Bangladesh’s economy grew 3.49 percent in the fiscal year 2024–25, the slowest expansion in at least three years, owing to weaker performances in the agriculture and services sectors.

The final estimate of gross domestic product (GDP), a measure of the final value of goods and services produced in an economy in a certain period, is lower than the provisional estimate of 3.97 percent estimated earlier by the Bangladesh Bureau of Statistics (BBS).

The national statistical agency released the final calculation of GDP today, saying that only the industrial sector grew at a faster pace in the fiscal year 2024–25 than in the previous year.

Factory output increased by 3.71 percent in FY25, up 0.20 percentage points from the previous year.

Agriculture, the second-biggest employing sector, recorded 2.42 percent growth in FY25, down from 3.30 percent a year earlier.

The services sector, the biggest contributor to GDP, expanded by 4.35 percent in the last fiscal year, slower than the 5.09 percent recorded in FY24.

In FY24, the economy grew 4.22 percent, said the BBS.

For the current fiscal year 2025–26, sluggish economic growth is projected to continue, according to forecasts by multilateral agencies such as the International Monetary Fund.

The Centre for Policy Dialogue (CPD) has urged the government to halt new fossil fuel-based power projects, revise what it called inflated demand projections and bolster parliamentary oversight to put Bangladesh's power and energy sector on a fiscally sustainable and climate-aligned path.

CPD said Bangladesh's power and energy sector is at risk of fiscal stress, stranded assets and stalled renewable energy transition due to overestimated demand projections, fossil fuel lock-in and weak regulatory transparency.

Presenting a research paper titled 'New Government's Priorities in Addressing Socio-economic Challenges: Introducing Knowledge-based Decision Making in the Executive and Legislative Process' at CPD's Dhanmondi office today (28 February), CPD Research Director Khondaker Golam Moazzem outlined a series of structural weaknesses in the sector and recommended urgent reforms within the first 180 days of the new government.

The study identified 'Power and Energy: Reviving for Energy Transition' as the seventh priority sector and found that procedural transparency, accountability, and implementation efficiency remain the weakest pillars of decision-making in this sector.

CPD noted that existing master plans project electricity demand to reach 40-50 gigawatts (GW) by 2040, while independent estimates suggest a more realistic requirement of around 30 GW.

The study warned that inflated GDP-demand linkages, rather than actual industrial consumption data, have been used to justify aggressive expansion targets.

This could lead to massive surplus capacity that would be 'difficult to undo', increasing fiscal burdens through long-term contractual obligations.

Without structural reforms and parliamentary oversight, the sector risks repeating past mistakes of overcapacity, high tariffs and fiscal stress
Khondaker Golam Moazzem, Research Director, CPD

Spatial planning mismatch was also highlighted, with Dhaka receiving disproportionately high projections compared to emerging industrial hubs such as Chattogram and Sylhet.

CPD recommended that Bangladesh Power Development Board (BPDB) and Power Cell adopt rigorous econometric forecasting methods and subject revised projections to independent validation and parliamentary review.

The report underscored the structural burden of capacity payments to independent power producers (IPPs), even for idle plants. Despite recent tariff hikes reaching Tk 8.95 per unit in 2024 — fiscal stress persists.

According to the study, plant-by-plant payment details and the rationale behind tariff adjustments lack transparency, while public hearings by the Bangladesh Energy Regulatory Commission (Berc) have often been bypassed.
Banking sector remains most fragile area of Bangladesh's economy: CPD

CPD recommended introducing a 'No Electricity, No Pay' clause in future Power Purchase Agreements (PPAs) to eliminate unconditional capacity charges. It also called for renegotiation of rigid 'take-or-pay' contracts, though acknowledging the legal complexity involved.

The think tank warned of growing dependence on imported LNG and coal, raising concerns about stranded assets and fiscal instability.

It said long-term price volatility impacts are systematically downplayed and that insufficient assessment has been conducted regarding risks associated with new LNG terminals and coal-based infrastructure.

CPD proposed adopting a clear 'No New Fossil Fuel-Based Power Generation' policy and urged reassessment of planned coal projects, including Matarbari Phase 2, through parliamentary debate to ensure fiscal and climate accountability.

The study also called for scaling up regional power trading with Nepal and Bhutan to import hydropower and balance solar intermittency.

While the interim government approved the Renewable Energy Policy 2025, CPD observed that grid absorption capacity for variable renewable energy (VRE) remains capped at 20%, and smart grid implementation has been deferred to 2040-2050.
Next govt must go for swift reforms to stabilise economy: CPD

Private renewable energy developers face bureaucratic hurdles in securing grid interconnection approvals, the report said.

CPD recommended that Power Grid Bangladesh (PGB) conduct a technical grid stress test to determine upgrades required to absorb at least 30% renewable energy by 2030.

It also proposed establishing an Independent System Operator (ISO) to separate grid management from BPDB and ensure institutional neutrality.

A 'Resource-to-Grid Data Hub' integrating real-time renewable energy potential mapping across districts should be developed under parliamentary monitoring, the study added.

In the primary energy segment, CPD highlighted a persistent daily gas shortage of around 1,200 million cubic feet per day (mmcfd), with total demand at 3,800 mmcfd against supply of just over 2,600 mmcfd, including LNG imports.
CPD's Fahmida calls for 'comprehensive economic reforms'

The report argued that increasing LNG imports alone would deepen financial burdens and recommended prioritising domestic gas exploration instead.

It stressed that overemphasis on new LNG infrastructure and domestic coal exploration reflects weaknesses in evidence-based analysis and stakeholder engagement.

A central theme of the CPD study is embedding knowledge-based decision-making in both executive and legislative processes.

The report called on the Parliamentary Standing Committee on Power and Energy to review all major generation, fuel mix and procurement decisions to ensure statutory compliance and transparency.

It noted that suspension of the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010 by the interim government is a positive step toward restoring competitive procurement and judicial oversight.
Govt to renegotiate Hasina-era power deals, cites fiscal stress

CPD, however, warned that without institutional restructuring, real-time data transparency and structured parliamentary scrutiny, reform efforts may remain partial.

Immediate and long-term priorities

For the next 180 days, CPD recommended:

No approval of new fossil fuel-based power plants
Independent validation of revised demand projections
Introduction of "No Electricity, No Pay" clauses in future contracts
Engagement with export-oriented industries in designing a National Solar Rooftop Programme
Institutionalising parliamentary review of all major sectoral decisions

Beyond 180 days, the study proposed grid modernisation, establishment of an Independent System Operator, zonal energy audits, smart grid pilots, and legislative-backed accountability frameworks.

Moazzem said the success of the new government would depend on its ability to align fiscal prudence, climate commitments and energy security through transparent, evidence-driven policymaking.

"Without structural reforms and parliamentary oversight, the sector risks repeating past mistakes of overcapacity, high tariffs and fiscal stress," Moazzem added.

The market share of Bangladesh in the European Union’s (EU) apparel market increased to 21.57 percent in 2025 from 20.78 percent in 2024 thanks to the rising demand for locally made apparel items in the EU.

In 2025, Bangladesh retained its position as the second-largest garment supplier to the EU, shipping apparel worth 19.41 billion euros, up from 18.31 billion euros in 2024, according to Eurostat data.

China, the largest garment exporter, held a 29.54 percent market share by exporting apparel worth 26.58 billion euros to the EU in 2025, Eurostat also reported. In 2025, the EU imported garment items worth 89.99 billion euros in total.

Turkey was the third-largest garment exporter to the EU in 2025, while India ranked fourth.

Crude oil prices jumped Friday as worries about a possible US attack on Iran rose while Wall Street stocks slid amid anxiety over artificial intelligence and data showing an uptick in US inflation.

Crude prices jumped more than three percent at one point as optimism faded following Thursday talks between the two nations that were seen as a last-ditch bid to avert war.

"With the US having called on its citizens to leave Israel and Iran, the threat of an attack on the Islamic Republic has dramatically risen, pushing the oil price to a seven-month high," said analyst Axel Rudolph at investing and trading platform IG.

The benchmark international contract, Brent, briefly rose over $73 per barrel before finishing at $72.48, up 2.5 percent.

Wall Street's main stock indices fell, with tech stocks taking a hit.

Financial services firm Block's announcement that it would slash its workforce by nearly half and rely heavily on AI to operate more efficiently sparked fresh concerns about the disruptive nature of the technology.

Stock markets soared to fresh heights last year thanks to investors piling into stocks of tech firms which are piling massive amounts of money into developing and deploying AI.

But the march higher has not been steady in recent months as concern about artificial intelligence disrupting industries occasionally triggers sudden drops in markets.

Investors have also been occasionally seized by concerns that the share prices of tech giants have risen too high and that AI may not be profitable.

"AI, the trade that drove the market higher last year, is weighing on the market this year," said Adam Sarhan of 50 Park Investments. "There's a lot of disruption and fear spreading, because we don't know how AI will impact the market."

Sarhan also pointed to Friday's report on US producer prices as a driver of negative sentiment. The index rose a greater than expected 0.5 percent in January, adding to worries the Federal Reserve could refrain from additional interest rate cuts.

Financial stocks were under pressure on lingering fears about weakness in the private credit market. Two of Friday's biggest losers in the Dow were Goldman Sachs, down 7.5 percent, and JPMorgan Chase, down 1.9 percent.

But shares of Paramount Skydance surged more than 20 percent as it stood poised to acquire Warner Bros. Discovery after Netflix ended its pursuit of the media giant in a takeover battle.

Netflix, which will garner a $2.8 billion breakup fee after being outbid, rose 13.8 percent.

In Europe, the jump in oil and metals prices helped London's FTSE 100 stock index buck the trend, rising to a fresh record high as energy and resources stocks rose.

Frankfurt ended the day flat and Paris fell.

The country's private sector credit growth plummeted to an all-time low of 6.03% in January, as prolonged political instability and a high-interest-rate regime forced businesses to stall expansion plans and led banks to adopt a highly cautious lending stance.

According to the latest data from the Bangladesh Bank, credit growth edged down from 6.1% in December, continuing a sharp decline from the 10.13% recorded in July 2024.

Although a brief spike to 6.58% occurred in November, analysts attribute this to loan restructuring ahead of the 12 February national election rather than genuine new investment in productive sectors.

In its monetary policy statement for January-June 2026, the central bank attributed the slowdown to tight monetary conditions, rising government borrowing to finance the budget deficit and subdued demand for loans amid continued uncertainty surrounding new investment decisions.

The decline has been steady over recent months, with growth recorded at 6.29% in September, 6.35% in August, 6.52% in July, 6.40% in June, 7.17% in May and 7.5% in April. In contrast, private sector credit growth stood at 10.13% in July 2024 before falling sharply following the political transition in August that year.

Economists say prolonged political uncertainty, weak business confidence and structural weaknesses in banks have discouraged investment, prompting many businesses to postpone expansion plans despite the BNP securing a landslide victory in the February election.

Newly appointed central bank Governor Md Mostaqur Rahman has indicated that policy support will be introduced to revive private sector lending and restore economic momentum.

On his first day in office, he said lending rates would be gradually reduced to encourage investment and that reopening closed factories and business establishments would be essential to revitalise economic activity – signalling a possible shift away from the prolonged contractionary monetary stance.

Bankers, however, say high borrowing costs are only part of the challenge. Syed Mahbubur Rahman, managing director of Mutual Trust Bank, told TBS that banks are currently extending loans at even around 11% interest while paying similar rates on deposits, leaving minimal margins.

He noted that although high lending rates remain a constraint, investors prioritise reliable infrastructure – including gas, electricity and port facilities – before financing considerations.

Persistent energy shortages and infrastructure bottlenecks, he said, have prevented both existing businesses from expanding and new investors from entering the market.

A major factor behind the credit slowdown has been increased government borrowing from banks. During July-December of the 2025-26 fiscal year, net credit to the government reached Tk50,782 crore, equivalent to 43% of the revised annual target of Tk1.18 lakh crore.

Net government borrowing from the banking system rose 32.8% by December 2025, effectively crowding out private borrowers in an already tight liquidity environment.

Banks are simultaneously struggling with soaring non-performing loans, which climbed to a record Tk6.44 lakh crore at the end of September 2025 – roughly one-third of total outstanding loans.

Elevated default levels have weakened bank capital positions, increased provisioning requirements and made lenders more cautious in approving new credit.

Liquidity pressures and slow deposit growth have further constrained lending capacity. In an effort to curb inflation, the central bank earlier raised its policy rate to 10%, pushing commercial lending rates close to 15% and discouraging businesses, particularly small and medium-sized enterprises, from taking fresh loans.

The effects of weak credit expansion are increasingly visible across the economy. Imports of capital machinery have declined, signalling slower industrial growth, while reduced investment has dampened money circulation. Many factories are operating below capacity, consumer demand remains subdued and private sector job creation has slowed.

The central bank had set a target of 9.8% private sector credit growth for July-December 2025, but actual performance fell significantly short.

Experts warned that if lending growth fails to recover, industrial output could weaken further, private investment may remain stagnant and employment recovery could face prolonged delays.

Escalating hostilities involving Iran, the United States and Israel have triggered fresh concerns over Bangladesh's energy security, with economists and business leaders warning of potential fuel supply disruptions and sharp spikes in global energy prices.

Analysts said the latest US strikes on Iranian targets and Tehran's retaliatory attacks on American military bases across the Middle East could disrupt shipments of crude oil and liquefied natural gas (LNG) from Bangladesh's principal suppliers — Saudi Arabia, the United Arab Emirates and Qatar.

If the confrontation escalates or becomes prolonged, they cautioned, the economic fallout for Bangladesh could surpass the shock experienced during the Russia-Ukraine War, exposing the country to risks in fuel supply stability, foreign exchange reserves and inflation management.

Particular anxiety centres on the Strait of Hormuz, a critical maritime chokepoint through which roughly 40% of global oil and gas shipments pass. Bangladesh's imports of LNG, LPG and crude oil transit this route, meaning any disruption could immediately affect domestic energy availability.

Markets react to tensions

Energy markets have already reacted to rising tensions. Global oil prices increased by about 2% amid fears of military escalation, while international forecasts suggest crude prices could climb to $80 per barrel or higher, with some projections warning of prices reaching $110 if the conflict intensifies.

Azam J Chowdhury, chairman of East Coast Group, told TBS that retaliatory strikes across the Middle East could halt fuel loading operations at regional refineries, effectively suspending supplies of oil, gas, LNG and LPG.

He noted that Bangladesh lacks the capacity to refine crude oil sourced from alternative producers, making it dependent on Middle Eastern suppliers. In the event of prolonged disruption, the country may be forced to import refined fuel from the spot market at significantly higher prices, he warned.

Azam added that LNG shipments from Qatar could also face interruption following missile attacks in the region, warning that Bangladesh, which imports around 12 to 13 LNG cargoes monthly, could face serious economic consequences.

He urged the government to immediately secure alternative supply arrangements, including agreements with global suppliers such as Malaysia's Petronas, and increase imports of refined petroleum products from international markets.

Risks to industry and inflation

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said rising fuel prices would increase electricity generation costs and worsen existing gas and power shortages, further disrupting industrial production.

Higher energy costs, he warned, would raise the cost of doing business, weaken export competitiveness and potentially fuel inflationary pressures that could trigger labour unrest across industrial sectors.

Centre for Policy Dialogue Executive Director Fahmida Khatun said supply disruptions would increase import costs and place additional strain on Bangladesh's foreign exchange reserves.

She stressed the urgency of identifying alternative fuel sources, noting that global commodity prices – including edible oil, sugar, wheat and fertiliser – could also rise as a result of the conflict.

Zahid Hussain, former lead economist at the World Bank's Dhaka Office, warned that continued conflict could destabilise global commodity markets, disrupt international shipping and logistics networks and heighten investment uncertainty.

He warned that Bangladesh could face three major risks – volatility in global commodity markets, disruptions to international trade and logistics, and heightened uncertainty discouraging investment decisions.

Energy expert Professor Shamsul Alam said higher global fuel prices would inevitably increase production costs across all sectors, pushing up commodity prices and placing additional pressure on consumers.

The Centre for Policy Dialogue (CPD) has urged the newly elected government to immediately scrap the reciprocal trade agreement signed with the United States by the previous interim administration, terming it grossly discriminatory and detrimental to Bangladesh's economic sovereignty.

The think tank also called for a complete departure from the traditional business as usual bureaucratic approach, unveiling a comprehensive 13-sector policy roadmap to guide the government's executive and legislative decisions over the first 180 days and the next five years.

The recommendations were presented today (28 February) at a media briefing titled "New government's economic and social sector policy and administrative decisions: 180 days and beyond," held at the CPD office in Dhaka.

CPD research director Khondaker Golam Moazzem presented the extensive analysis, emphasising that the new administration must adopt knowledge-based decision-making and deeply decentralise power to overcome systemic inefficiencies.

Taking a firm stance on recent international negotiations, the CPD warned that the US trade agreement severely jeopardises Bangladesh's smooth transition strategy (STS) for LDC graduation.

According to the think tank, the agreement's clauses completely restrict Bangladesh's independence in terms of trade and investment with third countries. It forces Bangladesh to comply with US border measures and restricts the imposition of digital service taxes.

The CPD strongly advised the government to withdraw from this agreement before notifications are exchanged and also urged a review of the Economic Partnership Agreement (EPA) with Japan, as it controversially allows duty-free imports of LNG, thereby delaying the country's renewable energy transition.

Beyond trade, the CPD's analysis spanned critical macroeconomic areas, including resource mobilisation, the business environment, and foreign direct investment (FDI). With the country's tax-to-GDP ratio plunging to a South Asian low of 6.8%, the think tank recommended forming a tax ombudsman, consolidating the current eight VAT slabs into a three-tier structure, and eliminating tax incentives for high-emission fossil fuel power producers.

To attract FDI and ease the cost of doing business, CPD proposed enacting a Single Digital Interface Act to legally bind ministries to integrate their databases. They also suggested translating the government's pledges of 48-hour company registration and 30-day profit repatriation into enforceable legal standards, alongside establishing specialised commercial courts for rapid dispute resolution.

Turning to the power and energy sector, the CPD heavily criticised the government's ambitious target to generate 35 GW of electricity by 2030.

"There is no need to fix the BNP's distant target of 35 gigawatts for 2030. Because within that target, we again see an indication of promoting fossil fuels. Therefore, we believe that instead of sticking to the 35-gigawatt target, it would be better to move towards a more realistic goal – as CPD had suggested – that reaching 30 gigawatts by 2040 would be sufficient. We think the new government should proceed with such a target in mind," said Dr Golam Moazzem.

Instead of expanding domestic coal extraction and building new inland LNG terminals, the government was advised to adopt a strict 'no new fossil fuel-based power generation' policy.

The think tank recommended shifting focus toward domestic gas exploration through Bapex, expanding the national rooftop solar programme, and inserting 'No Electricity, No Pay' clauses in all future power purchase agreements to eliminate the heavy burden of unconditional capacity charges.

On the social front, the CPD addressed pressing issues surrounding labor rights, child labour, and international migration.

CPD calls for tax justice, FDI reform

Addressing the alarming rise in child labour, which currently traps 3.5 million children, Golam Moazzem proposed utilising the newly planned Family Card scheme to provide conditional cash transfers to vulnerable households, strictly tied to withdrawing their children from hazardous work and sending them back to school.

To protect outbound migrant workers from rampant extortion, the government was urged to dismantle entrenched recruitment syndicates, mandate digital financial transactions for all recruitment fees, and transform Technical Training Centres (TTCs) into dedicated overseas placement hubs aligned with global market demands.

Golam Moazzem said true accountability cannot be achieved if the government operates solely on the "one leg" of the executive branch. He strongly advocated for parliamentary reforms.

CPD recommended ensuring that opposition MPs lead key parliamentary standing committees, such as the Public Accounts Committee, and reforming the Prime Minister's Question Time to be ballot-based rather than executive-controlled.

Centre for Policy Dialogue (CPD) today (28 February) urged major reforms in tax collection, business climate, trade deals and foreign investment management, warning that without evidence-based decisions and strong accountability, Bangladesh's post-election economic transition could be at risk.

CPD said Bangladesh must urgently overhaul its revenue system, ease the cost of doing business, review recently signed trade agreements and strengthen foreign direct investment (FDI) facilitation to ensure sustainable growth and smooth graduation from Least Developed Country (LDC) status.

Presenting the study titled 'New Government's Priorities in Addressing Socio-economic Challenges: Introducing Knowledge-based Decision Making in the Executive and Legislative Process' at its Dhanmondi office, CPD Research Director Dr Khondaker Golam Moazzem highlighted structural weaknesses in Sections 3, 4, 5 and 6 of the report covering revenue mobilisation, business environment, trade policy and FDI.

Tax-GDP Ratio

CPD said Bangladesh's tax-to-GDP ratio has fallen to approximately 6.8%, the lowest in South Asia, significantly weakening fiscal capacity at a time of rising development needs.

The newly elected government has pledged to raise the ratio to 10% in the medium term and 15% by 2035. But CPD cautioned that revenue sustainability would remain uncertain without prioritising tax justice and plugging systemic leakages.

The study identified 'leaking revenue' as the weakest area across all decision-making indicators.

To address regressivity and inefficiency, CPD recommended consolidating the current eight VAT slabs into a simplified three-tier structure: standard, reduced and zero rates, with a long-term transition toward a two-tier system.

It also proposed eliminating tax exemptions for non-essential services, including exclusive clubs and stock market-related entities, and phasing out tax cut incentives for fossil fuel-based power producers.

Mandatory digital tax return submission, establishment of a digital tax dispute resolution system within 30–45 days and performance-based corporate tax incentives were among the key recommendations.

CPD further suggested linking revenue gains from VAT rationalisation to direct transfers for low-income households instead of broad reduced-rate exemptions.

Business Environment

The report noted that Bangladesh's business environment continues to suffer from transport-logistics bottlenecks, unreliable utilities, regulatory complexity, corruption, weak human capital alignment and fragile banking systems.

It warned that corruption in administrative processes remains the most severe constraint to ensuring an enabling business environment.

Despite digital reforms such as the partial launch of "BanglaBiz" and activation of the Bangladesh Single Window system, CPD found that transparency and accountability remain weak.

The study recommended full backend digital integration across agencies under a unified document management framework to eliminate duplication of business licensing requirements.

It also called for establishing both a Tax Ombudsman and a Banking Ombudsman to address grievances and strengthen institutional accountability.

In the financial sector, CPD flagged high non-performing loans (NPLs) and limited SME access to financing as major barriers.

Although reforms such as the Bank Resolution Ordinance 2025 and Deposit Protection Ordinance 2025 were introduced, the think tank said credit allocation decisions lack transparency and efficient implementation.

It urged Bangladesh Bank to innovate credit assessment models, develop inclusive SME financing options with lower collateral requirements and exercise caution in interest rate reduction to avoid inflationary pressures.

US-Bangladesh Trade Agreement

CPD raised serious concerns over the recently signed "Agreement on Reciprocal Trade" between Bangladesh and the United States, saying several clauses may restrict Bangladesh's trade policy autonomy.

The study alleged that the agreement includes discriminatory provisions relating to import licensing, technical standards and digital trade.

According to CPD, Bangladesh would be required to gradually eliminate tariffs on US-origin goods while facing potential additional tariffs if deemed non-compliant.

The report also claimed that Bangladesh would not be allowed to impose digital service taxes on US companies or introduce customs duties on electronic transmissions.

Other provisions cited include restrictions on retaliatory VAT measures, limitations on agreements with third countries that conflict with US standards and preferential access for certain US goods.

CPD warned that such clauses could severely jeopardise Bangladesh's smooth transition strategy (STS) for LDC graduation, particularly in negotiating balanced free trade agreements (FTAs) and economic partnership agreements (EPAs).

It urged the government to withdraw from the agreement before formal notification exchange and revisit other deals, including the EPA with Japan, particularly provisions related to duty-free LNG imports that may delay energy transition.

FDI Reform

CPD identified six major structural challenges in attracting and retaining foreign investment, including fragmented approvals, policy unpredictability, institutional overlap, slow dispute resolution, land access bottlenecks and weak data systems.

The report said investment approvals remain sequential rather than parallel, even after the launch of BanglaBiz offering over 100 services and fast-track foreign loan approvals up to $10 million for export-oriented firms.

CPD recommended mandatory API-based integration among the Bangladesh Investment Development Authority (BIDA), National Board of Revenue, Registrar of Joint Stock Companies, Customs, BEZA and BEPZA to ensure simultaneous processing and real-time tracking.

The think tank called for converting profit repatriation commitments — including the 30-working-day resolution target — into binding legal standards through legislative amendments.

It also proposed designating specialised commercial benches within the High Court within 180 days and establishing a full-fledged International Commercial Court within 24 months.

To enhance transparency, CPD recommended creating a unified national FDI monitoring dashboard linked to the government's target of raising FDI to 2.5 % of GDP, with quarterly public reporting.

A national readiness audit of economic zones, including litigation-free land and confirmed utility capacity, should be completed within 180 days, the study added.

Dr Moazzem said that raising tax revenue, reducing business costs, negotiating trade agreements and attracting FDI must be guided by knowledge-based decision-making and parliamentary oversight.

He stressed that without structural reforms in fiscal governance, regulatory transparency and institutional accountability, policy initiatives may remain fragmented and ineffective.

"The new government has a strong electoral mandate. The challenge is to translate it into evidence-based, transparent and accountable decision-making," he said.

CPD's findings come as the government prepares to implement its first 180-day priority agenda following the 12 February national election.

Bangladesh’s economy grew 3.49 percent in the fiscal year 2024-25 (FY25), the slowest expansion in at least three years, owing to weaker performances in the agriculture and services sectors.

The growth is lower than the provisional estimate of 3.97 percent made previously by Bangladesh Bureau of Statistics (BBS), which released the finalised data on gross domestic product (GDP) yesterday.

In FY24, the economy grew 4.22 percent, said the national statistical office.

The data shows that only the industrial sector posted faster growth in FY25 than in the prior year.

Between July 2024 and June 2025, the country’s factory output rose 3.71 percent, up 0.20 percentage points from FY24.

Agriculture, the second-largest employing sector, grew just 2.42 percent, down from 3.30 percent a year earlier.

Services, the biggest contributor to GDP, expanded 4.35 percent, easing from 5.09 percent in FY24.

The size of the economy reached $456 billion, up from $450 billion a year earlier. Per capita income edged up to $2,769 from $2,738.

Sluggish growth is expected to continue into the current fiscal year. The International Monetary Fund projects 4.7 percent expansion in FY26, the World Bank 4.6 percent, and the Asian Development Bank (ADB) 4.7 percent -- all below Bangladesh’s pre-pandemic trend.

The ADB trimmed its projection from 5 percent in September, citing weak investment ahead of the general election and slower export growth.

Economists said the FY25 slowdown is owed to a combination of deep-rooted internal weaknesses and persistent external shocks.

“This is certainly due to both internal and external factors,” said Prof Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem). “One of the biggest reasons was the political transition. Because of that, and the related developments in the banking sector, business confidence dropped sharply.”

He noted that the erosion of confidence discouraged fresh investment while banks turned cautious on lending. “Credit growth declined considerably. Altogether, this reflects a downward shift in investment.”

Exports also underperformed, even weakened, he said. “Only remittances have performed somewhat consistently.”

Describing the macroeconomic picture as unusual, the Sanem executive director noted, “The economy is depressed, while inflation remains high.”

High inflation has eroded purchasing power, weakening consumer demand across all components of GDP – household consumption, public spending, investment and exports, he explained.

Although a new government has taken office, Raihan warned that FY26 may follow a similar pattern and that recent turbulence at the Bangladesh Bank could further dampen investor sentiment. “I do not expect a major surge in investment at this moment.”

The economist noted that public spending has remained subdued.

“February has already ended, and only about four months remain in the fiscal year. It is unlikely that public spending will pick up significantly within this period,” Raihan said.

“Even if investor confidence begins to return, it will take time for that to be reflected in actual economic indicators,” he added.

Md Deen Islam, a professor of economics at the University of Dhaka, said businesses and investors may delay commitments until they see how policy priorities evolve.

Such caution, he warned, could weigh on short-term activity. “That can slow economic activity in the short run, even if the government implements sound policies.”

He stressed that clarity and stability will be critical going forward.

“To support stronger growth, policy clarity, macroeconomic stability, and investor confidence will be essential. This means steady fiscal management, predictable regulatory frameworks, and efforts to improve credit flow and export performance,” he said.

“If these areas are strengthened, growth could accelerate in the medium term. Conversely, if uncertainty persists, growth may remain subdued despite changes in political leadership,” he added.

To revive growth, Islam stressed the need to restore macroeconomic stability and rebuild investor confidence.

There are tentative signs of a pickup. The economy expanded 4.5 percent in the first quarter of FY26, up sharply from 2.58 percent in the same period a year earlier, driven mainly by industrial and agricultural activity.

Within hours of ousting Ahsan H Mansur and appointing a new governor, the Bangladesh Bank (BB) transferred five officials and reinstated three previously transferred officials back to their posts.

The five transferred officials are Md Zabdul Islam, Md Shahid Reza, Md Bayazid Sarker, Gazi Md Mahfuzul Islam -- all holding director posts -- and Md Kamrul Islam, an additional director. Their transfers were ordered yesterday through a notice issued by the central bank’s human resources department.

On Tuesday, three central bank officials were transferred. They were Nawshad Mustafa, general secretary of the pro-Awami League ‘Nil Dal’ at BB and director of the SME Special Programmes Department; AKM Masum Billah, president of the Bangladesh Bank Officers’ Welfare Council elected from Nil Dal; and Golam Mostafa Shraban, general secretary of the council.

However, an amendment was issued by the same department yesterday, reinstating them to their previous posts.

Earlier on Monday, they were served show-cause notices for holding a press conference in violation of staff rules and commenting on policy decisions. The order for their transfer came a week after a section of BB officials, under the banner of the Bangladesh Bank Officers’ Welfare Council, held a press conference on the BB premises.

At the press briefing, called suddenly on February 16, officials described Ahsan H Mansur’s position as “autocratic” on several issues, including the merger of weaker banks with EXIM Bank and Social Islami Bank and the initiative to grant digital bank licences.

Bangladesh expanded its footprint in the United States apparel market to 10.53 percent in 2025, up from 9.26 percent a year earlier, as American buyers shifted orders away from China, according to official data.

US retailers and brands imported garments worth $77.88 billion from across the world last year, according to the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce.

Of that total, Bangladesh supplied $8.20 billion, strengthening its position as the third-largest apparel exporter to the US market.

In 2025, Vietnam emerged as the largest garment exporter to the American market, overtaking China. It shipped readymade garment items worth $16.74 billion, capturing a 21.50 percent market share.

China, which led the market in 2024 with a 20.83 percent share, saw its position weaken abruptly. Its share fell to 13.66 percent in 2025, with exports totalling $10.64 billion, according to OTEXA data.

China’s decline is largely linked to punishing tariffs imposed by US President Donald Trump last year.

The United States is the largest single-nation export market for Bangladeshi apparel items. Bangladesh’s performance in the American market marks a steady recovery and gradual expansion over the past few years.

Its market share stood at 9.37 percent in 2023 and 9.74 percent in 2022. The figure dropped to 8.76 percent in 2021 as exports were hit by the severe fallout from the Covid-19 pandemic.

The latest gain signals growing demand for Bangladeshi garments in the US market at a time of shifting sourcing strategies among global brands.

Industry leaders expect further growth if trade conditions remain favourable. The Trump administration has lowered the reciprocal tariff to 10 percent after a US court ruling, a move that could ease cost pressures in the US market.

“The lowering of the tariff will reduce the prices of commodities in the American markets, and the buyers will purchase more commodities such as garment items and ultimately the supply of locally made garments to the American market will grow in future,” said Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Oil prices were hovering near seven-month highs on Wednesday as the threat of military conflict between the US and Iran that could disrupt supply continued to worry investors as talks between the parties are set for Thursday.

Brent futures were up 43 cents, or 0.6 percent, at $71.20 per barrel at 0400 GMT. WTI futures rose 38 cents, or 0.6 percent, to $66.01.

Gold prices rose on Wednesday, lifted by a softer dollar and heightened safe-haven demand amid uncertainty over US tariffs and rising friction between Washington and Tehran.

Spot gold rose 0.8 percent to $5,190.99 per ounce, as of 0841 GMT. US gold futures for April delivery were up 0.7 percent at $5,210.40.

The US dollar index shed 0.1 percent, making greenback-priced bullion cheaper for other currency holders.

“Spot gold is being supported above the $5,000 level by the softer US dollar, a muddied outlook on US trade policy, and persistent geopolitical tensions,” said Han Tan, chief market analyst at Bybit.

“As long as these fundamental drivers remain intact, bullion bulls will be eager for a return towards record highs.”

Gold, a traditional safe-haven, does well during times of geopolitical and economic uncertainty.

US President Donald Trump said in his State of the Union speech that “almost all” countries and corporations want to stick to tariff and investment agreements previously made with Washington.

The country began collecting a temporary 10 percent global import tariff on Tuesday, but Washington was working to raise it to 15 percent, a White House official said.

Meanwhile, US envoys Steve Witkoff and Jared Kushner are slated to meet with an Iranian delegation for a third round of nuclear talks on Thursday in Geneva.

Iran is close to a deal with China to purchase anti-ship cruise missiles, according to Reuters sources, which could target the US naval forces that have assembled near the Iranian coast.

Elsewhere, spot silver climbed 4.2 percent to $90.96 per ounce, a three-week high.

“The path ahead (for silver) will be shaped by a more complex mix of monetary policy, inflation expectations, and US dollar dynamics,” said Rania Gule, Senior Market Analyst at XS.com.

JP Morgan on Wednesday said demand from central banks and investors this year could push gold prices to $6,300 an ounce by end-2026. It also raised its long-term price forecast for gold to $4,500 per ounce.

In an abrupt shakeup in the central bank's top echelon, the new government Wednesday appointed accountant-businessman Md. Mostaqur Rahman as new governor of the Bangladesh Bank (BB).

Dr Ahsan H. Mansur made an unceremonious exit as the government terminated his job contract as governor, amid protest by a section of central bank's officers outside.

A group of the demonstrating BB officials, meanwhile, forced Ahsan Ullah, adviser to Governor Mansur, out of the central bank's premises.

With the latest appointment given by the Ministry of Finance, the country gets a businessman as the central bank governor for the first time in its history.

Amid briefings by the protesting BB officers and the governor, the ministry issued two notifications. One notification says the remaining tenure of Dr. Ahsan H. Mansur as governor has been cancelled "in public interest", with the order taking immediate effect.

Another notification announced the appointment of Mostaqur Rahman as governor for a term of four years from the date of his joining.

The order requires him to relinquish all professional affiliations with other institutions and organisations before assuming office -- and it takes effect immediately.

Mostaqur Rahman is a cost and management accountant (FCMA) and a businessman by profession. He is the managing director of Hera Sweaters located in Narayanganj.

Born in Dhaka in 1966, Mr. Rahman completed his undergraduate and master's degrees in accounting from University of Dhaka. He later obtained the FCMA qualification from the Institute of Cost and Management Accountants of Bangladesh.

An entrepreneur with more than 30 years of experience, the newly appointed governor has been involved with corporate finance, exports, institutional governance, and financial management. In addition to the ready-made garment sector, he also has business interests in real estate.

Mr. Rahman is a member of several trade bodies, including Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Real Estate and Housing Association of Bangladesh (REHAB), Association of Travel Agents of Bangladesh (ATAB) and Dhaka Chamber of Commerce and Industry (DCCI).

He has served on various committees of these organisations and has prior experience working with Chittagong Stock Exchange Limited.

Following the July-August uprising in 2024 that toppled the Sheikh Hasina's governing regime, the interim government appointed Dr. Ahsan H. Mansur as the central bank governor to replace the then governor, Abdur Rouf Talukder, who did not attend office after the mass uprising, on 14 August 2024.

Nine days after the Bangladesh Nationalist Party (BNP)-led government came to power, Dr. Ahsan H. Mansur's appointment was cancelled, in the wake of large-scale administrative reshuffle.

Of the previous 13 governors, eight were bureaucrats, two economists, two commercial bankers and one academic.

Asked on what grounds the governor was changed, Finance and Planning Minister Amir Khasru Mahmud Chowdhury said there was nothing to be taken into consideration in this case.

"A new government has come. The new government has priorities. Naturally, the changes are taking place, not only in central bank, changes are also coming in many places and that will continue," he said.

Chowdhury makes it clear that changes will be made "wherever necessary to implement the new government's programmes, preferences, and ideas".

The outgoing governor of the central bank, Dr Ahsan H Mansur, said the government could have followed a different path to remove him from the post instead of creating the "mobocracy-like" situation.

"It could have been otherwise, but it's okay," he told the Financial Express on Wednesday night over the phone.

He said: "Whatever Allah does He does it for the welfare of the creatures. I wish both the government and the new governor success."

Contacted, Dr Zahid Hussain, a former lead economist at the World Bank's Dhaka office, said he didn't have any idea about the newly appointed governor and there is no public record about him to make a comment at this stage.

"The government should consider appointing right person in the right job," he said, so that no mismatch is created.

Dr. Hussain notes that competence of a person and conflicts of interest should be taken into consideration by the government before making new appointments in key positions.

"No compromise should be made in these two basic areas for appointment of a person who will lead an organisation."

On condition of not being quoted by name, a former managing director of a private commercial bank says Dr Mansur came into the central bank leadership when the economy was in a disastrous situation with fast-depleting forex reserves.

From such unpleasant scenario, he recounts, the policies taken by the Mr. Mansur helps reshape the economy increasing foreign-exchange reserves to $35 billion from less than $19 billion after clearing mounting accumulated unpaid bills.

"He not only stabilised the forex market but also made stable the local currency, which gives us some sort of comfort. His exit could have been done in a better way," he remarks.

About the newly appointed governor, the seasoned banker said he is a gentleman and lived close to his house. "But he lacks element of running central bank. But I wish him all the best."

Seeking anonymity, the managing director and chief executive officer of a private commercial bank said the way the outgoing governor left "is unfortunate and unexpected".

About the new governor, he said: "It's hard to believe that a businessman becomes a governor."

bdnews24.com adds: Newly appointed Bangladesh Bank Governor Md Mostaqur Rahman has signalled that "restoring trust" in the banking sector will be his top priority, alongside efforts to lower interest rates.

The garment industry entrepreneur assumed office on Wednesday, appointed by the BNP-led government, succeeding Ahsan H Mansur, who had served during the caretaker government.

Commenting on his vision for the central bank, Mostaqur said: "As you know, the economy and the banking sector face challenges. Taking on this responsibility at this time is a challenge.

"God willing, I will first sit in the bank, consult with everyone, and with cooperation, focus on the primary task-trust-building in banking, restoring discipline. Of course, the previous governor achieved a lot, and we aim to continue that work."

He added, "Another main focus will be driving growth. Credit growth is slowing, as you know, so we will work to lower interest rates and stimulate lending."

China and Germany want to deepen cooperation, German Chancellor Friedrich Merz and Chinese Premier Li Qiang said in Beijing on Wednesday, as Merz began a visit aimed at resetting ties against the backdrop of a widening trade imbalance.

Merz told Li that Germany attached great importance to maintaining and deepening its intensive economic exchanges with China, its largest trading partner last year, while emphasising the need to ensure fair cooperation and open communication.

"We have very specific concerns regarding our cooperation, which we want to improve and make fair," said Merz, who faces a tough balancing act of redefining an economic relationship that is increasingly unfavourable to German interests.

Li called on both sides to work together to safeguard multilateralism and free trade, in reference to US President Donald Trump's trade war, which has upended the global trading system.

"China and Germany, as two of the world's largest economies and major countries with important influence, should strengthen our confidence in cooperation, jointly safeguard multilateralism and free trade, and strive to build a more just and fair global governance system," Li said.

China is seeking to pitch itself as a reliable economic partner, in contrast to the United States, as Europe struggles to address vulnerabilities in its supply chains and worries about growing dependence on China.

Europe is witnessing an acceleration of concerning trends in China, Europe's Trade Commissioner Maroš Šefčovič told the European Parliament on Tuesday, citing China's growing dominance in key manufacturing sectors, a rising imbalance in bilateral trade, and falling market share of EU companies in China.

Merz, on his first visit to China, becomes the latest European leader seeking to reset ties with China after Britain's Starmer and Canada's Carney earlier this year, while Beijing touts the benefits of engaging with its massive consumer market and advanced manufacturing base.

Engagement between Europe's largest economy and China could set the stage for EU-China relations this year.

Merz, accompanied by a delegation of 30 firms including top carmakers such as Volkswagen and BMW (BMWG.DE), opens a new tab which are acutely feeling the strain of Chinese competition - contributing to a growing trade imbalance that has sparked concern in Berlin and led to calls for protectionist policies.

Germany's heavily manufacturing-based economy has been particularly hard hit by competition from China's manufacturers, Rhodium Group's China analyst Noah Barkin said in a recent research note.

The face of China's market, once coveted by foreign businesses for its wide consumer base and rising spending power, has changed in the last several years, with a slowing economy capping consumer demand and manufacturing overcapacity increasingly pushing domestic firms to look for opportunities abroad.

In editorials ahead of the visit, Chinese state media emphasised the potential for EU-China cooperation to become a stabilising force while US tariff policies upend global trade.

Xinhua, in an editorial published early on Wednesday, cited a German chamber of commerce survey finding that innovation gains in China are feeding back into German headquarters.

State-backed newspaper the Global Times said concerns about competition with China would be outweighed by the lure of China's massive market.

"Rhetoric such as 'systemic rival' and 'de-risking' has at times complicated Germany's China policy," it said in an early Wednesday editorial.

"Yet the enthusiasm and actions of the German business community speak louder than political slogans."

The World Trade Organization said Tuesday it would establish an expert panel to examine a Chinese complaint over Indian incentive schemes in the automotive and renewable energy sectors.

The WTO said in a statement that its Dispute Settlement Body (DSB) had agreed during a meeting to set up a panel to review China’s assertion that the Indian measures unfairly discriminate against foreign businesses and restrict trade, in violation of WTO rules.

The measures in question include incentives for the production of advanced chemistry cell batteries, automobile and auto components and electric vehicles.

China, which charged that the measures discriminated against the use of goods of Chinese origin, had back in October requested consultations with India to iron out the dispute. When that did not work, Beijing first asked the WTO last month to establish a panel of experts, but the request was blocked by India.

The DSB granted the second request on Tuesday.

Under WTO regulations, parties in a dispute can block a first request for an arbitration panel, but if the parties make a second request, it is all but guaranteed to go through.

India told Tuesday’s DSB meeting that it regretted that China had pushed forward with its panel request, insisting it had participated in the earlier consultations in good faith.

It said it remained confident its measures complied with WTO rules.

The United States, a third party in the case, also voiced disappointment that China had chosen to move forward with the panel request.

“China’s complaint is a regrettable attempt to distract from its own non-market policies and practices, to entrench reliance on China’s non-market excess capacity, and to undermine the broader interests of all WTO Members,” the US representative said.

The Bangladesh Securities and Exchange Commission (BSEC) reported a 14% decline in its overall earnings to Tk105 crore in the 2024–25 fiscal year, mainly due to a sharp fall in income from fines, fees and licensing, according to its annual report.

Earnings from fines, fees and licensing dropped 32% year-on-year to Tk39.72 crore, while other income slipped 2% to Tk65.32 crore.

Despite the fall in revenue, the regulator managed to reduce its total costs by 21% to Tk75.82 crore, largely driven by lower expenditure on salaries, allowances and other administrative expenses.

After deducting all costs, the commission's net surplus rose 12% to Tk29.23 crore in FY25, reflecting improved expenditure management. The regulator's total assets stood at Tk498.60 crore at the end of FY25, up from Tk469.89 crore a year earlier.

During the fiscal year, the commission approved Tk6,172.46 crore in capital increases through various instruments. This included Tk303 crore for one listed company via a rights issue, Tk4,671 crore for 11 companies through private debt placements, Tk5 crore for a qualified investor company, and Tk1,193 crore for 15 companies through the issuance of ordinary, bonus and preference shares.

Of the 226 complaints received from individuals and institutions, 222 were resolved while four are still under process. The regulator carried out 92 investigations and inquiries, along with 610 inspections, to detect irregularities and securities law violations. It took 987 enforcement actions — fining 229 individuals and institutions, issuing warnings to 684, and granting exemptions to 74. Between 19 August 2024 and 30 June 2025, fines totaling Tk1,073.21 crore were imposed.

The commission reported 527 cases pending in different courts, including those filed by and against it. During the year, it filed four cases, faced 76, and saw 76 cases disposed of. To strengthen market discipline and modernisation, the commission issued 11 orders, directives and notifications.

To boost international credibility and attract foreign investment, the commission scrapped discriminatory circuit breakers and lifted floor prices for most companies in August 2024. It said allowing market-driven price discovery based on supply and demand would ensure long-term stability and help restore investor confidence.

Bangladesh Services Limited (BSL), the owner of InterContinental Dhaka, has reported a 24% year-on-year reduction in losses in the first half of the current fiscal year, though the state-run hospitality firm continues to struggle with heavy debt and accumulated losses.

According to its disclosure, it incurred a loss of Tk38 crore with the loss per share of Tk3.95 in the July to December period of 2025-26. It had incurred Tk50.85 crore loss with per share loss of Tk5.20 in H1 of 2024-25.

In the second quarter during October–December, the company incurred a loss of Tk12.61 crore, with a loss per share of Tk1.29. In the corresponding quarter of the previous fiscal year (FY25), it had posted a higher loss of Tk18 crore, with a per share loss of Tk1.85.

Its net asset value per share at the end of December increased to Tk2.58, which was Tk1.97 for the July-December of 2024. While its net asset value per share stood at Tk215.79 as of December 2025, which is lower from Tk219.74 as of 30 June 2025, it data showed.

Despite the improvement in half-year performance, Bangladesh Services Limited remains under significant financial strain.

The travel and leisure sector-listed firm has been incurring losses for years amid a business slowdown and the burden of substantial loans taken for renovation. Its long-term loans and borrowings swelled to over Tk800 crore by June 2025, according to its latest annual report.

As of June 2025, accumulated losses stood at Tk706 crore, including an additional Tk87.38 crore loss in FY25. The company has failed to declare dividends for years due to continuous losses.

Its auditor said its accumulated losses for FY25 stood at Tk706 and a current assets deficit of Tk308 crore.

In addition, the company has loans of Tk908 crore and debt equity ratio of 0.42. These matters indicate the existence of a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern, the auditor said.

Trading at the Dhaka bourse ended on a mixed note as the benchmark index edged up slightly, while overall market turnover dropped sharply, reflecting cautious investor sentiment.

The DSEX, the broad index of the Dhaka Stock Exchange (DSE), rose 12 points to close at 5,554. The blue-chip DS30 index also advanced, gaining 8 points to settle at 2,151. Of the total issues traded during the session, 154 advanced, 167 declined and 72 remained unchanged, indicating a mixed market breadth.

However, turnover fell by 31% to Tk565 crore, highlighting subdued trading activity as investors remained watchful amid prevailing market uncertainty.

Market analysts said the sharp fall in turnover suggests investors are adopting a wait-and-see approach, even as selective buying in large-cap stocks continues to lend support to the index.

According to EBL Securities in its daily market review, the benchmark index managed to settle in positive territory following the previous session's modest pullback, as late-session buying support emerged across the trading board after extended intraday volatility.

Sellers maintained dominance for most of the session as cautious sentiment shaped the broader market pulse. Emerging buying activity in the final hour, particularly in selective large-cap stocks, helped the market close in the green, the EBL review added.

Major index pullers included Beximco Pharmaceuticals, City Bank, Bank Asia, BRAC Bank and Al-Arafah Islami Bank, whose gains supported the upward movement of the index.

On the sectoral front, banking stocks accounted for the highest turnover at 24.6%, followed by pharmaceuticals at 10.8% and textiles at 9.9%.

Sector performance was mixed, with jute rising 1.2%, textile gaining 0.6% and financial institutions adding 0.6%. In contrast, mutual funds fell 1.3%, general insurance declined 0.6% and life insurance slipped 0.4%.

Among individual stocks, Usmania Glass topped the gainers' chart with a 10% rise, followed by Northern Jute and Khulna Printing and Packaging, both up 9.93%. Meghna Condensed Milk and Meghna PET also posted strong gains.

On the losing side, MBL First Mutual Fund dropped 4.76%, while First Finance and Tung Hai Knitting each declined 3.84%.

The Hongkong and Shanghai Banking Corporation (HSBC) Limited on Wednesday said that net income fell $1.8 billion to $21.1 billion in 2025 as the bank ploughed ahead with sweeping overhauls to streamline its structure and cut costs.

Profit attributable to shareholders last year stood at $21.1 billion, from $22.9 billion the year before, the lender said in a filing to the Hong Kong stock exchange.

Pre-tax profit fell $2.4 billion to $29.9 billion.