Bangladesh.

The importing firm Haji Musa Karim & Sons brought the rice from India, while C&F agent M/s Bhuiya Enterprise is handling the clearance process.

Abdus Samad, proprietor of Haji Musa Karim & Sons, said the firm imported the 2,100 metric tonnes of coarse rice from India in 58 trucks over six days. The import cost up to Benapole port stood at Tk50 per kg, and the rice is expected to be sold in the open market at Tk51 per kg, he added.

Port Director Shamim Hossain said officials concerned have been instructed to ensure the quick release of the imported consignments from the port.

Gold prices dropped on Monday, pressured by thin trading volumes as US and China markets remained shut due to local public holidays, while some traders booked profits after last session’s 2.5 percent jump.

Spot gold fell 0.9 percent to $4,997.59 per ounce by 0726 GMT, after losing more than 1 percent earlier in the session.

US gold futures for April delivery lost 0.6 percent to $5,017.20 per ounce.

“Gold has given back some of Friday’s post-CPI gains today due to thinner trading conditions and a lack of fresh upside catalysts,” said Tim Waterer, KCM chief analyst, referring to the US consumer price inflation data.

He also pointed to profit-taking on the day.

US markets are closed for the Presidents’ Day holiday, while markets in China are closed for the Lunar New Year holiday.

The US CPI rose 0.2 percent in January after an unrevised 0.3 percent gain in December, the Labor Department’s Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast the CPI to increase by 0.3 percent.

Federal Reserve Bank of Chicago President Austan Goolsbee said on Friday that interest rates could go down, but noted that services inflation remained high.

Market participants anticipate that the central bank will keep rates steady at its next meeting on March 18. However, they are still pricing in 75 basis points of rate cuts this year, with the first one expected in July, per data compiled by LSEG.

Non-yielding bullion tends to do well in low-interest-rate environments.

“It will likely require the dollar to resume its downtrend for gold to make a push in the direction of $6,000 before year-end,” Waterer said.

On the geopolitical front, the US military is preparing for the possibility of a weeks-long operation against Iran should President Donald Trump authorise an attack, two US officials told Reuters, in what could become a far more serious conflict than previously seen between the countries.

Net inflows of foreign direct investment to China quadrupled in 2025 according to balance-of-payments data, official figures showed on Friday, signaling a structural improvement in inbound investment and renewed confidence in China’s long-term growth prospects.

Preliminary balance-of-payments data from the State Administration of Foreign Exchange showed that China recorded an increase of $76.5 billion in direct investment liabilities in 2025, representing net FDI inflows on a balance-of-payments basis.

The figure marked a sharp increase from $18.6 billion in 2024, indicating a notable rebound in inbound direct investment despite extreme external shocks due to the United States tariff and sanction policies.

With the rising foreign investment appetite, China’s direct investment deficit — the gap between outbound and inbound direct investment — narrowed sharply on a balance-of-payments basis, shrinking to $82 billion in 2025 from $153.7 billion in 2024, the SAFE said.

Guan Tao, global chief economist at BOCI China, said in a note that the improvements in FDI inflows reflect China’s effective policy response to external shocks, stronger-than-expected economic and financial resilience, and measures to stabilize foreign investment by expanding opening-up and improving the business environment.

The recovery in foreign investment also comes as multinationals become more adapted to China’s economic transformation and pursuit of innovation-driven quality growth.

Jiang Liqin, head of clients and markets for KPMG China, said that foreign enterprises are increasingly shifting from expansion to profitable models, using local digital innovations to boost efficiency, refine pricing and strengthen competitiveness in China.

For instance, US chemical company Dow has been enhancing its local innovation and production capabilities in China, with its new Cooling Science Studio at the Shanghai Dow Center opening in November.

“The studio represents a significant long-term investment, underscoring our confidence in the strength and future growth of China’s chemicals industry,” said Puay Koon Chia, president for Dow in the Asia-Pacific region.

SAFE data also showed that China posted a current account surplus of $734.9 billion in 2025, which refers to the excess of a country’s exports of goods and services, investment income and transfers over its imports and outward payments. Surplus in trade in goods came in at $1.0234 trillion last year.

On a renminbi basis, the current account surplus amounted to 5.24 trillion yuan ($759 billion), roughly equivalent to 3.7 percent of the country’s GDP — which hit 140.19 trillion yuan in 2025 — up from 2.2 percent in 2024.

While export growth propped up the surplus, Liu Chunsheng, an associate professor of international economics at the Central University of Finance and Economics, said that China’s aim is to maintain overall balance in its balance of payments, rather than run excessive surpluses, which could create pressure on both the economy and the renminbi.

Liu said that authorities have sought to ease the surplus by expanding imports, strengthening domestic demand and deepening opening-up in the services sector.

“China’s imports hit a record high in scale last year, securing the country’s position as the world’s second-largest import market for the 17th year running,” Wang Jun, deputy head of the General Administration of Customs, said at a news conference.

“It’s worth noting that several countries have politicized trade and economic issues, restricting high-tech exports to China on various pretexts. Otherwise, we’d be importing even more,” Wang said.

Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said if Western countries ease their restrictive high-tech export controls on China, Chinese demand for imported products would expand significantly, fostering more balanced trade flows.

Debt of the interim government led by Muhammad Yunus increased by Tk2,60,257 crore during the first 14 months of its tenure, even though development expenditure fell to its lowest level in seven years.

According to the latest debt bulletin published by the finance ministry, total domestic and foreign debt stood at Tk21,49,044 crore as of 30 September 2025.

Economists say although the interim administration moved away from large-scale mega projects and sharply curtailed overall development expenditure, it failed to reduce dependence on borrowing due to sluggish revenue collection, mounting repayment obligations and persistent operating expenditure.

Zahid Hussain, former lead economist of the World Bank's Dhaka office, said weak revenue mobilisation was the principal reason behind the debt increase.

"Political instability following the August transition and subsequent disruptions in tax administration contributed to lower-than-expected revenue collection, limiting the government's fiscal space," he said.

Mounting debt

When the Awami League government was formed in 2009, the country's total debt stood at approximately Tk2 lakh crore. Before the fall of the previous government on 5 August 2024, total debt had stood at Tk18,88,787 crore on 30 June that year.

Officials said the figure could rise further once borrowing data up to mid-February is fully accounted for.

The debt bulletin published in December 2024 had initially placed total debt at Tk18,32,282 crore, but the figure increased by Tk56,505 crore following the conversion of foreign loans into the new exchange rate.

A breakdown of borrowing indicates that the interim government relied more heavily on foreign sources than domestic ones. During the period, it received instalments from the International Monetary Fund and secured budget support from multiple development partners. Budget support amounted to $3.44 billion in the last fiscal year, compared with $2 billion the previous year.

As a result, foreign debt rose from Tk8.12 lakh crore to Tk9.51 lakh crore over the 14 months.

Domestic debt also increased, from Tk10.76 lakh crore a month before the previous government's fall to Tk11.97 lakh crore by last September.
ADP spending drops by Tk9,300cr YoY in 7 months

Data show that Annual Development Programme (ADP) implementation dropped to Tk1.53 lakh crore in the last fiscal year – the lowest in seven years. By comparison, ADP spending was Tk1.67 lakh crore in the fiscal 2018-19 and rose to Tk2.05 lakh crore in FY24, the final fiscal year of the previous administration.

Despite lower development outlays, borrowing continued to climb. Analysts attribute this partly to the settlement of arrears inherited from the previous government, including unpaid bills and subsidy-related liabilities.

Mahbub Ahmed, a former finance ministry senior secretary, said the interim government had borrowed largely to service old debts and manage repayment pressures.

In addition, high inflation prompted many savers to encash savings certificates, forcing the government to repay both principal and interest.

Although several projects were cancelled or suspended to rein in development expenditure, operating costs continued to outpace revenue growth.

Towfiqul Islam Khan, additional research director at the Centre for Policy Dialogue, said pressure from external debt servicing and currency depreciation also played a role in pushing up the overall debt stock.

Challenge for next govt

While the interim government cleared many of the outstanding liabilities left behind by the previous Awami League administration, it will, in turn, pass on several financial burdens to the new government. These include unpaid electricity bills, the disbursement of house rent allowances for MPO-listed teachers, and the implementation of a new national pay scale.

Tasked with transitioning away from a debt-reliant economy, the BNP – having formed a government on the back of promises such as the introduction of "Family Cards" and a revised salary structure for civil servants – must now prepare a new budget within its first 100 days.

Analysts suggest that if revenue collection targets for the upcoming financial year are not met, the new administration may find it difficult to balance the books.

The BNP government, led by Tarique Rahman, will be required to announce a new budget just three and a half months after taking office – a budget for which the interim government has already finalised the ministry-wise allocations.

Despite this, economist Zahid Hussain believes the public will still view the upcoming June budget as the BNP administration's first true fiscal test.

He remarked that the BNP must make several key political decisions in its very first budget. "However, balancing the figures will prove a significant challenge for the new administration."

Zahid noted that the BNP has made extensive promises that must be incorporated into this initial budget, including a commitment to increase allocations for health and education to 5% of GDP.

"Furthermore, they have pledged to introduce 'Family Cards' and waive agricultural loans of up to Tk10,000. These initiatives will require direct and substantial government expenditure," he said.

Zahid continued, "At the same time, the BNP has pledged to move away from a debt-reliant economy, which implies keeping the budget deficit within strict limits. The party has also committed to introducing a new salary structure for civil servants.

"Even if only one-third of the recommended new pay scale is implemented, an additional Tk30,000 crore will be required. Therefore, unless revenue collection is significantly increased, the new government will also find itself forced to depend on borrowing.

"Furthermore, if government borrowing rises, credit flow to the private sector will be further constrained – a figure that has already plummeted below 6%."

Mahbub Ahmed said that to fulfil the BNP's pledge of creating 1 crore jobs over the next five years, the new government must take effective measures to increase revenue collection while reducing debt dependency. He emphasised that the government must focus on securing the actual share of GDP that should be collected as tax.

He further noted that the interim government cancelled numerous projects and suspended funding for many others, leaving them half-finished. The new administration, Mahbub said, will need to complete projects where funds have already been spent and which promise genuine public benefit.

"This, however, will require additional financing. If this cannot be achieved through enhanced revenue collection, they too will be forced to rely on borrowing."

Mahbub further said, "To implement the BNP's commitments – including the new salary structure for civil servants, and the introduction of 'Agriculture Cards' and 'Family Cards' – vast sums of money will be required.

"While the current level of our national debt may not yet be a cause for panic, there is certainly enough reason for concern."

Towfiqul Islam Khan said that the new government must develop a pragmatic estimate for its debt repayment schedule.

"This is because, year after year, the actual amount required for foreign debt servicing consistently exceeds the projections made by the External Resources Division (ERD)."

He further noted that upon taking office, the new administration must immediately revisit the revised budget to make the interim government's projections more realistic.

"Furthermore, they must adopt a pragmatic action plan for the new budget to fulfil their electoral manifesto. Failing this, public disillusionment could set in as early as the announcement of the first budget."

Towfiqul also advised the new government to seek opportunities to renegotiate any loans taken by the previous Awami League administration where such terms are feasible.

In an interview with The Hindu, BNP Secretary General Mirza Fakhrul Islam Alamgir said the new government must begin its tenure by addressing the "burden of debt" left behind by the Awami League administration.

He emphasised the need to re-evaluate various mega-projects to identify areas of financial wastage. "Of these projects, we will retain only those that serve the national interests."

Japanese economic growth fell short of market expectations in late 2025, official data showed Monday, adding to pressure on Prime Minister Sanae Takaichi to stimulate activity after her recent election landslide.

Gross domestic product (GDP) in the world's fourth-biggest economy expanded by just 0.1 percent in the fourth quarter, undershooting market forecasts of growth of 0.4 percent.

The growth follows a contraction of 0.7 percent -- revised downwards from an earlier reading of minus 0.6 percent -- in the previous quarter.

Growth in private consumption, and private residential and corporate investments, contributed to the expansion, according to the cabinet office data.

In calendar 2025, Japan's economy grew 1.1 percent, after a 0.2-percent contraction in 2024, the data from the cabinet office showed.

On an annualised basis, GDP expanded by 0.2 percent in the three months through December, significantly weaker than the median economist estimate of 1.6 percent growth.

Takaichi became Japan's first woman prime minister in October and called snap elections for February 8.

The vote saw her Liberal Democratic Party (LDP) win a historic two-thirds majority in the lower house.

In November, her government pushed through a 21.3-trillion-yen ($139-billion) stimulus package aimed at boosting growth.

It included energy subsidies, cash handouts, and investment incentives in key fields like semiconductors and artificial intelligence.

It also included funds for expanded spending on defence, as China increases military activities in the wider region.

Her spending plans have however worried investors.

Japan's debts are more than twice the size of the country's economy, with the highest ratio among advanced economies.

Last month, yields on long-term Japanese bonds hit record highs after Takaichi pledged temporarily to exempt food from a consumption tax to ease the pain of inflation on households.

"The minuscule rebound in activity last quarter may embolden PM Takaichi to press ahead with even more fiscal loosening," Marcel Thieliant at Capital Economics said Monday.

The weak growth "implies that the large supplementary budget passed at the end of November provided no boost to public spending last quarter just yet," Thieliant said in a note.

"In fact, sluggish economic activity increases the chances that Takaichi will not only press ahead with suspending the sales tax on food but enact a supplementary budget during the first half of the fiscal year that starts in April already rather than wait until the end of this year," he added.

The weak growth is however not expected to deter the Bank of Japan from hiking interest rates later this year, according to economists.

The much-debated digital banking licence has yet to be granted, as a board meeting yesterday chaired by Bangladesh Bank Governor focused on outlining the framework for evaluating applicant institutions, officials confirmed.

The meeting took place at the central bank around 3pm, with deputy governors and board members of the relevant divisions in attendance. Earlier in the morning, at 11am, the Bangladesh Bank Officers Welfare Council held a press briefing, alleging that the meeting had been convened hastily ahead of the formation of the newly elected government, ostensibly to push through licences for a controversial digital bank.

Dismissing the welfare council's assertion, Bangladesh Bank spokesperson Arief Hossain Khan explained, "The meeting was solely about presenting to the board how applications would be assessed and scored," stressing that this marked only the initial stage of the licensing process.

A board member, speaking on condition of anonymity, confirmed that 13 institutions had been shortlisted for initial assessment. A dedicated Digital Bank Assessment Team will score applicants based on technical and business capabilities, with the highest-ranked institutions to be considered for licensing in later stages.

At a press briefing, Officers Welfare Council General Secretary Golam Mostafa Shraban questioned the timing of the 16 February session, citing the recent election and ongoing government formation. Convening an emergency board session on 16 February, he argued, could raise questions about the central bank's transparency and neutrality.

He further cited a conflict of interest, alleging that an applicant group currently being considered for the licence had previously been chaired by the current governor of the central bank, and warned that issuing a licence amid a fragile banking sector required careful scrutiny.

The welfare council demanded the postponement of the session and called for the annulment of any contractual appointments of advisers, consultants, or officials until a proper, transparent evaluation process is ensured.

The 13 applicants include British Bangla Digital Bank PLC; Digital Banking of Bhutan of DK Bank, Bhutan; Amar Digital Bank backed by 22 microfinance institutions; 36 Digital Bank PLC initiated by 16 entrepreneurs; Booster of Robi Axiata Limited; Amar Bank backed by several private entities; App Bank of UK-based expatriates; Nova Digital Bank of VEON and Square; Maitree Digital Bank PLC of microfinance lender ASA; Japan Bangla Digital Bank of DBL Group; Munafa Islami Digital Bank of Akij Resources; bKash Digital Bank of bKash shareholders; and Upokari Digital Bank of IT Solution Limited.

The reciprocal trade deal signed by the interim government with the United States has raised questions regarding the economic sovereignty of Bangladesh, especially in decisions on trade, energy and security.

Critics point to several binding and conditional clauses that allow Washington to terminate the agreement and restore steep tariffs if its concerns are not addressed.

For example, take the digital trade facilitation provision in the deal.

The agreement says that if Bangladesh signs a new digital trade deal with any country that jeopardises essential US interests, Washington may terminate the pact and reimpose the 37 percent reciprocal tariff on Bangladeshi exports.

That was the tariff rate the US had proposed in April 2025.

The same condition applies if Bangladesh enters into a new bilateral free trade or preferential agreement with what the US terms “a non-market country” -- nations it does not recognise as market economies.

The agreement says that if consultations with Bangladesh fail to resolve American concerns, the United States may withdraw from the deal and reinstate the 37 percent tariff.

The rate is high enough to sharply reduce Bangladesh’s exports to the US, a costly prospect given that the country earns roughly one-fifth of its export revenue from garments and other goods sold to American buyers.

The deal, signed on February 9 between the interim government and the Trump administration, also restricts Bangladesh from purchasing “any nuclear reactors, fuel rods, or enriched uranium from a country that jeopardises essential US interests”.

An exception applies to “the procurement of proprietary materials for which there are no alternative suppliers or technologies, or materials contracted prior to the entry into force of this agreement required for existing reactors”.

This suggests that supplies for the Rooppur Nuclear Power Plant, built with Russian technical and financial support through Russian state corporation Rosatom, may continue.

But any future nuclear project could fall under tighter scrutiny.

Citing the section on economic and national security, BRAC Executive Director Asif Saleh, in a Facebook post, said, “This is the most important and controversial part of the agreement, as it raises questions about ‘sovereignty’.”

The section adds, “The United States shall work with Bangladesh to streamline and enhance defence trade.”

On the nuclear restriction, Saleh said, “This could create risks for Bangladesh’s energy security.”

The deal also opens the door for US direct investment to “explore, mine, extract, refine, process, transport, distribute and export critical mineral resources”.

In addition, Bangladesh is required to purchase $3.5 billion worth of American agricultural products. This includes at least 700,000 tonnes of wheat annually for five years, at least $1.25 billion or 2.6 million tonnes of soy and soy products, and cotton.

Bangladesh shall also need to buy 14 Boeing aircraft initially and $15 billion worth of liquefied natural gas (LNG) over 15 years, apart from increased purchases of US military equipment and limits on defence equipment purchases from certain countries.

“It appears more like an imposed purchasing obligation than free trade,” said Saleh. “Regardless of Bangladesh’s actual needs or capacity, it effectively ensures profits for US companies.”

Mustafizur Rahman, distinguished fellow at local think tank Centre for Policy Dialogue (CPD), said bulk commodities in Bangladesh are usually imported by private sector businesses, not the government.

If traders can source goods more cheaply elsewhere, he asked, why would they buy from the United States?

In that case, Rahman said the government may have to offer incentives to persuade private importers to purchase American products, adding to fiscal pressure.

In an interview with The Daily Star last week, Professor Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), said that Bangladesh could be compelled to buy more expensive goods even when cheaper alternatives are available.

“If we find a cheaper source elsewhere, we may not be able to choose it,” he said. “This will put additional pressure on our foreign exchange.”

“How are we going to finance aircraft purchases and energy imports? There is a risk of increased reliance on foreign loans,” Raihan said.

Anwar-ul Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries, said the agreement indicates that Bangladesh should reduce its dependence on China for raw materials.

The deal also contains a provision on Rules of Origin. It says that if the benefits of the agreement accrue substantially to third countries or their nationals, either party may establish Rules of Origin to reflect the intention of the agreement.

Parvez said the third country clause should have been defined more clearly.

The agreement has not been made public, with officials citing a non-disclosure provision. Amid growing concern, the Chief Adviser’s Office said in a statement that it had inserted “an exit clause” into the deal.

“There was no scope for any country to terminate the agreement,” it added. The statement did not clarify whether Bangladesh exports would again face a 37 percent tariff, up from 19 percent, if the agreement were terminated.

On the occasion of Ramadan, trading at the Dhaka Stock Exchange (DSE) will begin at 10am and continue until 1:40pm, while the post-closing session will be held from 1:40pm to 1:50pm.

Official office hours at the DSE will run from 9am to 3:30pm.

Under the regular schedule, DSE trading typically takes place from 10am to 2:30pm.

Green Delta Insurance has announced a 27% cash dividend for the financial year ending 31 December 2025, an increase from the 25% payout provided to shareholders the previous year.

The dividend recommendation was made during a board meeting on Sunday, prompting a positive market reaction yesterday as the company's share price rose by 2.28% to close at Tk58.90 on the Dhaka Stock Exchange.

To approve the dividend and audited financial statements, the company will conduct an annual general meeting (AGM) on 31 March. The record date is 8 March.

In 2025, the company's consolidated earnings per share (EPS) stood at Tk5.44, which was up from Tk5.39 compared to the same period of the previous year.

Its consolidated net asset value per share stood at Tk70.53 end of December 2025. Its consolidated net operating cash flow per share rose by Tk7.72 in 2025 compared to 2024, mainly due to higher premium income and better investment returns.

The company has announced that the Board of Directors of Green Delta Insurance has approved a decision to acquire a 40% equity stake in Green Delta Dragon Asset Management Co Ltd.

The shares will be purchased from Dragon Capital Management (HK) Ltd, which currently holds that portion of the asset management company.

Following the completion of the transaction, Green Delta Insurance will increase its ownership in Green Delta Dragon Asset Management, strengthening its position in the asset management business and expanding its footprint in the financial services sector. The acquisition is subject to the completion of necessary regulatory and corporate approvals.

Listed on the stock exchange since 1989, Green Delta Insurance's shareholding structure, according to DSE data as of 29 January 2026, comprises sponsors and directors holding 30.58%, institutional investors 21.95%, foreign investors 4.60%, and general shareholders 41.87%.

Stocks in Bangladesh saw a slight correction yesterday after a consecutive three-day rise, mainly due to a profit-booking tendency among investors.

Correction refers to a short- to medium-term decline of 10 percent or more, but less than 20 percent, in a major index or individual stock from its recent peak.

It acts as a market reset, revaluing overvalued assets back to their long-term trend, and is often considered a healthy, temporary pullback rather than a long-term recession.

The DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), fell 11 points, or 0.19 percent, to 5,589. The DS30, the index of blue-chip companies, dropped 9 points to 2,135, while the shariah-based DSES declined 8 points to 1,118.

With all the indices falling, DSE turnover also fell 1.4 percent, to Tk 1,257 crore. Among the traded stocks, 153 advanced, 218 declined, and 26 remained unchanged.

A top official of a leading brokerage firm said there was slight selling pressure on the well-performing stocks that had surged in the previous three trading days. Some of these companies advanced by 10 to 15 percent during that period, so it is common for investors to book profits.

As the turnover was high, it shows that there were enough buyers for these shares. A trend was seen in the market where low-performing companies have been rising for several days, including yesterday, which is not a good sign for the market, he added.

By rising around 10 percent, New Line Clothing, Bangladesh Industrial Finance, and S Alam Cold Rolled Steel Mills made it to the top gainers’ list. All three companies belong to the Z category.

On the other hand, ICB Islamic Bank, Prime Textile, and Ring Shine were the top losers, dropping 10 percent, 6 percent, and 5 percent respectively.

Although all indices of the DSE fell, the major index of the Chittagong Stock Exchange (CSE), CASPI, rose. It gained 7 points to reach 15,526. Among the traded issues, 116 rose, 90 fell, and 22 remained unchanged.

GPH Ispat Ltd's sponsor Mohammed Almas Shimul is set to transfer 2 crore shares to his son and daughter, both general shareholders of the company, marking the entry of the second generation into the company's shareholding structure.

Currently, Almas Shimul, additional managing director of GPH Ispat, holds around 5.24 crore shares, equivalent to 10.82% of the company's total outstanding shares.

In a disclosure posted on the stock exchange website yesterday, he expressed his intention to transfer a 4.13% stake — one crore shares each — to his daughter, Sobha Soha, and son, Saihan Sadik Pial, as a gift.

Following completion of the transfer, each recipient will hold a 2.06% stake in the company. Based on the current market price, the value of the two crore shares stands at approximately Tk35 crore as of yesterday, its shares are traded at Tk17.50 each at the Dhaka Stock Exchange (DSE).

The disclosure said the shares will be transferred as gifts outside the exchange's trading system within 30 working days after approval from the Chittagong Stock Exchange.

In January 2025, Mohammed Jahangir Alam, sponsor and managing director of GPH Ispat, transferred 2.5 crore shares — 1.25 crore each — from his 11.41 crore holding to Sadman Syka Sefa and Salehin Musfique Sadaf, both general shareholders of the company.

A recent example is Crown Cement PLC, one of Bangladesh's leading cement manufacturers, which is entering a new phase of leadership as second-generation members of its sponsor families assume board-level roles — a transition that signals a significant shift in the company's long-term governance and succession planning.

According to the company's annual report for FY25, Crown Cement has appointed two second-generation directors to its board – Solaiman Kabir, son of Vice Chairman Alamgir Kabir, and Mushsharat Mahajabin, daughter of sponsor director and Additional Managing Director Mizanur Rahman Mollah.

In April last year, Alamgir Kabir transferred 29.70 lakh shares to his son, while Mizanur Rahman Mollah gifted 30 lakh shares to his daughter through transactions executed on the DSE.

GPH Ispat manufactures and trades iron, steel and other metallic or allied materials. Its factory commenced the commercial production on 21 August 2008.

The company reported revenue of Tk2,361 crore in the first half of the current fiscal year, down from Tk2,884 crore in the same period a year earlier.

Profit fell sharply to Tk4.55 crore from Tk31.38 crore year-on-year. For FY25, the company incurred a loss of Tk8.71 crore, though it still paid a 5% cash dividend to shareholders.

The indices of the Dhaka Stock Exchange snapped their election-driven rally today (16 February), ending a three-session winning streak, as cautious investors moved to lock in profits and shifted funds to lucrative, undervalued, and promising stocks on the trading floor.

The benchmark DSEX went down 11 points to close at 5,590. The blue-chip DS30 index decreased 9 points to settle at 2,136, while the Shariah-based DSES shed 9 points to end at 1,119.

Market turnover decreased 0.39% to Tk1,270 crore, down from Tk1,275 crore in the previous session. Of the 397 issues traded, 153 advanced, 218 declined, and 26 remained unchanged.

According to market insiders, the stock market began to climb a few days ahead of the election, with the upward trend continuing for three consecutive trading sessions. Many investors took positions in anticipation of greater political stability after the election.

However, as several formalities related to the formation of the new government are still pending, cautious investors chose to book profits yesterday after the recent rally. Following several days of gains, they locked in returns and moved to a more defensive stance. At the same time, there was visible activity in switching funds into undervalued, fundamentally strong, and promising companies.

Prior to the election, the market had been under pressure for an extended period due to multiple uncertainties. Over the past year, prolonged political uncertainty and several regulatory decisions that failed to restore investor confidence contributed to a sustained downturn. Many retail investors exited the market, while institutional and high-net-worth investors largely remained inactive. As a result, share prices of even fundamentally sound companies declined significantly.

Market analysts say political uncertainty was the primary driver of investor sentiment during this period. Because of that uncertainty, large investors were reluctant to take risks, which kept overall trading volumes subdued and reduced market depth.

Now that the election has been completed and a new political government is set to assume responsibility, analysts believe the situation could gradually improve. If policy stability is ensured and consistency in decision-making is maintained, investor confidence is likely to return. That, in turn, could encourage greater participation from large investors, increase trading volumes, and pave the way for a stronger recovery in the capital market.

According to analysts, a stable political environment would also create a more favorable climate for business and investment, ultimately supporting further growth in the stock market.

The Telecommunication sector posted the highest loss, declining by 1.56%, followed by Engineering at 0.81%, Food and Allied at 0.77%, Fuel and Power at 0.35%, Bank at 0.31%, and NBFI at 0.10%. In contrast, the Pharmaceutical sector edged up by 0.13%. Block trades accounted for 2.6% of the total market turnover.

The Chittagong Stock Exchange closed on a mixed note. The CSCX index fell 14 points to 9,541, while the CASPI index rose 6 points to finish at 15,526, reflecting mixed sentiment across the market.

The Dhaka Stock Exchange (DSE) has issued a query to Dulamia Cotton Spinning Mills, a listed textile company, for failing to submit its dividend distribution compliance report within the stipulated timeframe.

Under the rules of the Bangladesh Securities and Exchange Commission (BSEC) and Regulation 29 of the listing regulations, listed companies are required to submit a dividend compliance report to both the exchange and the commission within seven working days of completing dividend payments.

Shareholders of Dulamia Cotton approved a 3% cash dividend for FY25 at the annual general meeting (AGM) held on 3 December. Following shareholder approval, the company was required to disburse the dividend within one month and file the compliance report within seven working days.

However, the DSE said the company failed to submit the report in accordance with regulatory requirements, prompting the issuance of a query letter.

According to DSE data, Dulamia Cotton has remained non-operational since 14 June 2020. Despite having no revenue in the first half of the current fiscal year due to continued closure, the company reported a profit of Tk22 lakh, with earnings per share (EPS) of Tk0.29 for the July-December period.

In the corresponding period of the previous fiscal year, it posted a profit of Tk17 lakh and EPS of Tk0.23. Notably, although the company has no active operations, its share price has continued to rise. The stock closed at Tk138.5 yesterday, up from Tk124.4 on 25 January.

The National Board of Revenue (NBR) has extended the deadline for submitting online VAT returns for the January 2026 tax period through its e-VAT system until 22 February, citing public interest.

According to an official order, the extension was granted due to a prolonged spell of government holidays surrounding Shab-e-Barat and the 13th national election, which limited business operations and affected compliance activities.

In addition, taxpayers faced further difficulties on 15 February when the OTP server of the e-Challan system experienced downtime, preventing many from completing their return submissions on time.

In view of these circumstances, the revenue authority exercised its legal powers under Section 64 (1A) of the Value Added Tax and Supplementary Duty Act, 2012 to allow additional time for filing returns.

The decision aims to ensure that businesses and VAT-registered entities are not penalised for delays caused by factors beyond their control.

Officials said the extended timeline will help taxpayers complete the submission process smoothly after disruptions linked to the holidays and technical issues.

The NBR urged all VAT-registered entities to use the extended period responsibly and submit their January 2026 returns within the new timeframe to avoid penalties and ensure compliance with tax regulations.

The Bangladesh Securities and Exchange Commission (BSEC) has fined The City Bank, its fund manager, and five individuals for manipulating the shares of Agni Systems over a five-month trading period in 2024.

According to the regulator's monthly enforcement action report for January, City Bank has been fined Tk1 lakh despite incurring a capital loss of Tk1.55 crore from trades conducted during the investigation period.

Sanowar Khan, the bank's portfolio manager at the time, has been fined Tk1.51 crore against a capital gain of Tk1.53 crore.

His wife, Asmaul Husna, who earned Tk15 lakh, has been fined Tk1 lakh, while his brother, Anwer Parvez Khan, has been fined Tk2 lakh against a gain of Tk2.46 lakh.

Among the other individuals penalised, Abu Taher Shikder has been fined Tk62 lakh against a gain of Tk65.46 lakh. Umma Salma Nipa, who incurred a loss of Tk11.43 lakh, has been fined Tk2 lakh, and Biplob Sheikh has been fined Tk4.30 lakh against a gain of Tk4.77 lakh.

The BSEC said the manipulation took place between 25 June and 18 November 2024. During the 68 trading sessions under review, the total buy volume stood at 4.61 crore shares, while the sell volume amounted to 3.87 crore shares. Over the period, Agni Systems' share price rose sharply from Tk24.5 on 25 June to Tk41.2 on 10 October, marking a 68% increase. The price later declined to Tk28.8 by 18 November.

After reviewing trade monitoring data from the surveillance department of the Dhaka Stock Exchange, the regulator found that the accused parties were heavily involved in trading Agni Systems shares and conducted a series of transactions that influenced the share price on multiple dates.

According to the commission, the individuals violated the Securities and Exchange Ordinance, 1969 by directly and indirectly executing a series of transactions that created an artificial appearance of active trading and drove up the price of the shares.

In its response to the BSEC's show-cause notice, City Bank stated that its capital market portfolio had previously been managed by City Bank Capital Resources Limited, a wholly owned subsidiary.

Sanowar Khan was appointed as capital market fund manager with effect from 10 June 2024 and was granted authority to oversee stock market trading activities, making him solely responsible for share trading and securities analysis.

The bank claimed that Sanowar did not disclose his personal trading activities or those conducted by his relatives. It said it only became aware of these transactions following the commission's show-cause notice dated 18 August 2025. Monitoring independent personal or institutional trading activities falls outside the scope of the bank's capital market portfolio oversight, the bank added, asserting that it had no knowledge of or influence over the trades executed in the accounts of Khan or his relatives.

City Bank further noted that while it incurred a realised loss of Tk1.55 crore from Agni Systems trades during the investigation period, the fund manager and his family members made a combined realised gain of Tk1.70 crore.

Following receipt of the BSEC's enquiry letters, the bank said it removed Sanowar from the fund manager position with effect from 19 August 2025. It also reviewed its investment policy and introduced stricter ethical guidelines governing personal or associated trading activities.

The enforcement action comes amid the regulator's continued efforts to curb market manipulation and restore investor confidence through closer surveillance and stricter penalties for violations in the capital market.

The government’s development expenditure in the first seven months of the current fiscal year 2025-26 (FY26) has slumped to its lowest level in at least 16 years amid fiscal restraints and political disruptions.

Ministries and divisions spent just Tk 50,556 crore – a mere 21.18 percent of the total Annual Development Programme (ADP) outlay – during the period, shows Implementation Monitoring and Evaluation Division (IMED) data published yesterday.

During the same period in FY25, when operations were disrupted by a mass uprising and administrative instability, the ADP implementation rate stood at 21.52 percent. The rates were 27.11 percent and 28.16 percent in FY24 and FY23, respectively.

The slowdown is particularly acute in the health sector, which has recorded dismal implementation rates despite growing concerns about healthcare accessibility.

The Medical Education and Family Welfare Division has utilised only 2.98 percent of its allocation, while the Health Services Division has managed just 6.59 percent, according to the IMED.

Md Deen Islam, research director at Research and Policy Integration for Development (RAPID), blamed lackings in “institutional capacity” for the slow spending.

“The underperformance in the health sector reflects deeper governance challenges. In many cases, those in charge hesitate to take bold decisions, particularly when procurement-related scrutiny creates a climate of fear. That affects implementation,” he added.

The underperformance comes as Bangladesh continues to grapple with one of the world’s highest rates of out-of-pocket health expenditure.

This has led to a “structural vulnerability that demands urgent policy attention,” Islam said.

“A single chronic or terminal illness can push a non-poor family into poverty,” he warned, citing data from the Multiple Indicator Cluster Survey showing stagnation in key health indicators.

He emphasised that without immediate increases in health investment and execution, Bangladesh risks falling further behind on crucial development metrics.

The broader spending slump reflects multiple headwinds. For the current fiscal year, the government allocated Tk 238,695 crore for the ADP, including funds from autonomous bodies.

However, during the July-January period, utilisation of both state funds and foreign loans has declined sharply.

Foreign fund spending fell to approximately Tk 18,668 crore, while government funds amounted to Tk 28,052 crore, down from Tk 30,096 crore in FY25.

This deceleration comes as the interim government implemented a reduced, austerity-focused ADP that slowed or postponed certain projects initiated by the previous administration.

Planning ministry officials note that several contractors fled the country before completing their work following the mid-2024 political changeover, further hampering implementation.

RAPID’s Islam largely agreed, noting that smaller projects may have received less attention as larger initiatives were prioritised.

Infrastructure sectors have fared considerably better than social services.

Among the top 15 recipients of allocations, the Ministry of Water Resources achieved the highest implementation rate at 41.10 percent, followed by the Energy and Mineral Resources Division with 40.66 percent, and the Local Government Division with 36.91 percent.

For Islam, the health shortfall is particularly worrying given Bangladesh’s demographic outlook.

He warned, “Within 15 to 20 years, Bangladesh will gradually transition into an ageing society. Without adequate investment in health infrastructure and human resources, fiscal pressure will intensify.”

He urged authorities to view health spending through an economic lens, noting that Bangladesh maintains a low ratio of nurses and support staff compared to doctors.

“Expanding this workforce would improve service delivery while generating jobs. Health investment is not just social spending, it is also an economic strategy,” he said.

However, Islam said ADP implementation may accelerate under the newly elected political government.

A modest uptick in January offered limited encouragement. The month recorded 3.64 percent implementation of the revised ADP, marginally up from 3.55 percent in January 2024.

“As an elected party, the BNP will have to deliver on its pledges, including job creation, expanding health services, and reducing out-of-pocket costs,” Islam said.

Ashikur Rahman, principal economist at the Policy Research Institute of Bangladesh, concurred that a full-fledged political government could help strengthen ADP spending by accelerating countrywide development activities.