Bangladesh’s private investment fell for the third consecutive year, reaching 22.03 percent of Gross Domestic Product (GDP) in the fiscal year 2024-25, the lowest level in 11 years, amid a weak investment climate and macroeconomic stress.

Public investment as a share of GDP, a measure of the final value of goods and services produced in the economy over a period, also declined for the third year due to slow implementation of the Annual Development Programme (ADP).

It stood at 6.51 percent of GDP in FY25, the lowest since at least FY13, down from 6.74 percent a year earlier, according to the Bangladesh Bureau of Statistics (BBS).

Economists say that the falling investment trend indicates the creation of fewer jobs than required, especially for the growing number of young workers entering the labour market each year.

According to them, the investment decline also threatens future growth.

“It is very concerning, especially at a time when we need to accelerate investment to create employment and boost exports,” said M Masur Reaz, chairman and founder of Policy Exchange Bangladesh.

The investment-to-GDP ratio comes alongside an estimated economic growth of 3.49 percent, the lowest since the Covid year 2020, driven mainly by private consumption. The decline suggests overall investment has not kept pace with the growth of the economy.

Reaz attributed the fall in private investment to three main factors.

“Our investment environment is weak, and it was identified nearly a decade ago,” he said, citing Bangladesh’s ranking in the World Bank’s ease of doing business at 176 out of 190 economies.

“From that day, comprehensive and targeted reforms were necessary. But they were implemented in an isolated and fragmented manner.”

The economist added that investment depends on multiple factors, including licensing, policy predictability, land, energy, and trade facilitation.

The macroeconomic crisis that began to unfold from 2023 further dampened investment sentiment, he said. Weak domestic demand, import contraction caused by the dollar shortage, and political instability ahead of the election all played a role.

“Foreign investors perceive a country as high risk when a country suffers from a macroeconomic crisis,” he said, noting that uncertainty increased after the mass uprising in July 2024 that led to the ousting of the Sheikh Hasina government.

“We have seen demonstrations and unrest, and they have affected the policy environment too. The whole fiscal year 2024-25 was full of uncertainty. The declaration of the general election date came in August of this fiscal year.”

Reaz added that the recent demonstration at the Bangladesh Bank over the removal of the central bank governor could create a negative international perception, signalling fragility in decision-making and discipline.

Ashikur Rahman, principal economist at the Policy Research Institute (PRI) of Bangladesh, identified a weak business climate, infrastructure bottlenecks, and waning competitiveness in international markets as production costs rose amid supply-side constraints.

He said governance breakdown in the banking sector since around 2020 has severely distorted credit allocation.

“Instead of channelling funds toward productive small and medium-sized enterprises, the financial system became increasingly captured by entrenched economic oligarchs. Large-scale loan irregularities and weak oversight eroded confidence and crowded out genuine entrepreneurs.”

Rahman added that small and mid-sized firms, traditionally the backbone of the employment generation, found themselves sidelined from access to affordable finance.

“This created a perverse incentive structure in which politically connected borrowers benefited, while real sector innovators were marginalised.”

He added that the decline in private investment as a percentage of GDP has profound implications for the country’s economic development.

“Investment is the engine of productivity growth, job creation, and structural transformation. A sustained decline weakens the economy’s capacity to generate employment, particularly for a young and expanding labour force.”

Rahman said it also limits technological upgrading and diversification beyond traditional sectors.

“Moreover, without robust private investment, growth becomes increasingly consumption-driven and fiscally strained. This is not sustainable, especially as Bangladesh approaches LDC graduation and faces tighter external financing conditions. Weak investment today translates into slower growth tomorrow, and slower growth amplifies challenges such as unemployment, underemployment, and poverty,” he added.

Syed Akhtar Mahmood, former global lead for regulatory reforms at the World Bank Group, said the low investment rate is caused by a mix of short and long-term issues. While governments have tried to improve the investment climate, many fundamental problems remain, including regulatory hurdles and limited access to credit.

High interest rates, bank liquidity issues, and greater risk aversion have reduced the supply of credit.

“Even if investors were willing to borrow at the higher interest rates, they are not getting financing. Many investors, especially some large ones, have over-leveraged themselves by borrowing heavily when interest rates were low. These companies may not be in a position to take on large loans even if they see good investment potential,” he said.

Mahmood added that energy shortages and political uncertainty have further dampened investor confidence.

“Low investment means our production capacity is not augmented while our existing capacity is under-utilised,” he commented.

According to Mahmood, this affects both current growth and future growth prospects. It also limits technological upgrading, research and development, skills development, and new product creation, all of which are necessary to enhance productivity and diversify the economy, including exports.

“When investors are struggling to carry out even basic investments, they are unlikely to invest in things that make our economy more competitive,” he said.

The Dhaka Stock Exchange has experienced a volatile yet gradually stabilising trend during the first eight trading sessions after the BNP assumed office, reflecting investor optimism alongside uncertainty over regulatory reforms and policy direction.

On the day the BNP officially formed the government on 17 February, the benchmark DSEX index of the Dhaka Stock Exchange closed at 5,570 points with turnover at Tk1,222 crore, indicating strong investor participation. However, the rally quickly lost steam.

The following session on 18 February saw the index fall to 5,519, with turnover dropping to Tk936 crore. The downward trend continued on 19 February, the day Ramadan began, when the DSEX declined further to 5,465 and turnover fell sharply to Tk560 crore.
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Trading hours were shortened by 40 minutes for Ramadan, contributing to lower turnover in subsequent sessions. On 22 February, the index marginally recovered to 5,467 with turnover of Tk568 crore.

Momentum improved on 23 February as the DSEX climbed to 5,553 and turnover rose to Tk718 crore. The market slipped slightly again on 24 February, closing at 5,542 with turnover increasing to Tk825 crore.

On 25 February, the index edged up to 5,554 while turnover declined to Tk565 crore. By 26 February, the DSEX regained strength to close at 5,600, accompanied by a strong rebound in turnover to Tk947 crore.

The overall performance suggests that while initial euphoria faded quickly, the market has shown resilience amid ongoing discussions about regulatory restructuring and reform.

Finance Minister Amir Khosru Mahmud Chowdhury recently hinted at restructuring the securities regulator, stating that although the current upward trend may reflect optimism surrounding the democratic transition, only sustainable and structural reforms can ensure long-term stability.

Speaking to journalists during a visit to Chattogram, he emphasised that sentiment-driven gains would not bring fundamental change and that comprehensive reforms, including amendments to laws and regulatory frameworks, are under consideration.

He also stressed the importance of strengthening the Bangladesh Securities and Exchange Commission, enhancing transparency and adopting a zero-tolerance stance against irregularities.

The government has already begun searching for a new BSEC chairman, as the current commission, formed during the interim administration and led by Khondoker Rashed Maqsood, has struggled to restore investor confidence.

Finance ministry officials indicated that the regulator may undergo broader restructuring as part of efforts to address long-standing weaknesses in a market that has lagged behind the country's overall economic growth.

Stakeholders say that several private-sector professionals and at least one academic from the University of Dhaka have shown interest in leading the commission. However, many market participants favour leadership from the private sector, citing experience and the need for market-oriented reforms.

The DSEX had initially surged nearly 200 points to a five-month high on 15 February, the first trading session after the BNP's landslide victory in the 13th national election, reflecting investor optimism. That enthusiasm, however, was tempered by uncertainty over the regulatory leadership and broader policy direction.

Minhaz Mannan Emon, director of the DSE, said the BNP's election manifesto included a specific roadmap for capital market development, raising expectations among investors. According to him, thousands of investors who suffered heavy losses in the past decade are now looking to the new government for meaningful reform and accountability.

Notable gainers over the eight-session period included National Bank, S Alam Cold Rolled Steels, Shinepukur Ceramics Limited, Beximco Pharmaceuticals, BIFC, Prime Finance, GSP Finance and Fareast Finance.

Market insiders noted that several stocks that had remained under pressure during the interim government due to production closures and liquidation risks rebounded sharply following the political transition.

As the market moves forward, analysts say sustained improvement will depend less on short-term sentiment and more on the implementation of credible reforms aimed at strengthening governance, boosting liquidity and rebuilding trust among domestic and foreign investors.

Japan aims to help transform India's Northeast into a geopolitical gateway to Southeast Asia by strengthening connectivity to the Bay of Bengal and the Indian Ocean, Deputy Foreign Minister Horii Iwao said on Thursday.

Speaking in Shillong, Horii said Japan remains "firmly committed" to the region's development and views it as a "powerful engine of growth" when integrated into a broader economic grid spanning Nepal, Bhutan, Bangladesh and Southeast Asia, says the Hindu.

The initiative forms part of Japan's Free and Open Indo-Pacific (FOIP) policy, under which Tokyo is working to establish an "Industrial Value Chain" linking India's Northeast to maritime routes. Officials say the objective is to promote holistic regional development by improving connectivity and supply chains.

Under the administration of Prime Minister Sanae Takaichi, Japan is expanding cooperation with India beyond infrastructure projects to include private-sector collaboration in strategic sectors such as semiconductors, economic security and clean energy.

Horii also highlighted renewed efforts to strengthen people-to-people ties between Japan and the Northeast, including social and cultural exchanges.

The push follows recent high-level diplomatic engagements. Indian Prime Minister Narendra Modi met Takaichi, Japan's first female prime minister, at the Group of 20 summit in South Africa in November 2025.

In January 2026, India's External Affairs Minister Subrahmanyam Jaishankar hosted Japanese Foreign Minister Toshimitsu Motegi for talks aimed at deepening the bilateral partnership.

ChatGPT developer OpenAI has secured $110 billion in fresh funding from a group of major technology firms led by Amazon, pushing the company's pre-money valuation to $730 billion.

OpenAI co-founder and CEO Sam Altman said yesterday (27 February) that Amazon has committed $50 billion to the round, while Nvidia and SoftBank will each invest $30 billion.

He added that more investors may join as the funding process continues.

'Unbelievably dangerous': ChatGPT Health may miss life-threatening emergencies, finds study

Amazon will initially invest $15 billion, with the remaining $35 billion to be released over the coming months under certain conditions.

Altman said the partnerships will help expand OpenAI's global reach, strengthen infrastructure and improve financial stability, enabling the company to bring advanced AI tools to more users and businesses worldwide.

He noted that ChatGPT now has over 900 million weekly active users and more than 50 million paying subscribers. According to Altman, AI is entering a new stage where cutting-edge research is rapidly turning into everyday tools used at a global scale.

As part of a multiyear deal, OpenAI and Amazon will introduce new AI capabilities for enterprises, with Amazon Web Services becoming the exclusive third-party cloud provider for OpenAI Frontier.

The two firms will also expand their existing agreement by $100 billion over eight years.

OpenAI said it is also deepening ties with Nvidia, while stressing that its long-standing partnership with Microsoft remains unchanged and central to its strategy.

Stocks maintained strong upward momentum today (26 February) as trading activity surged at the Dhaka bourse following the appointment of a new governor at Bangladesh Bank, with turnover soaring 68%.

The benchmark DSEX of the Dhaka Stock Exchange advanced 45 points, or 0.81%, to close at 5,600, regaining the key psychological level after recent volatility. The blue-chip DS30 index rose 17 points, also 0.81%, to finish at 2,169.

Market breadth remained firmly positive, as 239 issues advanced, 93 declined and 59 remained unchanged, reflecting broad-based buying.

Turnover climbed sharply to Tk947 crore, signalling renewed investor participation and improved liquidity. Market capitalisation also increased, supported by gains in large-cap stocks.

Major contributors to the ryesally included Islami Bank Bangladesh, Beximco Pharmaceuticals, City Bank, Eastern Bank and Robi Axiata, whose price appreciation lifted the indices.

Mostaqur Rahman FCMA was appointed governor of Bangladesh Bank for a four-year term on Wednesday, replacing Ahsan H Mansur.

Market observers noted that Mostaqur's prior experience as a board member of the Chittagong Stock Exchange between 1998 and 2000 underscores his familiarity with the capital market.

Minhaz Mannan Emon, director of the DSE and managing director of BLI Securities Limited, told The Business Standard that the day's rally and transaction growth had no direct correlation with the governor's appointment.

However, he voiced optimism about the new governor's integrity and longstanding engagement with national economic affairs, suggesting such factors could bolster investor confidence.

He also said the formation of a new government by the Bangladesh Nationalist Party has generated expectations of administrative changes across key institutions.

Speculation regarding potential leadership changes at the Bangladesh Securities and Exchange Commission may also be shaping investor sentiment, he added.

According to EBL Securities' daily market review, the capital market extended its recovery from a brief correction phase, driven by broad-based buying.

While mid-session profit-taking briefly slowed the rally, renewed buying interest in the latter half pushed the indices higher by the close.

Sector-wise, banking stocks dominated turnover with a 22% share, followed by pharmaceuticals (18.7%) and telecom (9.1%). All sectors ended in positive territory, led by ceramic (up 3.1%), IT (2.3%) and travel (2.3%).

City Bank, Robi, Orion Infusion, Khan Brothers PP Woven Bag and BRAC Bank topped the turnover chart.

Several loss-making firms featured among the gainers, including Familytex, BIFC, Union Capital and ICB Islamic Bank, each posting the maximum 10% rise.

Meanwhile, the Chittagong Stock Exchange PLC also closed higher. The CSCX index gained 69 points to 9,587, while the CASPI advanced 128 points to 15,597.

Turnover at the port city bourse stood at Tk19.54 crore, reflecting positive sentiment across both trading floors.

Gold prices edged up on Thursday as uncertainty over US tariff policy boosted the metal’s safe-haven appeal, while investors awaited further details on US-Iran talks later in the day.

Spot gold was up 0.4 percent at $5,190.01 per ounce, as of 0816 GMT. Bullion had hit a more-than-three-week high on Tuesday.

US gold futures for April delivery were down 0.4 percent at $5,206.80.

The US dollar eased, making dollar-denominated commodities more affordable for holders of other currencies.

“Iran-US persisting tensions and the uncertainty surrounding the global economy with (President Donald) Trump’s tariffs are a bullish catalyst,” said Carlo Alberto De Casa, external analyst at banking group Swissquote.

US envoy Steve Witkoff and Trump’s son-in-law Jared Kushner are due to meet an Iranian delegation for a third round of nuclear talks later in the day in Geneva.

Trump briefly laid out his case for a possible attack on Iran in his State of the Union speech on Tuesday, saying he would not allow a country he described as the world’s biggest sponsor of terrorism to have a nuclear weapon.

Non-yielding gold is seen as a safe store of value during times of geopolitical and economic uncertainty.

The US tariff rate for some countries will rise to 15 percent or higher from the newly imposed 10 percent, US Trade Representative Jamieson Greer said on Wednesday, without naming any specific trading partners or giving further details.

Gold prices scaled a record high of $5,594.82 on January 29 and were up 20 percent so far this year.

“The global gold rush does not seem to be over... Overall the sentiment remains positive with strong buys coming from Asia and from Central Banks,” De Casa said.

On the data front, investors await the weekly US jobless claims data, due later in the day.

Stocks featured in EBL Securities Ltd's 2026 watch list have posted robust gains in the first two months of the year, slightly outperforming the broader market amid rising optimism over political clarity and improving macroeconomic conditions at the Dhaka Stock Exchange.

According to the brokerage, its recommended stocks generated an average return of 15.8% between 30 December 2025 and 26 February 2026. Over the same period, the benchmark DSEX index climbed 15.1%, rising from 4,865 points at the end of December to 5,600 points on 26 February.

Leading the watch list was Confidence Cement, which surged 42% from Tk49.2 to Tk69.8. City Bank advanced 35.2% to Tk33, while Beximco Pharma gained 29% to Tk131.6. Bank Asia rose 20.3% to Tk21.9, and Prime Bank increased 18.8% to Tk34.1. IDLC Finance returned 18.8%, followed by Eastern Bank with 18.1% and BSRM Steels with 17.3%.

Large-cap stocks also supported overall performance. Walton and BAT Bangladesh each added 10.4%. Olympic Industries rose 14.8%, while Reliance Insurance gained 13.3%. Sena Insurance advanced 15.9%, and Bangladesh Submarine Cable climbed 15.3%. Robi increased 16.7%, while Berger Paints Bangladesh, Eastern Housing, and Envoy Textile recorded moderate gains. Even relatively conservative stocks such as MJL Bangladesh, ITC, and Matin Spinning delivered positive returns.

Rayhan Ahmed, senior research associate at EBL Securities, told The Business Standard that the market is witnessing a broad-based resurgence after four subdued years. He attributed the recovery to political clarity and supportive macroeconomic tailwinds, noting that the firm's "Yearly Market Update 2025 and Outlook 2026" watch list has returned around 16% so far this year.

He added that disciplined, fundamentals-driven stock selection combined with timely assessment of market sentiment can generate superior returns, and expressed optimism that a growth-oriented fiscal stance and greater regulatory certainty under the newly elected government will help sustain the market's momentum.

Reliance Insurance PLC reported an 8% year-on-year decline in net profit to Tk88 crore in 2025, reflecting higher claims and depreciation expenses despite growth in premium income.

The general insurer disclosed its annual financial results after the board approved the accounts at a meeting held on 26 February, according to company sources.

Earnings per share fell to Tk8.42 in 2025, down from Tk9.12 in the previous year. The company said in a price sensitive statement that the decline in profit was mainly due to an increase in claims settlement and higher depreciation costs during the year.

However, the insurer's balance sheet indicators showed improvement. Net asset value per share stood at Tk78.95 with revaluation and Tk75.43 without revaluation, compared to Tk69.59 under both measures a year earlier. The rise in net asset value was attributed to higher retained earnings.

Net operating cash flow per share rose sharply to Tk6.84 in 2025 from Tk1.66 in 2024. The company said stronger cash flow was driven by increased premium income during the year, which helped offset pressure from higher claims expenses.

The board of directors has recommended a 30% cash dividend for shareholders for the year 2025, maintaining the same payout ratio as the previous year.

To secure shareholder approval, the company has scheduled its annual general meeting for 30 April, with 31 March set as the record date.

Listed on the Dhaka Stock Exchange PLC in 1995, Reliance Insurance closed at Tk73.90 on Thursday, with a market capitalisation of Tk770.83 crore.

According to its January shareholding report, sponsors and directors hold 67.95% of the company's shares, while institutional investors own 4.48%. The remaining 27.57% is held by general shareholders.

The per capita income in Bangladesh rose by 1 percent year-on-year to $2,769 in the 2024-25 fiscal year, according to final data from the Bangladesh Bureau of Statistics.

The per capita income was $2,738 in 2023–24.

In local currency, the figure stood at Tk 334,511 in 2024-25, up from Tk 304,102 in the previous year.

In FY25, the size of the Bangladesh economy increased to $456 billion from $450 billion a year earlier, although it was lower than the earlier estimate of $462 billion.

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).