The government is preparing a revised priority list for foreign-funded projects currently under review in the pipeline to align them with the new administration's election manifesto, according to officials at the Economic Relations Division (ERD).

Since the BNP government assumed office on 17 February, it has placed the highest priority on fulfilling its electoral pledges, already introducing Family Cards and waiving farm loans up to Tk10,000. Its development priorities will be reflected in the annual development programme of the next fiscal year's budget, the first for the new government.

ERD officials say the government will ensure foreign financing alongside allocations from public funds to support the priority projects. As part of this process, foreign-funded projects currently in the pipeline are being reviewed and various ministries have already started their groundwork under guidance from the finance ministry.

ERD figures updated till January show that $2.27 billion in project loan agreements were signed during the first seven months of the current fiscal year.

Over the last few years, Bangladesh has typically signed $9 billion to $10 billion in annual loan agreements to fund its priority development agenda.

But fewer loan projects were signed during the interim government's 18-month term before the February elections, as the administration then preferred mitigating foreign debt risks to signing new projects.

After the new government took office in February, the ERD has begun drafting a revised priority list for the final quarter of this year and the upcoming fiscal year starting in July, aligning to the ruling party's election manifesto.

As of January, loan proposals for projects in the pipeline stood over $46.6 billion, including $18.7 billion from the Asian Development Bank (ADB), $1.8 billion from the World Bank, $15.2 billion from South Korea, $3.8 billion from China, and $911 million from Japan.

Also, there are proposals from Asian Infrastructure Investment Bank (AIIB), New Development Bank (NDB) and European countries.

Shifting priorities

"The projects currently in the pipeline are undergoing a fresh re-evaluation," said an ERD senior official, speaking on condition of anonymity.

Projects are routinely listed in the borrowing programme pipeline after extensive discussions with development partners. From this list, the government signs loan agreements for priority projects each year, the official explained.

ERD officials suggest the new government may drop some projects from the previous era's pipeline, though widespread cancellations are not expected. Since many projects form part of essential sectoral plans – such as the ADB-backed SASEC Dhirasram Inland Container Depot (ICD) – they are likely to be retained.

Major projects in focus

The World Bank's pipeline under the ERD includes six projects, with the Health, Nutrition and Population Sector Development Programme listed among "highly probable" projects.

ERD data shows that the borrowing programme for the current financial year features 43 South Korean-funded projects, including high-impact infrastructure projects such as the Meghna Bridge on the Shariatpur-Chandpur Road, a railway link to the Bay Terminal of Chattogram Port at Patenga, MRT Line-4 and the MRT Line-5 Southern Route in partnership with the ADB.

According to ERD data, there are nine Chinese projects currently in the pipeline, including conversion of Akhaura-Sylhet railway to dual gauge, expansion of the Joydebpur-Mymensingh-Jamalpur rail corridor, modernisation of Mongla Port and the development of the Chinese Economic and Industrial Zone in Chattogram.

Beyond the major lenders, the AIIB maintains a significant presence with $3.543 billion in proposals across 15 projects, while the NDB accounts for $1.06 billion through six initiatives.

For the current financial year, five projects were also slated for loan agreements with Japanese financing, involving a total proposed credit of $911 million.

Zahid Hussain, former lead economist at World Bank's Dhaka office, told TBS that the government must evaluate which sectors should be prioritised and which specific projects within those sectors are the most urgent.

He said in the context of the current global crisis – marked by war, fuel shortages, and supply chain uncertainties – the primary objective must be to maintain economic stability. "Consequently, projects related to food security and energy security should receive the highest priority."

"Furthermore, improving the efficiency of port systems is of critical importance. For sustainable growth, developments in education, healthcare, and technical skills remain indispensable," he stressed.

M Masrur Reaz, chairman of the private research organisation Policy Exchange Bangladesh (PEB), said it is natural for the current government to have its own development and project financing strategies.

While reprioritisation is expected, previous projects, which are vital for economic growth, human resource development, should not be outright dropped from the priority list, he cautioned.

Establishing priorities is not enough, the PEB chairman said. "Financing must be sound, and negotiations with development partners must put the country's interests first. Moreover, we must urgently improve our capacity to actually implement these projects."

Bangladesh is facing intensifying energy-related risks with limited policy flexibility, as global supply disruptions and geopolitical tensions constrain its ability to manage shocks, according to a recent report by S&P Global Ratings.

The report by the American credit rating agency highlights that countries such as Bangladesh, Pakistan, and Sri Lanka -- despite showing some signs of macroeconomic recovery -- remain at “greater risk” due to their heavy reliance on imported fuel and weaker external positions.

“These countries are particularly vulnerable to rising oil prices and potential supply disruptions,” states the report published last week.

Bangladesh faces mounting growth, inflation, and external risks if the spike in energy prices endures longer than currently anticipated, it adds.

The duration of the US-Israel war on Iran and the associated price shock, as well as the physical availability of fuel supplies, will be key determinants of the impact on the sovereign’s creditworthiness, the report notes.

Higher fuel prices are likely to stall the gradual decline in inflation over the next three to six months and could weigh on recovery momentum.

Nearly 50 percent of Bangladesh’s electricity generation is gas-fired, and almost a quarter of its gas needs are met through imports.

Meanwhile, the economy is almost entirely reliant on imports for crude and refined oil products.

Oil supply reserves are likely to last less than one month, after which measures to curb consumption may become more pronounced if imports remain constrained.

While the government and national energy companies have recently secured additional supplies of gas, diesel, and petrol, availability could become scarcer if the conflict continues.

Officials have moved quickly to implement measures aimed at offsetting the impact of higher fuel prices.

These include a cap on retail fuel prices, a temporary rationing mechanism, cuts to operations at fertiliser plants to prioritise gas supply to power plants, and early school closures to manage energy consumption.

The country is already grappling with stubbornly high inflation, which rose to 9.2 percent in February from 8.6 percent in January, and an extended moderation in growth following the collapse of the Awami League-led government in mid-2024.

The war will also be an unwelcome headwind against Bangladesh’s improving external position, notes S&P Global.

It explains that the accumulation of a more meaningful foreign exchange buffer and the current account’s modest surplus so far this fiscal year will help alleviate immediate stresses that could arise from a period of acutely high energy prices.

In addition, lower remittances would have the dual effect of tilting external flows unfavourably and reducing domestic private consumption momentum.

In that event, further delays to Bangladesh’s economic recovery could lead to a significant erosion of the country’s long-term growth rate or a deterioration in its external position, such that net external debt surpasses 100 percent of current account receipts on a sustained basis, the agency warns.

S&P Global notes that Pakistan, Sri Lanka, and Bangladesh are showing signs of economic recovery. The three countries have made progress, but sustained high energy prices and potential disruptions to trade and remittances could derail their fragile economies.

However, it states that Bangladesh—with government revenues at only around 9 percent of GDP—has fewer options to cap electricity and fuel prices through fiscal means.

Laos is comparatively less exposed due to its hydropower-based electricity generation and balanced fiscal position.

All four governments are likely to see significant deterioration in credit metrics—through inflation and currency channels—if the Middle East conflict is prolonged, according to the report.

However, the impact on ratings may be limited, as the generally low rating levels have already captured a significant share of the risks.

Bangladesh’s long-term rating stands at B+, with a stable short-term outlook. The B+ rating reflects the economy’s modest per capita income and limited fiscal flexibility, owing to a combination of low revenue-generation capacity and the government’s high interest burden.

S&P Global concludes, “Our ratings on Bangladesh can likely withstand the shorter-term economic disruptions associated with our base case scenario.”

Nearly a decade after the Bangladesh Bank (BB) reserve heist stunned the world, investigators say they have identified 65 to 70 suspects across seven countries and are now preparing to submit the charge sheet soon.

Among those implicated are about 10 officials of the central bank, according to the Criminal Investigation Department (CID) under Bangladesh Police.

“The long-running probe is now in its final stage,” Al Mamun, the investigation officer and an additional superintendent of police, told The Daily Star.

“We are now preparing the draft charge sheet and hope to submit it soon,” he said.

The development comes after years of delays. Over the past 10 years, the investigation officer has been changed four times, and the submission of the probe report has been deferred more than 86 times.

On February 4, 2016, hackers broke into the BB’s systems and issued 70 fake payment instructions to the Federal Reserve Bank of New York, seeking to withdraw nearly $1.94 billion.

Most of the transactions were blocked by the Fed’s security system. But five slipped through, resulting in the release of $101 million.

Of that amount, $81 million was transferred to accounts at Rizal Commercial Banking Corporation in the Philippines. Another $20 million was sent to Sri Lanka, but was recovered after a spelling error in the transfer request raised red flags.

On March 15, 2016, a case was filed by then BB Deputy Director Zobayer Bin Huda with Motijheel Police Station. The investigation was later handed over to the CID.

So far, Bangladesh has recovered $14.66 million from the Philippines.

On condition of anonymity, a senior CID official said the recovery process has proved complex because the funds were not returned through the same banking channels used for the transfers, complicating legal proceedings.

INTERNATIONAL TRAIL, NEW LEADS

Investigators say the probe gained pace last year after authorities received a report from a US intelligence agency through the Mutual Legal Assistance Request (MLAR) process.

The information helped identify several foreign suspects.

“Without getting information from those countries, it was not possible to complete the investigation properly. Due to delays in receiving responses to the MLAR requests, the investigation took longer,” said Additional SP Mamun.

CID officials say they have gathered information from authorities in China and the Philippines as well.

On September 18 last year, a Dhaka court ordered the seizure of funds from Rizal Commercial Banking Corporation as part of the ongoing investigation.

Investigators said they have traced the laundering of the stolen funds across the Philippines, Japan, North Korea, Sri Lanka, India and China.

They say around 30 individuals and seven companies in the Philippines were linked to the laundering process.

According to investigators, Philippine businessman Kam Sin Wong has been identified as a central figure in the network. Wong allegedly hired North Korean hacker Park Jin Hyok, believed to be associated with the state-backed Lazarus Group, also known as APT38.

The hackers allegedly sent malware-infected links to BB officials by email, gaining access to internal systems and initiating fraudulent SWIFT transactions.

Funds were routed through several intermediaries before being channelled into casinos, including Solaire Resort and Casino and Midas Hotel and Casino. Other entities identified in the laundering chain include Philrem Service Corporation, Centurytex Trading, ABBA Currency Exchange Inc and Beacon Currency Exchange Inc.

In Sri Lanka, investigators traced the attempted $20 million transfer to an account at Pan Asia Bank in Colombo belonging to the Shalika Foundation, led by Hegoda Gamage Shalika Perera.

The transaction failed after the word “foundation” was misspelt, alerting authorities and preventing the funds from being withdrawn.

CID officials say eight individuals and institutions in Sri Lanka have been linked to that attempted transfer.

SCRUTINY OF CENTRAL BANK LAPSES

Investigators are also examining possible lapses within the central bank.

They are reviewing why the Real Time Gross Settlement (RTGS) system was connected directly to the SWIFT network without adequate risk assessment.

They are also looking into the approval process that allowed the SWIFT server used to manage foreign reserves to be linked with the RTGS system under the then-governor Atiur Rahman.

Some BB officials allegedly downloaded malware-infected files without verifying their source, while others are suspected of removing technical evidence after the breach came to light.

CID officials say these issues will be detailed in the charge sheet.

Struggling Z-category companies, especially leasing firms and a few manufacturing entities, led the top gainers' chart on the Dhaka Stock Exchange (DSE) during the first trading week after Eid, which saw only two sessions.

Market insiders said the sharp rises were largely driven by short-term investor interest and speculative trading. Despite ongoing economic uncertainty stemming from the Middle East conflict, some investors showed renewed appetite for weak, closed, and Z-category stocks.

A weekly market review showed that International Leasing & Financial Services, Peoples Leasing & Financial Services, FAS Finance & Investment, and Fareast Finance & Investment each posted a 50% gain. However, their share prices remained low, between Tk3.30 and Tk3.60.

Analysts noted that these financial institutions have long faced losses, high non-performing loans, and capital shortages. "The price spikes do not reflect any improvement in fundamentals but rather a tendency among investors to chase quick gains in low-priced stocks," one observer said.

Premier Leasing & Finance also rose sharply, climbing 42.31% to close at Tk3.70. Analysts believe the simultaneous gains across multiple companies in the same sector point to coordinated buying pressure.

Outside the financial sector, two Z-category textile and manufacturing firms featured among the gainers. Familytex (BD) advanced 27.59%, while HR Textile rose 25% to Tk22. In the food and consumer segment, Meghna Condensed Milk gained 23.61% to Tk35.60, and Meghna PET Industries increased 22.92% to Tk29.50. Prime Finance & Investment climbed 17.39% to Tk5.40, though its rise was also attributed to short-term trading trends rather than any fundamental improvement.

Market analysts said the dominance of financially weak companies reflects structural weaknesses. "When fundamentally weak companies top the gainers' chart, it indicates that investor confidence has not yet fully shifted toward strong, fundamentally sound stocks," one analyst noted.

Meanwhile, the broader market showed signs of recovery. After suffering the steepest single-day fall in six years early in the week, the market rebounded as investors returned to buy stocks at lower prices.

Gradual easing of concerns over the Middle East conflict and domestic fuel supply, coupled with improving investor sentiment, contributed to rising buying pressure and helped market indices recover by week's end

Stocks rebounded today (25 March) at the Dhaka Stock Exchange (DSE), with the benchmark index recovering from the previous session's sharp decline as late-session buying revived investor interest despite lingering global uncertainties.

The benchmark DSEX index gained 31 points, or 0.59%, to close at 5,316, reversing part of Tuesday's (24 March) losses.

The blue-chip DS30 index also edged higher, rising 8 points or 0.41% to settle at 2,019. Market breadth turned positive, with 241 issues advancing against 102 decliners, while 47 stocks remained unchanged.

Turnover on the premier bourse rose significantly, increasing by 23% to Tk604 crore, indicating improved participation compared to the previous session.

However, market sentiment remained cautious as investors continued to weigh the implications of the ongoing geopolitical tensions in the Middle East.

Market analysts believe that while the day's recovery is a positive signal, the overall outlook remains uncertain.

Continued volatility in global energy markets and geopolitical developments are likely to keep investors cautious in the near term, with market direction depending on both external factors and domestic economic stability.

According to EBL Securities, the market regained some recovery momentum following the earlier selloff, supported by bargain hunting in the final trading hour.

For most of the session, indices moved sideways as both buyers and sellers remained active, reflecting uncertainty among investors.

The brokerage noted that renewed buying interest toward the close helped drive a broad-based price recovery.

Several heavyweight stocks played a key role in pulling the indices upward. Major contributors included BRAC Bank, Square Pharmaceuticals, British American Tobacco Bangladesh, Pubali Bank PLC, and Eastern Bank PLC.

On the sectoral front, engineering stocks dominated trading activity, accounting for 13.6% of total turnover, followed by pharmaceuticals at 12.7% and banking at 11.1%. Among individual stocks, ACME Pesticides Limited led the turnover chart, alongside Orion Infusion Limited, Sunlife Insurance Company Limited, and Lovello Ice-cream PLC.

Most sectors posted gains during the session, reflecting a broad-based recovery.

Mutual funds emerged as the top-performing sector with a 3.7% return, followed by general insurance at 3.1% and life insurance at 2.8%.

However, some sectors remained under pressure, with services declining by 1.0%, telecommunications by 0.7%, and cement by 0.2%.

Top gainers of the day included several mutual funds and manufacturing companies, while losses were concentrated among textile and smaller-cap stocks, indicating selective profit-taking in certain segments.

Meanwhile, the Chittagong Stock Exchange presented a mixed picture.

The CSCX index fell by 16 points to 9,101, while the CASPI index declined by 39 points to 14,914. However, turnover at the port city bourse increased by 6% to Tk20 crore.

Akij Food & Beverage Limited, one of the largest beverage conglomerates in Bangladesh, has secured approval from the stock market regulator to issue a Tk500-crore zero-coupon bond, aiming to repay existing loans and diversify its funding sources.

The Bangladesh Securities and Exchange Commission approved the move at a commission meeting held today (25 March) at its headquarters, allowing Akij Food to raise funds through the bond at face value.

According to a press release of the commission, the bond will be unsecured, non-convertible, and fully redeemable, with a tenure ranging from six months to a maximum of five years.

Given the nature of a zero-coupon bond, Akij Food & Beverage will raise approximately Tk388 crore from the capital market and use the entire amount to repay existing loans. However, the company will repay Tk500 crore to investors upon maturity, according to sources involved in the bond issuance.

The bond will be issued through private placement to banks, non-bank financial institutions (NBFIs), insurers, institutional investors, and high-net-worth individuals. The face value of each unit of the bond is Tk10 lakh.

Sena Insurance PLC will act as the trustee, while North Star Investment (BD) Limited will serve as the fund arranger.

According to its website, Akij Food began its journey in 2006 and has since become the largest beverage conglomerate in Bangladesh. It is also the highest taxpayer in the country's beverage sector.

The company offers a diverse range of products, including carbonated soft drinks, mineral water, fruit juices, snacks, and dairy products. Its portfolio includes several leading brands such as Mojo, one of the highest-selling cola brands; Frutika, one of the most popular juice drink brands; and Speed, one of the top carbonated beverage brands in terms of both value and volume across all CSD categories.

Despite its strong and stable market position, Akij Food has so far remained absent from the capital market for long-term fundraising, as its solid reputation has enabled it to secure bank financing with ease.

After repeated efforts, capital market intermediaries have finally facilitated the company's entry into the market through this bond issuance.

Sources said that over the past five years, Akij Food's business has grown rapidly amid rising demand. In the 2024-25 fiscal year, its gross profit exceeded Tk400 crore, while its operating profit stood at over Tk200 crore as of June 2025, according to data seen by The Business Standard.

In comparison, in FY21, the company recorded a gross profit of around Tk200 crore and an operating profit of Tk60 crore.

An official from the fund arranger, speaking on condition of anonymity, told this newspaper, "The business size and market presence of Akij Food are significant, and it continues to grow steadily. However, the company has been reluctant to raise funds from the capital market, as it can easily obtain bank loans to run its operations and expand capacity."

According to its website, the company exports its products to more than 47 countries across Asia and Africa, including Malaysia, the UAE, Qatar, Kuwait, Singapore, India, Sri Lanka, South Africa, Senegal, Somalia, and Canada.

The share of defaulted loans in the banking sector for loans has risen to over 31% in the past year.

The central bank published a banking "update" report this month, which shows that by the end of the December quarter, the default rate for loans stood at 31.20%, up from 19.90% during the same period the previous year.

In monetary terms, a 31.20% default rate for such large loans amounts to Tk5,54,486 crore.

According to data from Bangladesh Bank, the increase is largely due to the adoption of international standards for loan classification starting in 2025. Under the revised rules, loans not repaid within a specified period are considered overdue, and if unpaid for more than 90 days, they are classified as defaulted, down from the previous threshold of 180 days. This stricter 90-day rule has contributed to the rise in defaulted loans.

A senior central bank official said that counting loans as defaulted after 90 days has increased the volume of non-performing loans since last year. However, due to various policy support measures introduced by Bangladesh Bank toward the end of 2025, the level of defaulted loans declined slightly in the December quarter compared to September.

One such measure allows banks to write off bad loans earlier. Previously, loans could only be written off after remaining classified as bad for two consecutive years. Under the new framework, write-offs can occur sooner.

Bangladesh Bank data shows that the default rate for loans stood at 36.30% at the end of September.

Another senior official noted that many institutions have restructured their defaulted loans following policy support from the central bank. As a result, a significant amount has been removed from the default list; otherwise, the December figure would have been even higher.

Bankers say the rise in defaulted loans over the past one and a half years reflects the exposure of previously hidden bad loans. The practice of showing loans as regular without actual repayment is no longer allowed.

They also noted that foreign audit firms have reviewed loan portfolios of several banks. In particular, the five Islamic banks undergoing consolidation – now merged into a single entity – have seen a sharp increase in defaulted loans.

According to bankers, the current situation reflects years of irregularities, fraud, and corruption in the banking sector during the Awami League government's 15-and-a-half-year tenure. Major groups such as S Alam Group, Beximco Group, Nasa Group, Bismillah Group, and Hall-Mark Group, along with scandals involving BASIC Bank, have contributed to the rise in defaulted loans.

Islamic banks have been the most affected, though several conventional banks have also experienced major loan irregularities.

The Ministry of Health has instructed the country's pharmaceutical industry to explore alternative sources for importing raw materials to ensure uninterrupted medicine supply amid ongoing conflict in the Middle East and global uncertainties.

The directive was issued as part of precautionary measures to prevent disruptions in drug production due to potential supply chain shocks triggered by geopolitical instability, according to officials concerned.

The government has particularly urged the Bangladesh Association of Pharmaceutical Industries to reduce overreliance on a single region, especially China and India, for importing Active Pharmaceutical Ingredients (APIs), and instead identify other potential sourcing countries.

The decision came at an emergency meeting titled "Preparedness for potential health risks due to the ongoing war in the Middle East," held at the health ministry today (28 March). The meeting was chaired by Health and Family Welfare Minister Sardar Md Sakhawat Husain.

Officials at the meeting noted that the conflict in the Middle East could disrupt global supply chains, posing risks to the country's pharmaceutical production and distribution systems.

In this context, stakeholders were asked to take immediate and effective measures, including identifying alternative sources for API imports, as part of advanced preparedness to face any potential crisis.

The pharmaceutical industry body has also been requested to regularly update the Directorate General of Drug Administration (DGDA) on the progress of steps taken in this regard.

Bangladesh lost an estimated $68.3 billion through trade-related illicit financial flows between 2013 and 2022, according to a report by Global Financial Integrity released on Thursday (26 March).

Trade misinvoicing involves deliberately falsifying the value or quantity of imports and exports to evade taxes, shift profits, or transfer capital abroad, report said.

The report finds that Bangladesh is among the top 10 countries in developing Asia in terms of total trade value gaps.

In Bangladesh's case, a significant portion of the illicit flows is linked to trade with advanced economies. The report estimates that around $33 billion of the total gap occurred in transactions with countries such as the United States and those in Europe.

The findings suggest that Bangladesh's exposure is not limited to regional trade but is tied to global supply chains, particularly in export-oriented sectors and import-dependent industries.

Compared to other South Asian countries, Bangladesh's losses are substantial but remain far lower than India's, which recorded more than $1.06 trillion in illicit trade flows over the same period.

Sri Lanka, by contrast, recorded a smaller volume of about $24 billion in trade gaps with advanced economies, though its economic vulnerability amplifies the impact of such leakages.

Across developing Asia, trade-related illicit financial flows reached an estimated $1.69 trillion in 2022 alone, underscoring the scale of the challenge.

Major economies such as China, Thailand and India account for the bulk of these flows, though the problem spans countries of all sizes.

The study said, such practices remain deeply embedded across Asian economies, with no clear sign of decline over the past decade.

When the money market is already stressed by high government borrowing, newly introduced programmes such as the Family Card and farm loan waivers are likely to create additional fiscal pressure, potentially crowding out the private sector.

The extra spending on social programmes may come at the cost of higher inflation, as low revenue earnings will prompt the government to source funds from banks, raising interest rates and increasing business costs.

A senior Bangladesh Bank executive said that in this situation, the government has been aggressively seeking external funding sources to reduce borrowing pressure on the domestic market.

Government borrowing already grew nearly 30% year-on-year in January, surpassing the monetary target of 21.6% set for FY26 by Bangladesh Bank. The call money rate, which fell below the policy rate of 10% at the beginning of March, surged above it again amid rising import costs following the Iran war.

For example, average call money rates for short notice loans jumped to 10.50% on 16 March from 9.85% on 5 March, central bank data shows. Meanwhile, the dollar exchange rate, which had remained stable for months, rose to nearly Tk123 from Tk122.30 in just two weeks in March.

Bangladesh Bank has allowed the taka to depreciate, prioritising the protection of foreign exchange reserves amid rising import costs. Faster taka depreciation will directly affect inflation, which began rising in February, exceeding 9%.

The senior Bangladesh Bank executive told The Business Standard that rates for treasury bills and bonds are expected to rise soon, as the government will need to borrow more to fund newly introduced social programmes and cover rising energy bills.

He added that government borrowing is likely to increase significantly in May and June when the programmes are implemented on a full scale. "The government can meet the demand from both domestic and external sources," he said.

Among domestic sources, borrowing will come through treasury bills, bonds, and savings instruments, as the central bank is not planning to print money. Higher treasury bills and bond rates will influence market lending rates, which will ultimately impact inflation, he added. Central bank data shows inflation, which had eased for a few months, began rising again in February, surpassing 9%.

The government may consider revising the ceiling of savings instruments from the existing Tk60 lakh, said the executive, who wished to remain anonymous. However, sourcing foreign funds is the better option to ease liquidity stress and maintain balance in the money market, he added.

In this context, the government is emphasising the inflow of foreign loans from India and China, Bangladesh's major lenders, to meet the additional demand, said a senior Bangladesh Bank official.

The government has already begun addressing issues surrounding projects financed under India's line of credit (LoC) and the resumption of Export Credit Agency (ECA) support for capital machinery imports from China, which had stalled.

Over the past two years, the government has largely relied on bank borrowing to meet operational costs due to low foreign fund inflows. The fuel price surge following the Iran war intensified the funding crisis, prompting the government to seek foreign sources.

Prime Minister's Economic and Planning Adviser Rashed Al Mahmud Titumir said the government is reallocating funds from various sectors and considering low-interest loans from international development agencies to ensure sufficient fuel imports.

Speaking to journalists on 15 March, he added that the government is also exploring support from institutions such as the IMF and World Bank.

Amid the funding crunch, the government recently launched the pilot phase of the Family Card programme, under which at least 40,000 families will receive benefits during the four-month trial.

When the programme runs in full swing, providing Tk2,500 per month to two crore beneficiaries by 2030, it will cost about Tk5,000 crore per month, roughly Tk60,000 crore annually, according to a study of think-tank Research and Policy Integration for Development (RAPID).

The newly introduced farm loan waiver programme will cost approximately Tk1,550 crore from the budget. The Cabinet approved a proposal on 26 February to waive agricultural loans of up to Tk10,000, including accrued interest, benefiting around 12 lakh farmers in line with the government's Election Manifesto 2026.

Expert views

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said Bangladesh cannot navigate heightened global uncertainty with business-as-usual budgeting, yet crude austerity is not the answer.

"The challenge is to spend smarter. The tax system collects too little from those most able to pay and remains overly dependent on trade taxes. Widening the net through digital invoicing, stronger compliance among large taxpayers, and fewer discretionary exemptions would strengthen revenues without raising rates," he said.

The economist added that deficit financing is becoming more difficult. External borrowing is costlier in a risk-averse world, while excessive domestic borrowing risks crowding out private investment. Bangladesh cannot rely indefinitely on expensive bank borrowing or short-term instruments to close structural gaps.

Ezazul Islam, director general of the Bangladesh Institute of Bank Management (BIBM), said the new government will need substantial funds in the coming days to implement the new pay scale for government employees and social programmes like the Family Card, farmer support, and agriculture loan waivers.

He warned that continued high borrowing would increase the debt burden when the debt-to-GDP ratio is already 40%, and inflation will not ease as expected. The government now faces two options: compromise traditional development projects like roads and transport to reduce budgetary pressure, or increase foreign borrowing. Major sources of foreign borrowing include the IMF, Asian Development Bank, World Bank, and Islamic Development Bank, which the government has already begun contacting.

US consumer sentiment fell more than expected in March, touching a three-month low, as war in the Middle ​East stoked inflation worries and cast a shadow over the economic outlook.

The decline, reported by the University of Michigan’s Surveys of Consumers on Friday, occurred across political ‌party affiliation and age groups, with large decreases among middle- and higher-income consumers as well as those owning stocks.

The month-long US-Israeli war with Iran has sent global oil prices surging more than 50 percent. Retail gasoline prices have jumped $1 to an average of $3.98 per gallon, data from motorist advocacy group AAA showed, while the S&P 500 index has dropped about 6.7 percent.

Though the correlation between consumer sentiment and spending is weak, rising gasoline prices and falling share ​values, combined with a stagnant labor market, could undercut consumption and hamper economic growth. Higher-income households have led consumer spending, underpinned by robust wealth levels.

“Sentiment hit a record low ​in mid-2022 when inflation was at its highest level in decades, but the economy held up with solid GDP growth and an historically strong labor market,” said Gus Faucher, chief economist at PNC Financial.

“But if the conflict drags on, gasoline prices move even higher in the summer driving season, and stocks continue to falter, consumers ​could throw in the towel and start to pull back on their spending.”

The University of Michigan said its Consumer Sentiment Index dropped to a final reading of 53.3 this month, the lowest ​reading since December, from 55.5 earlier. Economists polled by Reuters had forecast the index would ease to 54.0.

It was at 56.6 in February and is not too far from a record low touched in June 2022. The survey’s short-run economic outlook gauge plunged 14 percent, while a measure of year-ahead expected personal finances sank 10 percent. Declines in long-run expectations were more subdued, the survey showed.

“These patterns suggest that, at this time, consumers may not expect recent ​negative developments to persist far into the future,” said Joanne Hsu, the director of the University of Michigan’s Surveys of Consumers.

“These views are subject to change, however, if the Iran conflict ​becomes protracted or if higher energy prices pass through to overall inflation.”

WILL GASOLINE PRICES OFFSET TAX CUTS?

There are worries that gasoline prices, should they continue to rise, could cut into the fiscal boost from tax cuts ‌ushered in by the One Big Beautiful Bill Act. Economists at JPMorgan estimated that could happen if the national average price rises close to $5 per gallon or more. Prices at the pump in California and Washington state have already topped $5 per gallon.

“As things stand now, the increase in gasoline prices to date is unlikely to fully offset the magnitude of lower taxes,” they wrote in a note.

“Of course, even if higher gas prices don’t fully offset the OBBBA, they would still reduce real spending power compared to what was expected before the Mideast conflict began. Higher gas prices are also ​mostly felt more evenly across the income distribution.”

Stocks ​on Wall Street extended their decline, with ⁠the S&P 500 and Nasdaq Composite indexes dropping to more than six-month lows. The dollar was steady against a basket of currencies. US Treasury yields were mixed.

The survey’s measure of consumers’ expectations for inflation over the next year jumped to 3.8 percent this month from 3.4 percent earlier in March and ​in February. Consumers’ expectations for inflation over the next five years slipped to 3.2 percent from 3.3 percent last month.

The Federal Reserve left its benchmark ​overnight interest rate in the ⁠3.50 percent -3.75 percent range this month. In updated projections released alongside the decision, US central bank policymakers anticipated higher inflation and only a single reduction in borrowing costs this year.

“The evidence would appear to be for now that the inflation impact of high gas prices is expected to be temporary, but it would appear that the year-ahead expectation is set to jump above 4 percent in the preliminary April report,” said ⁠John Ryding, chief ​economic advisor at Brean Capital.

“From a Fed perspective, the majority of the (policy-setting) committee might interpret this to mean that ​rates should be held steady.”

Bangladesh faces a looming economic challenge stemming from global oil price crossing a critical threshold of US$120 per barrel amid the escalating Mideast tensions, with an extra burden on its cautiously tailored budget.

Researchers at a press briefing Saturday warned that such an oil surge could impose a huge burden of Tk 610 billion in additional annual spending to fuel the country's economy.Global economy trends

Their note of alert is underlined with serious concerns about economic sustainability, industrial growth, and employment.

Change Initiative has carried out a study on this score where the researchers have revealed that every $10 increase in Brent crude-oil price per barrel translates into nearly $1 billion in extra annual expenditure for Bangladesh.

The country imports about 95 per cent of its energy needs, and this dependency leaves the economy "highly vulnerable to global market volatility", the study notes, in the wake of energy blockages in the Gulf amid the hit-and-kill US-Israel war against Iran.

If prices remain above $120 for an extended period, the annual cost could balloon to $4-5 billion, creating unprecedented fiscal pressure.

The small and medium enterprise (SME) sector, which accounts for 70-80 per cent of national employment and contributes 25-30 per cent to gross domestic product (GDP), is expected to be hit hardest. Rising fuel costs would increase production expenses, reduce competitiveness, and potentially trigger widespread job losses.

Analysts caution that prolonged subsidies are not a viable solution, and the government may eventually be forced to adjust energy prices, risking de-industrialization.

Chief researcher M. Zakir Hossain Khan points out a blessing in disguise out of the crisis, emphasizing that "while the situation is dire, it also presents a chance for Bangladesh to accelerate its transition toward renewable energy".

He notes that countries such as China, India, and Vietnam have successfully invested in renewables to stabilize their industries, and Bangladesh must follow suit to safeguard its future.

The study reveals that rooftop solar installations in industrial zones could reduce operating costs by 30-50 per cent while cutting carbon emissions significantly.

In fact, utilizing just 10 per cent of unused space in industrial parks could generate 57 megawatts (MW) of solar power, reducing emissions by over 51,000 tons of carbon dioxide annually.

Expanding this to 20 per cent could double the capacity, further strengthening energy independence.

Researchers also highlighted the potential for carbon-credit revenues, estimating that Bangladesh could earn around $0.40 million annually by reducing emissions in SME clusters.Bangladesh tourism guide

Sectors such as leather, plastics, packaging, and light engineering have been identified as priority areas, with the potential to cut emissions by up to 49 per cent through targeted interventions.

The urgency is underscored by Bangladesh's Nationally Determined Contribution (NDC) target, which aims to reduce 69.84 million tonnes of carbon-dioxide emissions by 2035.

Achieving this goal will require immediate and decisive action to transform the energy landscape.

As global oil prices continue to climb, Bangladesh stands at a crossroads.

Failure to act could result in economic instability, job losses, and weakened industrial capacity.

But with bold investments in solar and other renewable sources, the country has the opportunity to not only mitigate the crisis but also position itself as a leader in sustainable industrial growth, the study concludes.

Domestic gold prices have fallen by nearly Tk 36,000 per bhori over the past 23 days, driven by a sharp decline in global rates amid shifting geopolitical tensions in the Middle East.

The price of gold per bhori stood at around Tk 2.41 lakh yesterday, down from around Tk 2.77 lakh on March 3, according to data from the Bangladesh Jeweller’s Association (Bajus).

The domestic market has adjusted prices 12 times between March 1 and March 25, with 10 of those changes reflecting downward revisions.

The decline comes after a month-long rally that saw gold prices more than double in just over a year. In January 2025, 22-carat gold was priced at around Tk 1.40 lakh per bhori. By the start of this year, it had risen to Tk 2.22 lakh, and peaked at Tk 2.86 lakh on January 29, 2026.

The recent drop mirrors volatility in international markets, where gold prices have fallen by $757.43 per ounce over the past 30 days.

On Monday, spot gold briefly touched $4,100 per ounce, its lowest level since December 11, before recovering to $4,545.34 by yesterday, buoyed by a weaker dollar and falling oil prices.

The rebound followed US President Donald Trump’s announcement of a five-day delay in planned strikes on Iran’s power plants, which also sent crude oil prices down 13 percent. However, the recovery has not offset the broader monthly decline.

Bajus said the prices of pure gold in the country’s bullion market have fallen, prompting adjustments in gold rates. However, the main reason behind the decline is the continued drop in global gold prices.

Dewan Aminul Islam Shahin, chairman of Bajus’ standing committee on pricing and price monitoring, told The Daily Star that local gold prices depend on multiple factors -- international benchmark, import costs, and demand.

He explained that local prices reflect a lag tied to import cycles. Gold imported into Bangladesh undergoes 12 to 15 days of processing before reaching retail outlets, which delays the transmission of international price movements.

“International gold markets have been highly volatile, with prices swinging sharply within hours,” Shahin said. “Gold tends to rise during global crises, such as wars or energy shortages, and falls when there are signs of peace.”

Industry insiders say renewed conflict could reverse the downward trend, and if the war drags on with rising damages, gold may once again appeal to investors.

Meanwhile, international analysts expect gold’s real yields to continue moving higher, according to a Reuters report.

With hopes of de-escalation in the Middle East conflict, and “as USD strength eases, safe-haven demand starts to reassert. This reinforces the view that gold didn’t lose its safe-haven appeal. ‌It was briefly crowded out by ⁠the USD, and now that pressure is easing,” Christopher Wong, a strategist at Singapore-based OCBC, told Reuters.

He also said gold remains sensitive to US Federal Reserve policy expectations, dollar strength, and geopolitical developments. “The rebound suggests dips may continue to find support unless real yields move meaningfully higher.”

Two liquefied petroleum gas tankers, BW Elm and BW Tyr, are crossing the ​Strait of Hormuz bound for India, according to ‌ship tracking data from LSEG and Kpler.

The US-Israeli war against Iran has all but halted shipping through the strait, but Iran ​said this week that “non-hostile vessels” may transit the waterway ​if they coordinate with Iranian authorities.

The two India-flagged vessels have crossed the Gulf area and are in ​the eastern Strait of Hormuz, the data showed. India is ​gradually moving its stranded LPG cargoes out from the strait, with four LPG tankers moved so far - Shivalik, Nanda Devi, Pine Gas, and Jag ​Vasant.

As of Friday, 20 Indian-flagged ships including five ​LPG carriers were stranded in the Gulf, Rajesh Kumar Sinha, special ‌secretary in the federal shipping ministry, said.

The International Monetary Fund (IMF) announced on Friday that it has reached a staff-level agreement with Pakistan to unlock a new $1.2 billion package as part of its support programs for the country.

The South Asian nation is one of the largest debtors to the IMF after Argentina and Ukraine.

The IMF in a statement praised the Pakistani authorities' commitment to "pursuing sound and prudent macroeconomic policies to preserve the recent gains in macro-financial stabilization, while deepening structural reforms to accelerate growth and strengthening social protection to mitigate the impact of volatile energy prices on the most vulnerable."

The disbursement is subject to approval by the IMF Executive Board, according to the fund's statement.

The agreement, if approved, would give Pakistan access to $1 billion under the Extended Fund Facility and around $210 million under the Resilience and Sustainability Facility, it said.

The dollar rose on Friday and was on course for its strongest monthly gain in ​almost a year, buoyed by safe-haven demand as the Middle East war intensifies and hopes fade for de-escalation.

The yen was particularly under pressure, falling in afternoon trading ‌to its weakest since July 2024 and raising the possibility of currency market intervention by the Japanese authorities.

Iran is expected to respond on Friday to a US peace proposal to end the war, with US President Donald Trump and senior White House officials told by interlocutors to expect a counter-proposal.

US Secretary of State Marco Rubio said that the war was expected to last weeks, rather than months, and that US objectives ​could be met without ground troops.

US consumer sentiment slipped to a three-month low in March as war-driven oil price rises weighed on the economic outlook.

Safe-haven flows underpinned the ​dollar, which has also been lifted by rising expectations for a US rate increase this year. The dollar index rose 0.3 percent to 100.17, up 2.57 percent so far in March and on course for its best monthly showing since July 2025, when it rose 3.4 percent.

“Weekend trading is also, to a certain degree, ​taking hold in terms of what you might or might not want to be long or short over the weekend,” said Marvin Loh, senior global market strategist at State Street ​in Boston. “The dollar has been pretty correlated with risk these days in the correct way.”

While senior Iranian officials said diplomacy continued, the Islamic Revolutionary Guard Corps reiterated a ban on all shipping through the Strait of Hormuz that was linked to allies of the US and Israel.

Markets stayed on edge at the end of another volatile week, as Trump again extended a deadline for striking Iran’s energy facilities even as Washington and Tehran ​offered starkly conflicting accounts of diplomatic progress.

The Pentagon is considering sending up to 10,000 more ground troops to the region, the Wall Street Journal reported, further dimming investor hopes of ​a near-term end to the war.

Oil prices ​rose on Friday and notched weekly gains, reflecting scepticism about prospects for a ceasefire in the ‌month-old Iran war.

Brent crude futures rose by $4.56, or 4.2 percent, to $112.57 a barrel. US West Texas Intermediate futures rose $5.16, or 5.5 percent, to settle at $99.64.

The Brent benchmark has jumped 53 percent since February 27, the day before the US and Israel ​launched strikes against Iran, while WTI has gained 45 percent since then. On a weekly basis, Brent gained ​about 0.3 percent, while WTI gained over 1 percent.

Traders are cautious about Trump’s statements about the Iran talks. An Iranian official told Reuters that a US proposal conveyed to Tehran by Pakistan ​was “one-sided and unfair”.

“Investors remain focused on the war’s longevity rather than headlines, with any prolonged closure of ​the strait (of Hormuz) or damage to infrastructure keeping a significant risk premium in prices,” StoneX analyst Alex Hodes said.

While Trump extended his deadline for Iran to reopen the Strait of Hormuz or face the destruction of its energy infrastructure, ​the US has also sent thousands of troops to the Middle East, with Trump weighing whether ​to use ground forces to seize Iran’s strategic oil hub of Kharg Island. “We look for the oil market to develop ‌an immunity to Trump’s conciliatory comments and optimistic tone regarding a deal, especially given apparent intentions to send an additional 10,000 troops toward Iran,” oil trading adviser Ritterbusch & Associates said in a note to clients.

The Iran war has taken about 11 million barrels per day out of global oil supply, with the ​International Energy Agency describing the ​crisis as worse than the two 1970s oil shocks combined.

“Every day flows through the Strait remain restricted, more than 10 million barrels of oil are missing ... tightening the oil ​market further,” said UBS analyst Giovanni Staunovo.

Analysts at Macquarie Group said that oil ​prices will fall quickly if the war begins to wind down soon but still remain above pre-conflict levels. However, prices could rise to $200 if the war drags on until the end of June, they added.

Elsewhere, Russian oil producers have ​warned buyers that they could declare force majeure on supplies from ​major Baltic Sea ports after Ukrainian attacks on Russian energy infrastructure.

Major stock indexes eased on Thursday as Brent oil futures rose above $105 a barrel, with Iran's denial of any talks with the US dimming hopes of a quick resolution to the nearly one-month-long Middle East war.

Global debt markets also sold off, pushing yields higher, while safe-haven buying boosted the US dollar.

Prospects of a prolonged war in the Middle East fanned worries about energy supply disruptions. Oil and European natural gas rose, with Brent futuresLCOc1 up $4.77 at $106.99 a barrel and US crude futures CLc1 up at $93.64.

US President Donald Trump warned Iran on Thursday to "get serious" about a deal to end nearly four weeks of fighting.

Iran's Foreign Minister Abbas Araqchi had earlier said Tehran was reviewing the US proposal but that there were no talks on winding down the war. Iran on Thursday launched multiple waves of missiles at Israel.

The war, triggered by US–Israeli strikes on Iran in late February, has rattled global markets and effectively shut the Strait of Hormuz, a conduit for a fifth of global oil and liquefied natural gas flows.

Stocks fell "as oil prices resumed their upward climb", said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"Unfortunately, we're in a market that's being driven by oil prices. The rhetoric back and forth is continuing, and until talks begin, the market is going to be subject to the price of oil," he said.

The Dow Jones Industrial Average .DJI fell 75.50 points, or 0.19 percent, to 46,342.69, the S&P 500 fell 43.59 points, or 0.68 percent, to 6,547.14 and the Nasdaq Composite .IXIC fell 216.95 points, or 1.02 percent, to 21,705.16.

MSCI's gauge of stocks across the globe .MIWD00000PUS dropped 6.75 points, or 0.68 percent, to 988.71. The pan-European STOXX 600 index fell 0.64 percent.

Japan's Nikkei ended down 0.3 percent, while worries over rising energy costs hammered South Korea's KOSPI, which slumped 3.2 percent. Hong Kong's Hang Seng fell 1.9 percent and China's blue chips dropped 1.3 percent.

The Philippines held an unscheduled central bank meeting due to the turmoil, while Germany's central bank head said an ECB rate hike next month was "an option".

Fears of a 2022-style inflation shock have seen traders fully price out any chance of a Federal Reserve rate cut this year, further supporting the dollar.

Germany's two-year bond yield DE2YT=RR, sensitive to European Central Bank rate expectations, rose after falling on Wednesday. Bond yields move inversely to prices.

Worries about persistent inflation also drove US Treasury yields higher. The benchmark US 10-year Treasury yield US10YT=RR was last up 4.2 basis points at 4.37 percent. The two-year note's yield US2YT=RR was last up 5.4 bps at 3.934 percent.

Earlier, the yield on Japan's two-year government bond JP2YT=RR hit its highest level in 30 years at 1.33 percent, as traders cemented bets on another Bank of Japan rate hike as early as next month.

In currencies, the US dollar rose against most major currencies, reviving its safe-haven appeal.

Bangladesh will import two liquefied natural gas (LNG) cargoes from the spot market at prices lower than its recent purchases, as global fuel rates ease amid diplomatic efforts to de-escalate the US-Israel war on Iran.

The Cabinet Committee on Government Purchase yesterday approved the procurement for delivery in late April.

UK-based TotalEnergies Gas & Power Ltd offered $19.77 per MMBtu (metric million British thermal unit) for both cargoes, down from over $20 per MMBtu in deals struck earlier this month. The total cost is estimated at Tk 1,667 crore.

Officials at the Ministry of Power, Energy and Mineral Resources said the lower rate reflects a recent dip in global energy prices, driven by expectations of a negotiated end to the Middle East conflict, which has outweighed concerns over supply disruptions in the Gulf.

Oil prices have softened in recent days, creating a window for cheaper spot purchases.

According to US media reports, prices fell as a diplomatic push by the US to end the war gathered pace, eclipsing news of more troops being sent to the region and the Strait of Hormuz remaining largely shut.

Brent sank as much as 7 percent toward $97 a barrel before paring the drop, while West Texas Intermediate was near $88.

The US drafted a 15-point plan to help bring the conflict to a close, according to news reports. The proposal was delivered to Iran via Pakistan.

On March 17, the government approved two LNG cargoes from Aramco Trading Singapore at $20.96 and $20.92 per MMBtu.

Prior to that, three cargoes were secured at above $20, including one from TotalEnergies at $21.58 and two from South Korea’s Posco International at $20.76. The three shipments are expected to arrive between April 5 and April 13.

Immediately after the war began on February 28, Petrobangla, the state-owned agency responsible for managing gas, bought two emergency cargoes at significantly higher rates – $28.28 per MMBtu from US-based Gunvor and $23.08 from Vitol.

In December, LNG had cost just $9.99 per MMBtu.

Since the onset of the war, the government has approved at least nine spot LNG cargoes to avoid supply shortages.

Bangladesh’s growing reliance on LNG reflects structural shifts in its energy sector. Domestic gas output has stagnated, prompting imports since 2018 through floating storage and regasification units at Moheshkhali.

In 2025, Bangladesh imported 109 LNG cargoes worth $3.88 billion, up from 86 cargoes costing $3.02 billion in 2024, according to LightCastle Partners.

Qatar remained the largest supplier, followed by Oman’s OQ Trading, while the rest were sourced from the spot market.

Gold rose more ​than 1% on Wednesday, buoyed by a drop in oil prices that eased ‌inflation worries and tempered expectations for interest rate hikes, even as uncertainty surrounding the Middle East conflict lingered.

Spot gold was up 1.6% to $4,546.59 per ounce as of 9am EDT (1300 GMT) after hitting a four-month low on Monday. ​US gold futures for April delivery jumped 3.3% to $4,545.40.

"Gold is seeing a technical ​recovery and is also being supported by optimism that hostilities involving Iran ⁠may be diminishing, which has helped ease oil prices," said Peter Grant, vice president and ​senior metals strategist at Zaner Metals.

"We will need to see some further easing of inflation ​concerns to start thinking about the possibility of another US rate cut at some point this year. Gold could get back up to $5,000 if that were to become the case."

Oil prices sank after reports the ​US had sent Iran a 15-point proposal aimed at ending the war. Pakistan has delivered ​a proposal from the US to Iran, and either Pakistan or Turkey could be venues for discussions ‌to ⁠de-escalate the war, a senior Iranian official told Reuters. Meanwhile, the Pentagon is planning to send thousands of airborne troops to the Gulf to give Trump more options to order a ground assault, sources have told Reuters.

Falling oil prices help ease inflation pressures, reducing the likelihood of ​prolonged higher interest rates. ​Despite being an ⁠inflation hedge, gold loses appeal in high‑rate environments as the opportunity cost of holding a non‑yielding asset increases.

Analysts at SP Angel said in ​a note the recent volatility in gold prices reflects a significant ​rise in ⁠speculative investment flows in 2025.

"The recent pullback has seen a sharp exit of much of this capital. However, we see the recent trend of central bank reserve diversification as set to continue, ⁠with ​new entrants buying in 2026."

Spot gold rose 64% last ​year and prices hit an all-time high of $5,594.82 an ounce on 29 January.

Spot silver added 2.2% to $72.83, platinum gained 0.7% to $1,948.10 ​and palladium steadied at $1,439.31.