After a brief recovery in April, exports returned to a year-on-year decline last month, according to official data, as weak demand for apparel in key markets and lower order volumes from Western buyers weighed on earnings.

With merchandise exports dropping in May, overall shipments in the first 11 months of the current fiscal year also fell compared with the same period a year earlier.

Amid mounting external pressures largely caused by the war in the Gulf, exporters say a prolonged slowdown could put pressure on the country’s foreign exchange inflows and overall economic growth.

Meanwhile, with only one month remaining in the fiscal year, economists are questioning whether exports will end FY2025-26 in negative territory, reversing the recovery recorded in FY2024-25 after two consecutive years of decline.

In May, the country’s merchandise exports fell 7 percent year-on-year to $4.40 billion. As a result, exports in the July-May period of FY2025-26 declined 2.60 percent year-on-year to $43.80 billion, according to data released by the Export Promotion Bureau (EPB) yesterday.

The figure was down 2.6 percent from $44.95 billion in the corresponding period of the previous fiscal year, EPB data showed.

“Negative growth in May was expected,” said Mohammed Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

The readymade garment sector generates more than 80 percent of Bangladesh’s export earnings.

During the first 11 months of FY26, garment exports fell 3.4 percent year-on-year to $35.31 billion. Knitwear exports dropped 4.3 percent to $18.78 billion, while woven garment shipments declined 2.4 percent to $16.53 billion.

The BKMEA president said export orders have remained sluggish for much of FY26 as buyers in major markets continue to place orders cautiously amid global economic uncertainty.

“The global market is still weak, and export orders are lower than expected. That is why the sector is posting negative growth,” Hatem told The Daily Star.

He also pointed to the Eid-ul-Azha holidays, which began in late May and reduced factory working days, affecting production and shipments during the month.

According to Hatem, the strong growth recorded in April was partly due to a favourable comparison with the same month a year earlier, when overall production hours were reduced by Eid holidays.

“This year’s April had more working days, so some growth was natural. But the market situation has not improved significantly,” he said.

Hatem said the apparel sector has been under pressure throughout the fiscal year and there are few signs of a sharp recovery in the coming months. “We do not see any strong indication that orders will rebound significantly in the near future.”

He added that a prolonged weakness in exports could put pressure on the country’s foreign exchange inflows and overall economic growth.

In the first 11 months of the current fiscal year, Bangladesh’s terry towel and linen exports fell 14 percent as manufacturers grappled with weak global demand and rising business costs.

M Shahadat Hossain Sohel, president of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, said the sector was being squeezed by multiple crises, including the lingering impact of the Russia-Ukraine war, conflicts across the Middle East and an inflation-driven slowdown in demand in key markets such as Europe and the United States.

He said many small and medium-sized factories had shut down since the pandemic, while larger firms were surviving largely on bank financing rather than profits.

Sohel also blamed soaring production costs, unreliable gas and power supplies, and a difficult business environment for eroding competitiveness.

According to him, without stronger policy support, similar to incentives offered by India to its textile sector, Bangladesh could lose further ground in global markets.

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said it was still too early to conclude whether Bangladesh’s exports would end the fiscal year in negative territory, as one month remained.

“However, export growth is unlikely to improve significantly,” he said.

Razzaque said the prolonged weakness in exports was already affecting investment and the labour market. If exports fail to recover quickly, the adverse effects could persist for a longer period.

Citing data from the Bangladesh Bureau of Statistics (BBS), he said the country had been facing labour market challenges for the past two years, making a near-term recovery unlikely.

As Bangladesh’s exports are heavily concentrated in the readymade garment sector, any slowdown in apparel shipments has ripple effects across the broader economy, including backward linkage industries, said the economist.

The government has increased electricity tariffs by 16.68% at the consumer level in a move aimed at reducing the power sector's mounting subsidy burden, a decision economists, industry leaders and energy analysts warn could fuel inflation, raise business costs and further strain households already grappling with rising living expenses.

The Bangladesh Energy Regulatory Commission (BERC) today (3 June) raised the weighted average retail electricity tariff by Tk1.52 per unit, from Tk9.11 per kilowatt-hour (kWh) to Tk10.63 per kWh.

The new rates will take effect from June's billing cycle.

The regulator also increased the weighted average bulk electricity tariff by 19.85%, or Tk1.39 per unit, from Tk7.00 per kWh to Tk8.39 per kWh.

The increase follows a series of energy price adjustments introduced by the government in recent months as it sought to contain subsidy costs.

Amid pressure on the energy sector stemming from the Iran war, the government raised the prices of four types of fuel oil on 18 April. While prices remained unchanged in May, three of those fuel types were increased again in June, with diesel being the only exception.

Following those fuel price adjustments, discussions intensified over a possible increase in electricity tariffs, culminating in today's decision.

The wholesale electricity tariff was last revised in February 2024, when the average bulk tariff was increased from Tk6.70 per unit to Tk7.40.

Subsidy reduction behind the hike

BERC Chairman Jalal Ahmed said the latest adjustment was necessary to reduce the government's subsidy requirement in the power sector.

According to BERC, the government would need around Tk56,000 crore in power subsidies in fiscal year 2026-27 under the existing tariff structure.

The latest tariff increase is expected to reduce that requirement by about Tk14,200 crore, lowering the subsidy burden to nearly Tk41,000 crore.

"Even after the tariff increase, the government will still have to provide a substantial amount of subsidy," Jalal said while announcing the decision.

Officials at the Power Division said the move was consistent with the government's broader commitment to gradually reduce energy subsidies, a reform recommendation repeatedly highlighted by the International Monetary Fund (IMF).

Several officials familiar with the matter, however, said there had also been pressure to demonstrate progress on subsidy reforms ahead of budget preparations and ongoing discussions with development partners.

Responding to questions about whether external lenders had influenced the decision, the BERC chairman said, "There was no pressure. The decision was taken quickly considering the upcoming budget."

Inflation fears mount

Economists warned that the sharp rise in electricity prices would inevitably raise living costs and add to the cost pressures already facing businesses.

Asked whether BERC had assessed the impact of the tariff increase on inflation and household expenditure, Jalal Ahmed acknowledged that no such evaluation had been conducted. "The price increase will increase people's expenses, but an economic evaluation has not been done. There is an opportunity to do this."

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said the increase would have direct consequences for inflation and industrial production costs.

"The tariff hike will certainly contribute to higher inflation and increase the cost of industrial output. However, the current level of subsidy in the power sector is also unsustainable," she said.

She argued that tariff increases alone would not solve the problem and called on the government to address inefficiencies, wastage and governance shortcomings within the sector.

Industry, consumers faces higher power bills

Industrial and commercial consumers have been among the hardest hit by the latest adjustment.

Commercial tariffs have been increased from Tk13.46-16.00 per unit to Tk15.36-18.40 per unit, while small industries will now pay Tk12.73 per unit, up from Tk11.05.

Medium-voltage industrial consumers will pay between Tk12.52 and Tk16.36 per unit, compared with Tk10.94-Tk14.24 previously. High-voltage industrial tariffs have been raised to Tk12.12-Tk15.91 per unit from Tk10.62-Tk13.84.

Shawkat Aziz Russell, president of the BTMA, said the increase would significantly affect the country's export-oriented textile and apparel sector.

"Energy accounts for nearly 30% of total production costs in many textile and spinning units, and this increase in power prices could raise overall production costs by around 10%," he said.

"At a time when manufacturers are already struggling with high interest rates, gas shortages, rising wages and global market uncertainties, this additional burden will further erode the competitiveness of Bangladeshi products in the international market," he added.

"We understand the government's need to mobilise resources ahead of the national budget, but such a sharp tariff hike will have broader consequences for inflation, investment and industrial growth. This decision could prove highly disruptive to the overall economy if not accompanied by structural reforms in the power sector," Russell further said.

Mahmud Hasan Khan, president of the BGMEA, told TBS that businesses were already struggling with higher fuel costs and operational challenges.

"We have asked the government to ensure an uninterrupted power supply. It would have been better if the decision to raise electricity prices had come after that was guaranteed," he said.

Speaking to TBS on the issue, Business Initiative Leading Development Chairperson Abul Kasem Khan said that while Bangladesh is able to produce goods at lower costs than some countries in certain cases, energy costs account for a significant share of production expenses. As a result, an increase in electricity prices directly raises production costs.

"Broadly speaking, there is little we can do – the cost of production will increase. We hope the government will consider the issue and provide some form of support or compensation in other ways. The additional cost could be partially adjusted through tax relief and other measures," he added.

Consumer groups also criticised the decision.

Residential consumers will also face higher bills across all consumption slabs. The lifeline tariff for consumers using up to 50 units a month has been increased from Tk4.63 to Tk5.32 per unit, while households consuming more than 600 units will pay Tk17.35 per unit, up from Tk15.40.

The Consumers Association of Bangladesh expressed deep concern, arguing that higher electricity prices would have a broad economic impact and that consumers would ultimately bear the burden.

In a statement, the organisation's vice-president, SM Nazer Hossain, said the move was difficult to justify at a time when many countries were waiving utility bills for low-income and marginal consumers.

He said that increasing prices in the name of reducing subsidies for small consumers was not acceptable.

Structural reforms needed

On the matter, Shafiqul Alam, lead energy analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), also noted that tariff hikes alone would not resolve the financial challenges facing the power sector.

According to him, structural reforms were essential to reduce dependence on subsidies.

"Addressing overcapacity and capacity payment obligations should be the priority. Tariff increases may provide temporary relief, but they will not resolve the underlying causes of the subsidy burden," he said.

He warned that continued additions to generation capacity despite sluggish demand growth could force the Bangladesh Power Development Board to keep making large capacity payments while purchasing less electricity from operational plants, increasing financial pressure on the sector.

Higher transmission charges

BERC has also increased the transmission, or wheeling, charge for Power Grid Bangladesh PLC from Tk0.3135 per kWh to Tk0.3886 per kWh, an increase of Tk0.0751 per unit.

The regulator, however, left retail demand charges unchanged across all consumer categories and retained the existing 0.5% rebate on net electricity bills for prepaid meter users.

Bangladesh is one of the fastest-growing economies, with expanding trade and GDP growth of around 4 percent. As a major South Asian trading hub, it attracts many foreign companies. While the country aims to become a developed nation by 2041 and continues progress towards the Sustainable Development Goals (SDGs), sustainable advancement requires looking beyond trade and economic indicators. The priority, I believe, should be a stronger focus on human capital development.

Human resources (HR) plays a vital role in corporate success by upholding company values, ensuring legal compliance, managing employees and mitigating risk. Today, HR managers face the challenges of rapid innovation, growing regulatory demands and increasingly complex operations. While compliance and HR are closely linked, they remain distinct functions. Effective coordination between the two is essential to maintain integrity and productivity.

Bangladesh produces around 750,000 graduates each year. National University accounts for about 450,000 of them, yet nearly 70 percent of its curriculum is considered misaligned with industry needs. Meanwhile, the economy generates around 300,000 formal jobs annually. Between 2016 and 2022, 8.7 million jobs were created for the 14 million young people who reached working age during that period. Bangladesh’s labour force stood at around 77 million in 2024, with an employment rate of 61.9 percent.

Most companies hire fewer than 10 employees a year. So, who succeeds in such a competitive environment? The phrase “managers hire attitude, not skills” reflects a hiring philosophy that prioritises mindset, character and coachability over technical ability. Yet 62 percent of employers report that young job applicants are underprepared or unsuitable for the roles they seek. There is also a shortage of skilled managers capable of training new entrants. Experience is often valued more highly than potential. Technology presents another challenge. By 2030, AI and automation could displace 20 percent to 30 percent of jobs in developing countries, including Bangladesh.

Against this backdrop, HR managers need a broad mix of soft skills, technical expertise and HR-specific competencies, as well as opportunities for continuous professional development. Recent global workforce and HR reports show that about 90 percent of executives plan to maintain or increase investment in upskilling, reskilling and workforce development in response to AI and labour market transformation. This reflects a strong commitment to learning and development.

These capabilities should be embedded in current and future managers through training and professional development and should also be considered during recruitment. Analytical thinking, active learning, problem-solving, stress tolerance, adaptability, social influence and leadership are essential qualities for HR and compliance professionals. Equally important is the ability to use technology effectively and navigate increasingly digital workplaces.

Empathy and emotional intelligence are also critical. HR professionals must respond effectively to unexpected situations, maintain discretion, uphold ethical standards and manage sensitive matters responsibly. Empathy and compassion help create supportive workplaces and strengthen employee engagement. Strong interpersonal communication skills are another key requirement. Effective communication shapes relationships, resolves conflicts and improves organisational performance. Coaching helps employees improve future performance, while counselling addresses emotional and psychological concerns. Both are important tools for supporting people in the workplace.

In Bangladesh, the outdated education system remains one of the greatest barriers to meeting the demands of a rapidly evolving job market. We continue to rely heavily on methods established nearly a century ago, particularly memorisation-based learning. If we want to compete globally, education reform must be the starting point. Competition today extends far beyond local industries. The global marketplace is the real arena. Adapting to change will help us remain competitive, but embracing change proactively will enable us not only to keep pace but also to lead with confidence in a rapidly evolving world.

The government is preparing to submit a three-year reform roadmap to the United Nations in a final effort to secure a postponement of Bangladesh's graduation from the least developed country (LDC) category until November 2029, despite a UN committee recommending a "shorter" extension.

A high-level meeting chaired by Finance Minister Amir Khosru Mahmud Chowdhury yesterday (3 June) reviewed and finalised a draft 25-point action plan that will be sent to the UN Committee for Development Policy (CDP) following the national budget announcement.

The reform commitments had already been presented to the CDP during a virtual meeting on 29 April, officials said. The proposed reforms are scheduled to be implemented between 2026 and November 2029 by various ministries and agencies, they said.

Officials said the central strategy hinges on demonstrating visible progress, monitored by a newly proposed oversight committee led by the finance minister, which will meet monthly to evaluate domestic implementation.

A senior official familiar with the discussions, on condition of anonymity, told TBS that the government plans to submit a formal letter to the CDP within the next two weeks outlining its commitments and implementation framework.

"The finance minister is highly committed to these reforms and emphasised during the meeting that they are necessary for the country's economic interests," the official said.

Based on an ERD press release, the country's newspapers yesterday published news that the CDP recommended that the United Nations General Assembly extend Bangladesh's preparatory period for LDC graduation until November 2029. But the CDP actually meant a shorter extension rather than a specific three-year period.

Reform commitments

The draft document, titled "Action Plan for Bangladesh's Preparation for LDC Graduation (2026-2029)," focuses on strengthening macroeconomic stability, financial sector governance, fiscal reforms, business deregulation, export diversification and institutional capacity.

The government has pledged to begin implementing measures to ensure macroeconomic stability from June 2027, with implementation continuing until November 2029. The plan includes stronger coordination between monetary and fiscal policies, regular assessment of demand and supply conditions for essential commodities, and trade policy adjustments to maintain uninterrupted supplies.

Bangladesh will also commit to addressing debt vulnerabilities identified in debt sustainability assessments conducted by the International Monetary Fund and the World Bank.

Financial sector reforms feature prominently in the draft roadmap. The government plans to strengthen Bangladesh Bank's supervisory authority and restore discipline across the financial sector by December 2027. It also intends to conduct annual comprehensive reviews of all commercial banks, covering asset quality, capital adequacy, liquidity, governance and stress testing, with corrective measures taken where necessary.

The reform programme further includes anti-corruption initiatives and governance improvements. The government aims to expand digital public service delivery systems to reduce direct interactions between citizens and officials while strengthening transparency, accountability and parliamentary oversight through November 2029.

Deregulation and tax reforms

Business deregulation is another major pillar of the proposed reforms. By June 2027, the government plans to establish a unified digital application platform covering licences, certificates, approvals and renewals. Licensing procedures will be simplified, provisional licences will be issued within seven days and the validity period of licences and permits will be extended from one year to five years.

The government also intends to make the National Single Window fully operational within the same timeframe.

Under fiscal reforms, state-owned enterprises are expected to become commercially viable by June 2028, with selected entities potentially listed on the stock market. The government has also pledged to broaden the tax base and strengthen transparency and accountability in the collection of fees and non-tax revenues.

Plans include integrating data systems between banks and the Central Depository Bangladesh Limited by June 2028 to facilitate automated reporting of savings and investment information.

Other measures include reducing the discretionary powers of tax officials, fully automating the National Board of Revenue and its commissionerates, limiting tax exemptions and strengthening value-added tax compliance.

To monitor implementation, the government intends to establish a joint government-private sector task force.

Export competitiveness and infrastructure

As part of efforts to diversify exports ahead of graduation, the government plans to provide targeted incentives and policy support to pharmaceuticals, leather, information and communications technology, agro-processing, jute and light engineering industries.

By December 2028, authorities aim to improve central effluent treatment facilities for the tannery sector and operationalise the Active Pharmaceutical Ingredient Park.

The government also intends to reduce logistics costs from 15% to 10% by June 2029 through port modernisation, customs reforms, improved multimodal connectivity and the development of integrated industrial and logistics corridors.

In the energy sector, Bangladesh plans to encourage investment in renewable energy, develop a carbon market policy and expand green financing initiatives.

The draft roadmap also outlines measures to secure Generalised Scheme of Preferences Plus benefits in the European Union after graduation. Bangladesh may additionally seek to conclude free trade agreements with South Korea, Oman, the United Arab Emirates, Hong Kong and New Zealand by 2029.

The government has pledged continued support for exporters seeking to meet standards in major markets, including the European Union, the United States, Japan, South Korea, China and regional trading partners.

A revised Smooth Transition Strategy reflecting current domestic and global realities is expected to be completed by March 2027, while progress on implementation will be reviewed monthly.

What happens next?

According to officials, the CDP's recommendation will now be considered by the United Nations Economic and Social Council (ECOSOC) at its meeting on 22-23 July. ECOSOC is expected to forward the recommendation to the United Nations General Assembly.

If procedural constraints prevent ECOSOC from formally adopting the recommendation, Bangladesh may have to seek approval directly from the General Assembly during its September session.

Experts said a favourable recommendation from ECOSOC would improve Bangladesh's prospects of securing an extension at the General Assembly.

Although Bangladesh has met all three formal graduation criteria, analysts believe the government's request for additional preparation time prompted the CDP to recommend a shorter extension as a special accommodation.

They stressed that commitments alone would not be sufficient. Bangladesh must demonstrate measurable progress on reforms and clearly identify areas where international institutions such as the IMF, the World Bank and the Asian Development Bank are involved.

Several experts described the CDP's recommendation as an exceptional concession rather than a precedent for future requests from other LDCs.

This year, Bangladesh is scheduled to graduate from LDC status alongside Nepal and Laos. However, Nepal has also submitted a letter to the CDP seeking a postponement.

After Prime Minister Tarique Rahman sent a letter to the CDP on 6 April requesting a three-year deferment of Bangladesh's graduation, the committee subsequently decided to recommend a postponement.

At that time, however, the CDP's assessment report on Bangladesh's preparedness for LDC graduation had not yet been completed. As a result, the report was not attached to the resolution sent to the ECOSOC. The assessment will now be forwarded separately to ECOSOC.

Under the CDP's recommendation, ECOSOC may endorse a postponement of one year, two years, or the full three years requested by Bangladesh. The final decision, however, will be taken through a vote at the United Nations General Assembly.

What experts say

Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue and a member of the CDP, said the extension represents a unique opportunity for Bangladesh.

"This is an exceptional opportunity for Bangladesh. The government should quickly communicate its reform commitments and establish a monitorable implementation framework. That could positively influence consideration by both ECOSOC and the UN General Assembly," he said.

He added that LDC graduation should be viewed not only as an economic issue but also as a political commitment that reflects the country's future development trajectory.

Zahid Hussain, a former lead economist at the World Bank's Dhaka office, said the CDP's recommendation was conditional on Bangladesh implementing fiscal, banking and structural reforms to diversify the economy.

"Bangladesh comfortably meets all graduation criteria even after accounting for the adverse factors identified to make the case for deferment," he said.

According to Zahid, the recommendation reflects concerns about the country's capacity to implement its Smooth Transition Strategy amid challenges arising from the Middle East crisis, disruptions to global trade and the country's political transition.

"Two things are clear. First, this is the last extension if it makes it through the next steps. Second, the period of extension will be less than three years," he said.

The economist added that while approval remains uncertain, Bangladesh's prospects of securing an extension have improved significantly.

Bangladesh's stock market extended its winning streak today (3 June), with turnover reaching an eight-month high as investors rushed into distressed and underperforming stocks amid optimism over government support measures and expectations of regulatory reforms.

The rally was driven largely by the government's decision to create a Tk60,000 crore special fund aimed at reopening closed industrial units and supporting financially troubled enterprises.

Investor sentiment was also boosted by discussions over the expected reconstitution of the Bangladesh Securities and Exchange Commission (BSEC), which many market participants believe could pave the way for reforms and help restore confidence in the capital market.

At the close of trading, the benchmark DSEX index of the Dhaka Stock Exchange (DSE) rose 35 points to settle at 5,442. The blue-chip DS30 index gained 7 points to 2,057, while the DSES Shariah Index advanced 10 points to 1,099.

Turnover on the premier bourse climbed to around Tk1,279 crore, the highest daily turnover in the past eight months. The figure was 18.43% higher than the previous trading session, reflecting a notable increase in trading activity and investor participation.

Market breadth remained firmly positive. Of the securities traded on the DSE, 243 advanced, 98 declined and 49 remained unchanged.

Investors said the newly announced government fund has raised expectations that several listed companies suffering from prolonged financial distress and operational disruptions may eventually be able to resume business activities.

As a result, buying interest concentrated on stocks seen as potential beneficiaries of the initiative.

The optimism was particularly evident among distressed and low-priced shares, which dominated the day's gainers' list.

Regent Textile Mills and Prime Finance jumped 10% each, while Sonargaon Textiles gained 9.93%. Meghna Pet Industries rose 9.89%, Bangladesh Industrial Finance advanced 9.76%, Nurani Dyeing added 9.68%, New Line Clothings climbed 9.43%, and Emerald Oil Industries gained 9.18%.

In its daily market review, EBL Securities said the benchmark index reached a three-month high, extending its rally to eight consecutive trading sessions.

The brokerage noted that investor sentiment remained upbeat amid expectations of supportive policy measures for capital market development, encouraging investors to accumulate stocks viewed as attractively valued.
According to the brokerage, buying interest remained broad-based throughout the session, helping sustain the market's upward momentum despite some mild selling pressure.

Sector-wise, the engineering sector dominated trading, accounting for 17.1% of the day's turnover, followed by textiles at 13.4% and pharmaceuticals at 12.7%.

Most sectors ended in positive territory. The services sector led the gainers with a 3.7% rise, followed by paper and printing at 3.2% and financial institutions at 2.9%. The banking sector was the only laggard, declining 0.5%.
The positive sentiment was also reflected at the Chittagong Stock Exchange (CSE). The Selective Categories Index (CSCX) rose 55.9 points, while the All Share Price Index (CASPI) gained 104.8 points.

Analysts, however, cautioned investors against making investment decisions based solely on expectations.

They noted that the sharp gains in many distressed stocks remain largely driven by sentiment rather than fundamentals, and that the longer-term impact will depend on how effectively the government's revival fund is implemented and whether struggling companies can successfully restart operations.

Even so, the latest rally suggests confidence is gradually returning to the market after a prolonged period of weakness.

The International Monetary Fund (IMF) has agreed to Bangladesh’s request for a new loan programme to replace the existing $5.5 billion arrangement, with a staff mission expected to visit Dhaka soon to begin discussions.

In a statement issued yesterday, the international lender said a final decision on the new programme would require approval from its executive board.

“Any new arrangement would need to be based on Bangladesh’s balance-of-payments needs and strong policy commitments anchored by a credible reform agenda, and would be subject to the IMF’s policies and Executive Board approval,” Ivo Krznar, IMF mission chief for Bangladesh, said in the statement.

IMF staff are engaging with the Bangladeshi authorities on their reform agenda and policy priorities as part of the fund’s consideration of possible next steps, he said.

Krznar said the upcoming staff visit would allow the IMF to assess recent economic developments, engage with authorities on policy priorities, and evaluate the outlook and reform challenges.

“Discussions about the parameters of a potential new IMF-supported programme -- including its size and related reform commitments -- would take place in the context of a subsequent program negotiation mission,” he added.

The latest development came after a virtual meeting on May 21 between Finance and Planning Minister Amir Khosru Mahmud Chowdhury and IMF Deputy Managing Director Nigel Clarke.

The two sides discussed Bangladesh’s macroeconomic situation, progress under the ongoing programme, and prospects for future cooperation.

On May 25, the finance minister said the government and the IMF had agreed to a new three-year programme to replace the existing package.

The IMF approved $4.5 billion for Bangladesh in January 2023 under three facilities -- the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF).

The package was expanded by $800 million in May last year under the interim government, bringing the total to $5.5 billion. Bangladesh has so far received $3.8 billion across five tranches.

The sixth tranche has been pending since November last year, when the IMF suspended discussions and decided to resume talks with the new government after the February election.

Under the previous schedule, the fifth and sixth tranches – together worth $1.3 billion -- were due by June, with a final tranche expected in December.

Discussions on a replacement programme began during the IMF-World Bank Spring Meetings in April. The lender signalled at the time that no further tranches would be released without visible progress on economic reforms. Virtual talks have since continued weekly over the proposed loan amount and accompanying reform conditions.

While noting that the current arrangements have provided an important policy anchor during a very difficult period, Krznar acknowledged that the macroeconomic and political context had changed substantially since it was approved in 2023.

Authorities now face a more complex set of challenges. Banking-sector weaknesses and low revenue mobilisation, he said, underscored the need for a renewed and sustained reform effort.

“The IMF remains a committed partner to Bangladesh in its efforts to secure lasting macroeconomic and financial stability, strengthen resilience, and support strong, inclusive growth,” Krznar said.

The Trump administration on Tuesday (2 June) proposed imposing additional duties of 10% or ​12.5% on imports from 60 economies after determining that their failure to curb trade in ‌goods made with forced labour is unreasonable and restricts US commerce.

The proposal from the US Trade Representative's office (USTR) is the latest finding from a Section 301 unfair trade practices investigation to be released as the Trump administration seeks to ​rebuild its emergency tariffs, which were struck down by a US Supreme Court decision in ​February, Reuters reports.

The USTR said it determined that it would impose 10% duties related to ⁠the forced labour investigation on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, ​Cambodia, El Salvador, Guatemala, Malaysia, Taiwan and Britain.

The trade agency said it would impose additional duties ​of 12.5% on the remaining 45 countries that it investigated.

"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable," US Trade Representative Jamieson Greer said in a statement. "This creates ​a dynamic where American workers are forced to compete globally on an uneven playing field."

Reacting to the news, Fazlee Shamim Ehsan, executive president of BKMEA and president of the Employers Federation of Bangladesh, told TBS, "There is no justification for imposing this new tariff on Bangladesh, as the country is not among those accused of using forced labour.

"They are trying to use tariffs as a tool. This will ultimately harm the free market economy and the global economy."

The USTR said ​it was also proposing a textile mechanism that would allow for a certain volume of apparel and textile imports ‌to enter the US at a reduced tariff rate, though the duties and volumes were not disclosed, according to the Reuters report.

The announcement comes ahead of the 24 July expiration of a 10% temporary tariff imposed by the Trump administration on 10 February, the day the Supreme Court struck down US President Donald Trump's tariffs under the International ​Economic Emergency Powers Act.

The trade agency ​is also expected to soon unveil the findings of another major Section ​301 probe into ⁠the buildup of excess industrial capacity in 16 trading partners, including China.

The USTR said it would accept public comments on the proposed tariffs and other remedies through 6 July, with a public ​hearing scheduled for 7 July.

Dr Mohammad Abdur Razzaque, the chairman of Research and Policy Integration for Development - RAPID), told TBS, "It is unfortunate that a matter as universally important as the eradication of forced labour is being addressed through a unilateral trade investigation. This approach of the US appears to establish a new benchmark not grounded in any widely accepted international legal obligation."

Bangladesh has long supported international efforts to eliminate forced labour and remains committed to strengthening labour standards and enforcement, he mentioned.

"However, the present USTR proposal raises important conceptual, legal and practical questions that warrant careful consideration, particularly given its potential implications for developing countries and for the broader rules-based trading system," Razzaque added.

Bangladesh should support the objective but challenge the conceptual basis of the USTR framework, he said, adding, there is an important distinction between prohibiting forced labour itself, which is widely recognised under ILO conventions and domestic legal systems, and imposing a dedicated border measure that bans imports allegedly linked to forced labour. Bangladesh can argue that the latter represents one regulatory instrument among several and that its absence should not automatically be regarded as an unreasonable trade practice.

"Bangladesh should pursue a dual-track diplomatic strategy. On one track, we should work with other affected economies, including developing and advanced countries, to argue for proportionality, recognition of alternative regulatory approaches through international consensus, adequate transition periods, etc.

"On the other track, Bangladesh should maintain close bilateral engagement with Washington and present a credible domestic reform roadmap. Such a roadmap could include legal review, customs enforcement improvements, supply-chain due diligence measures, labour-inspection strengthening, and institutional coordination," Razzaque further said.

Bangladesh needs to project itself as reform-oriented and cooperative while avoiding unnecessary concessions or confrontation, he opined.

"It has been a matter of concern that the USTR proposal reflects a growing tendency to use tariff threats to advance regulatory norms that have not been established through multilateral agreement. While combating forced labour is a legitimate and widely shared objective, making market access conditional on a specific US-preferred regulatory model risks weakening the MFN-based trading system and further fragmenting global trade governance," Razzaque concluded.

India and the United States are “about 99 percent” done with the first tranche of a trade deal, the commerce minister said, as a US delegation began talks in New Delhi on Tuesday.

The delegation, led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, is holding three days of talks with Indian trade officials, as the two sides seek to close negotiations.

“About 99 percent of the issues have been settled,” Indian commerce minister Piyush Goyal told reporters in Delhi late Monday.

The two countries reached an initial understanding for the trade deal in February, but negotiations slowed after President Donald Trump’s sweeping tariff measures were struck down by the US Supreme Court.

After the court order, the Trump administration launched investigations into unfair trade practices against several countries, including India, while imposing a blanket 10 percent tariff.

Goyal said negotiators were examining how recent legal changes in the United States should be reflected in the final text of the agreement.

“I am fully confident that we will conclude and sign the first tranche of the bilateral trade agreement with the United States,” Goyal said, adding that discussions would then continue on a broader and more comprehensive pact.

“Discussions are continuing on minor details, essentially the commas and full stops.”

Last week, US ambassador Sergio Gor said he expected the interim trade deal to be signed “in the next few weeks”.

Washington and New Delhi have set a target of boosting bilateral trade to $500 billion by 2030, holding multiple rounds of negotiations since March to resolve market access and tariff disputes.

India says the deal protects its sensitive dairy and agricultural products while opening a $30 trillion market for exporters.

The factory has remained closed for 24 years since 2002, while losses have continued to mount year after year. There is also no publicly disclosed information indicating that production will resume anytime soon.

Despite the company's deteriorating financial condition, Meghna PET Industries' recent share price tells a completely different story.

Over the past three months, the company's stock has surged by nearly 245%, raising the eyebrows of market insiders.

Meghna PET owns and operates an industrial plant for processing of integral mineral water, PET bottle manufacturing and filling of edible oil and selling of mineral water and edible oil.

In the fiscal 2024-25, it incurred a loss of Tk4.40 crore with a per-share loss of Tk2.75, and did not recommend any dividends for its shareholders.

According to data of the Dhaka Stock Exchange, in March, its share price was Tk24 apiece, which gradually rose to Tk82.9 yesterday.

Trading in the stock remained halted for the past two consecutive sessions. Although there were buyers at the maximum daily price limit, no sellers were available, the data showed.

Despite the sharp surge in the share price of the closed company, the lack of action from regulatory authorities such as the Bangladesh Securities and Exchange Commission and the DSE has raised questions among market participants.

A similar scenario is also seen in the case of Meghna Condensed Milk. The company has remained out of production since December 2021.

Its retained loss as of June 2024 stood at Tk145 crore, surpassing its total assets of Tk140 crore.

However, its stock has witnessed sharp price rallies in recent months, raising concerns among market participants over the disconnect between the company's fundamentals and its market performance.

On 18 January, Meghna Condensed Milk's share price stood at Tk12.1, while it closed at Tk46.1 yesterday, marking a 280% increase over the period.

Market insiders said a group of investors had targeted low-paid-up capital companies such as Meghna PET Industries and Meghna Condensed Milk because their relatively small number of outstanding shares makes it easier to drive up prices.

They alleged that some influential investors were spreading rumours about potential ownership changes and fresh investment that could restart operations at full capacity, despite production remaining suspended.

To inform the investors, the DSE published a list of closed firms in January this year.

An official at the DSE, seeking anonymity, told TBS, "We can aware investors only about informing the status of the company. In line with the motto, we have already published a list of non-performing companies. Investors should invest at their own risk."

Al-Amin, a professor in the Department of Accounting at the University of Dhaka, criticised the apparent lack of regulatory action.

"The share price of a company that has been closed for 24 years is increasing in front of everyone's eyes. This clearly indicates that some group in the market is playing a role in driving up the price of this share," he said.

Prof Al-Amin added, "Even though the share price of a non-producing company is increasing, neither the BSEC nor the DSE is taking any initiative. There is negligence on the part of the regulatory bodies in investigating why the price is rising and taking necessary measures."

Questioning the adequacy of the exchange's response, he said it was important to consider whether the responsibility of regulators ended with the publication of a list of closed companies.

"In cases of companies with abnormal price hikes, the stock exchange or the commission can take action in the interest of investors, yet they are doing nothing," he added.

Attempts to obtain comments from BSEC spokesperson Abul Kalam were unsuccessful, as he did not respond to telephone calls.

The United Nations Committee for Development Policy (UN CDP) has recommended that Bangladesh’s Least Developed Country (LDC) graduation be postponed until November 24, 2029, putting the country in good standing to receive preferential trade benefits for three more years.

“The extension of the preparatory period should not be viewed as an opportunity to delay reforms -- rather, it should serve as a catalyst for accelerating them,” the CDP said in its critical assessment report.

Bangladesh has exceeded the graduation thresholds by a significant margin under all three LDC graduation criteria and faces a very low risk of falling below these thresholds in the near to medium term.

But the recent crisis in the Middle East, uncertainties in global energy and supply chains, changes in the international trading environment, and global challenges could affect the country’s graduation preparedness and transition process, the CDP said.

An extension of the preparatory period would provide Bangladesh with more time to better assess the implications of the current global situation, identify priority actions and prepare adequately for the post-graduation landscape, including the loss of certain market preferences and international support measures.

Bangladesh formally requested the CDP to extend the preparatory period on February 18, with Prime Minister Tarique Rahman writing to the UN Secretary-General seeking his personal support on the matter.

The extension could be approved at the United Nations General Assembly (UNGA) in September.

The UN CDP’s positive note on the extension of the graduation of Bangladesh will be sent to the UNGA through the United Nations Economic and Social Council (UN ECOSOC) for its final approval by the member countries.

The UN CDP’s positive recommendations made Bangladesh’s plea of extension morally strong in the pathway for the UNGA’s final approval, said Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID).

Now, Bangladesh will have to maintain better engagement with the major trading partners such as India, China and the EU so that the extension is approved by the member countries in the upcoming UNGA.

The reason being Bangladesh is the highest user of the LDC benefits given by the developed and developing nations.

Bangladesh alone utilises 67 percent of the benefits given to all 44 LDCs by the other countries and 73 percent of its exports export is LDC induced, he said.

Different studies suggest that Bangladesh may lose $17.5 billion in export earnings in a year because of LDC graduation.

If Bangladesh gets the final approval at the UNGA, the country will enjoy the preferential trade benefits for three more years.

The CDP’s recommendation is a positive sign for Bangladesh, said Mostafa Abid Khan, a former member of the Bangladesh Trade and Tariff Commission.

However, CDP Chair José Antonio Ocampo emphasised that Bangladesh would need to make significant progress in implementing key domestic reforms to address its existing structural vulnerabilities during this extended period.

In its report, the CDP underscored the importance of continued support from the international community for Bangladesh during both the preparatory period and the post-graduation phase.

Such support includes concessional financing, appropriate extension of LDC-specific International Support Measures, technical assistance and enhanced capacity for trade negotiations.

The report highlighted the importance of domestic reforms, particularly in ensuring financial sector stability, increasing tax revenue, strengthening domestic resource mobilisation, enhancing productive capacities, promoting economic diversification and preparing the private sector for graduation.

The government firmly believes that, with the support of the international community and the successful implementation of ongoing reforms, Bangladesh will be able to achieve a smooth, sustainable and successful graduation from the LDC category, said a statement from the Economic Relations Division.

The United States has proposed additional tariffs on imports from 60 countries, including Bangladesh, after concluding that their efforts to curb trade in goods produced with forced labour are inadequate and restrict US commerce.

The proposal was announced on Tuesday by the Office of the United States Trade Representative (USTR) following Section 301 investigations launched earlier this year into forced labour enforcement among major US trading partners.

US Trade Representative Jamieson Greer said the failure of trading partners to address imports linked to forced labour creates an uneven playing field for American workers.“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable,” Greer said, adding that governments must do more to prevent global trade from encouraging forced labour practices.

The USTR identified 54 economies, including Bangladesh, India, China, Japan, the United Kingdom, Vietnam and Thailand, as failing to impose and effectively enforce bans on the importation of goods produced with forced labour. Another six economies, including Canada, Mexico and Pakistan, were cited for failing to effectively enforce existing prohibitions.Under the proposed framework, countries with partial forced labour import bans or reciprocal trade arrangements with the US would face an additional 10 percent tariff. Countries without such arrangements could face a higher 12.5 percent duty on exports to the United States, according to the proposal.The levies won’t go into effect immediately and are subject to a public comment and review period before implementation, which could result in changes before any duties are codified. Written comments are due to be submitted by July 6, and a Section 301 panel is expected to convene public hearings beginning on July 7, according to the notice.

The action forms part of a broader Section 301 trade strategy that could lead to country-specific tariffs replacing temporary measures due to expire later this year.The USTR also proposed a separate textile mechanism that would allow a specified volume of apparel and textile imports from certain economies to enter the US at reduced Section 301 tariff rates. Details of eligibility and quota levels have not yet been finalised.

The Trump administration has proposed a new ​punitive tariff of 25% on many imports from Brazil, after deciding its practices were unfair on a range of issues from digital trade to ‌illegal deforestation, top trade official Jamieson Greer said late on Monday.

The measures, under the Section 301 trade statute, cover areas such as electronic payment services, preferential tariffs, intellectual property protection and ethanol market access as well, the Office of the United States Trade Representative said.

The proposed new tariff, subject to public consultation ahead of a July 15 deadline, would exclude some items, such as beef, coffee, rare earths, other metals, energy ​and aircraft parts.

The USTR said its unfair trade practices investigation into Brazil, started last year under Section 301 of the Trade Act of 1974, had found practices ​that "are unreasonable and burden or restrict US commerce," opening the door for a punitive tariff.

Greer, speaking on CNBC, called the Brazil action "quite ⁠nuanced" because of the broad exemptions. He said that the trade agency will release the findings of several more Section 301 unfair trade practices investigations in coming weeks, adding ​that substantial tariffs were needed to correct a "giant" US trade deficit.

Brazil's Foreign Ministry did not immediately respond to a request for comment.

Two Brazilian officials familiar with the matter said the ​justifications for a new US tariff ignored many of the arguments presented by Brasilia in recent months, suggesting the motives were political rather than technical.

Despite a White House visit last month by President Luiz Inacio Lula da Silva, bilateral relations have turned chilly.

US Secretary of State Marco Rubio designated Brazil's two biggest criminal gangs as terrorist organizations over objections from Brasilia, opening the door for more aggressive interventions in the ​country.

Days earlier, Lula's main rival in the October election, Senator Flavio Bolsonaro, had argued in favor of the terrorist label during a tour of Washington that included meetings with Rubio, ​Vice President JD Vance and President Donald Trump.

"I expressly asked President Trump not to tariff our companies," Bolsonaro wrote on X on Tuesday. "Tariffs are not the solution."

Tariff replacements

The USTR's proposed new tariff would ‌partially replace ⁠a tariff of 50% on many Brazilian goods imposed last year by Trump, with 40% as a punishment for Brazil's prosecution of the Brazilian senator's father, former President Jair Bolsonaro.

The US Supreme Court struck down those duties in February.

In a statement, Greer said he launched the Section 301 investigation to tackle "longstanding and pervasive US concerns with certain of Brazil's trade policies and practices."

Despite recent engagement with Brazilian President Inacio Lula da Silva and his cabinet, Greer said the United States and Brazil "continue to have substantial differences in resolving issues identified in ​this investigation."

6 July public hearing

The trade agency ​invited comment on the proposed tariffs through 1 July, with a public hearing set for 6 July. It faces a 15 July deadline for taking "responsive action" in the Section 301 investigation.

Trump used the same statute to impose sweeping tariffs on Chinese goods during his first term.

The USTR has several other open ​Section 301 investigations that are expected to lead to new duties.

Among these are one covering excess industrial capacity in China and 15 ​other trading partners, as ⁠well as one into enforcement of forced labor bans in 60 countries.

The agency opened a new investigation on Friday into Vietnam's intellectual property practices.

Regarding its Brazil findings, the USTR said the proposed new 25% tariff would not apply to Brazilian imports subject to national security-related tariffs under Section 232 of the Trade Expansion Act of 1962.

These include 50% duties on steel, aluminum and copper ⁠and 25% ​duties on finished products made from those metals, as well as a 25% duty on motor vehicles and ​auto parts.

The USTR said products exempted from the proposed 25% tariffs included many fruits and nuts, crude oil and petroleum products, pharmaceutical compounds, organic chemicals and fertilizers.

These are in addition to beef, coffee, rare earths, certain other ​metals and ores and Brazilian aircraft and aircraft parts.

In the first days of March, Petrobangla went looking for an emergency cargo of liquefied natural gas (LNG), and no seller would bid. A second tender drew nothing either. Only by negotiating one-to-one did it secure two cargoes, one at $28.28 per million British thermal units against $9.99 in December. The war that closed the Strait of Hormuz exposed something harder to fix than price: the way Bangladesh buys gas.

The budget the finance minister presents on June 11 will answer that with money. He has told parliament the war will require roughly Tk 36,000 crore in extra power, energy and LNG subsidies between March and June. The LNG share alone could reach $1.07 billion in a single quarter, against the Tk 9,000 crore set aside for the whole year. The cheque pays the bill. It does not change why the bill keeps coming.

Bangladesh believed it had two kinds of protection: long-term contracts for steady supply and the spot market as a backup. The war showed they were the same protection in two guises. Its contracted gas comes from QatarEnergy, Oman’s OQ Trading and the American firm Excelerate, and its spot cargoes come from the same region through the same strait. When Qatar declared force majeure in early March, the other suppliers followed because their gas originated in the same place. Qatar alone was due to ship about 40 of this year’s 115 cargoes and Oman another 16, so two safety nets turned out to be a single bet.

The Excelerate arrangement makes the point. While it appears to diversify supply, the gas still originates in Qatar and passes through the same route. When Qatar stopped, the apparent diversification disappeared.

Look at this the way a fund manager would. Bangladesh has concentrated almost everything in one price formula, one route and one chokepoint. No one would run an investment portfolio that way. The country does not mainly have a price problem to subsidise; it has a portfolio nobody designed.

India shows the alternative. Its Qatari cargoes were affected too, but over years it spread purchases across different price formulas and sea routes. Some gas is priced off the American benchmark Henry Hub, near $3, while Asian spot prices surged past $20, and it travels across the Atlantic, far from Hormuz.

Fahmida Khatun has rightly argued for a portfolio approach with caps on any single source. The next step is recognising that buying from more countries is not the same as buying on more price formulas or routes. It is the latter that matters when a key shipping lane closes.

The deeper fixes are real, and the budget should fund them: more domestic gas, more solar and less waste. But none of that changes the cargoes the country must buy next month. The tool is already in hand. In May, the World Bank doubled its energy facility for Bangladesh to $700 million, allowing Petrobangla to finance LNG purchases through letters of credit and short-term credit lines. Right now, it is being used only to pay this year’s premium.

Used by the finance ministry and Petrobangla to anchor a standing framework, it could support three rules: buy a set share of gas on price formulas other than oil so one spike cannot move the whole bill; buy a set share through routes that avoid Hormuz so one closed strait cannot halt supply; and maintain a cleared list of sellers, with the exit clauses this crisis showed were missing, before the next shock.

A budget that only raises the subsidy treats the symptom, not the cause. Bangladesh has been buying gas like a price-taker. It can start buying like an investor who spreads risk, so no single shock can corner the country.

India and Oman today (1 June) enforced a bilateral free trade accord which offers zero-duty access for 99.38% of India's exports to the Persian Gulf country, the Indian commerce ministry said.

All zero-duty concessions under the bilateral Comprehensive Economic Partnership Agreement (CEPA) come into effect immediately, providing certainty and competitiveness to Indian exporters, the ministry said in a statement.

Earlier, under the Most Favoured Nation regime, only 15.33% of India's exports entered Oman duty-free. With CEPA, Indian exporters gain substantial price competitiveness in Oman's nearly $28 billion import market.

Speaking on the occasion, Indian Commerce Minister Piyush Goyal said that with 99.38% of India's exports receiving duty-free access, the CEPA, signed in December last year, unlocks new opportunities for Indian exporters and professionals.

India, in turn, has offered tariff liberalisation on 77.79% of tariff lines covering 94.81% of imports from Oman by value, while maintaining strong safeguards for sensitive sectors.

Products including dairy products, cereals, fruits, vegetables, edible oils, oilseeds, rubber, leather, spices and key agricultural products have been kept out of CEPA in order to protect India's domestic industries, said the statement.

India is only the second country, after the United States, to secure a comprehensive bilateral trade pact with Oman.

The CEPA will strengthen India's dominance in fisheries, meat, eggs, marine products, and processed foods with duty elimination.

Oman offers a gateway to the Gulf Cooperation Council countries and East Africa and Oman's logistics hubs at Sohar, Duqm, and Salalah are expected to amplify India's regional trade connectivity.

To mark the entry into force, the first consignments availing preferential tariff benefits under the agreement, including agriculture and gems and jewellery exports from Mumbai, Kolkata, and Chennai, were flagged off.

Oman is India's second-largest trading partner in the Gulf region and serves as a strategic gateway to the wider GCC market through its advanced port infrastructure.

Bilateral trade between India and Oman reached $11.18 billion in FY2025-26, up from $10.61 billion in FY2024-25.

All marine products, including shrimp, fish, and cuttlefish, will get immediate duty-free access, replacing earlier import duties of up to 5%.

Oman's marine imports stood at $35.3 million in 2025, while India's exports accounted for only $10 million, indicating substantial untapped potential.

Import duties of up to 5% on gems and jewellery have been eliminated from day one.

Indian exporters gain a structural price advantage over competitors from Italy, Turkey, Thailand, and China.

Oman's total gems and jewellery import market is $1.07 billion annually. India's exports to Oman in this sector stood at $25.78 million in 2025, comprising $18.48 million in polished natural diamonds and $6.67 million in gold jewellery.

It is projected that exports could increase sixfold to $150 million within three years.

Clusters in Surat (diamonds), Jaipur (gemstones), Mumbai, Kolkata, and Chennai are positioned to capture this growth.

India is Oman's second-largest agricultural supplier with a 17.8% share in Omani imports. Duty elimination strengthens India's competitiveness in products such as honey, condiments, cashews, basmati rice, butter and sweet biscuits.

India currently accounts for over 94% of Oman's bovine meat imports and over 98% of fresh egg imports, making Oman one of India's most important agricultural export destinations in the Gulf region.

For more than a decade, the unveiling of the national budget has triggered a familiar chorus of reactions. Headlines routinely describe it as a “big budget”, a “massive budget” or a “debt-driven budget”, as if its size alone determines its significance.

Politicians, business leaders and ordinary citizens have all weighed in with sharp quips. Some dismiss it as nothing more than a “numbers game”. Others argue that the headline figure looks “impressive” but says “little” about the government’s actual spending capacity.

Yet a comparison with neighbouring countries tells a different story.

In terms of government expenditure as a share of gross domestic product (GDP), which is the value of all goods and services the country produces in a year, Bangladesh has one of the lowest ratios in South Asia and among countries scheduled to graduate from the least developed country club.

In simple terms, Bangladesh’s budget is like a small water tank serving a rapidly growing city.

The culprit? Mainly weak revenue collection. Relative to the size of its economy, Bangladesh’s tax take is among the lowest in the world.

But why does budget size matter in the first place?

Basically, government expenditure finances essential public services such as healthcare, education, law enforcement and public administration. Higher spending on healthcare and education generally benefits ordinary and marginalised people the most.

In 2024, Bangladesh’s government expenditure stood at just 12.03 percent of GDP, according to International Monetary Fund (IMF) data.

In the same year, government expenditure accounted for 28.38 percent of GDP in India, 19.47 percent in Pakistan and 19.32 percent in Sri Lanka. The ratio was 27.13 percent in Bhutan, 17.26 percent in Cambodia, 23 percent in Hong Kong and 16.84 percent in Indonesia.

In neighbouring Myanmar, government expenditure in 2024 amounted to 23.4 percent of GDP. Among countries graduating from the LDC category, the ratio in that year stood at 33.55 percent in Senegal and 35.81 percent in the Solomon Islands.

Globally, only a small number of fragile economies, including Ethiopia, Haiti, Sudan and Yemen, recorded lower government expenditure-to-GDP ratios than Bangladesh.

According to Fahmida Khatun, executive director of local think tank Centre for Policy Dialogue (CPD), the country’s limited public spending reflects weak revenue mobilisation rather than fiscal restraint. It is also linked to longstanding weaknesses in project implementation.

“But the main reason behind low government expenditure is low revenue collection,” she said.

The National Board of Revenue (NBR) collected Tk 370,874 crore in fiscal year 2024-25, falling Tk 92,626 crore short of its revised target. The original target had been Tk 480,000 crore before being reduced by Tk 18,500 crore.

As a result, the tax-to-GDP ratio dropped to just 6.8 percent, one of the lowest among countries at a similar stage of development.

Fahmida attributed the poor revenue performance to institutional weaknesses, limited administrative capacity within the revenue board and governance shortcomings.

She also pointed out that even the resources collected are not always used efficiently. Delays, cost overruns and implementation bottlenecks often prevent public spending from delivering the expected economic benefits.

The problem extends to foreign financing as well. Bangladesh has access to substantial external funding. But many foreign-assisted projects suffer from implementation delays, reducing the country’s ability to utilise those foreign resources.

The consequences are far-reaching.

Government spending supports essential services, builds infrastructure and strengthens social protection programmes. These investments improve living standards, reduce inequality and create conditions for stronger economic growth.

Infrastructure spending is particularly important because it encourages private investment and job creation.

“If physical infrastructure does not improve, private-sector investment will not be encouraged, and economic growth may fall short of its potential,” said Fahmida.

She said higher and more efficient public spending could therefore make a substantial contribution to both economic development and social welfare.

However, increasing expenditure alone is not enough. The quality and timeliness of spending matter just as much, added the economist.

The country’s development spending has long been hampered by implementation weaknesses.

According to the Implementation Monitoring and Evaluation Division (IMED), only 41.41 percent of the revised Annual Development Programme (ADP) allocation was utilised during the first 10 months of fiscal year 2025-26.

That means the challenge is not simply the size of the budget. It is also the state’s ability to execute projects efficiently.

Oil prices trended lower on Tuesday following the previous session’s sharp gains as ​the market remained cautious about progress in US-Iran peace talks.

US President Donald Trump said on Monday talks with Iran were ‌ongoing, while Tasnim news agency reported earlier that Tehran had suspended indirect negotiations with Washington.

Brent crude futures lost 53 cents, or 0.56 percent, to $94.45 a barrel at 0649 GMT, while US West Texas Intermediate fell 56 cents, or 0.61 percent, to $91.60 a barrel.

Both benchmarks rose more than 5 percent in ​the previous session, having posted a monthly loss of more than 16 percent in May on hopes of a ​peace deal.

“While markets had hoped to move past the uncertainty amid prospects of a potential deal, nothing appears to have changed for oil as of this morning,” said Priyanka Sachdeva, senior market analyst at ​Phillip Nova.

In an interview with CNBC on Monday, Trump said he did not mind if the talks were over. But shortly ​after, he issued a social media post saying talks with Iran were continuing and told ABC News that he expected a deal to extend the ceasefire and reopen the Strait of Hormuz “over the next week”.

“The market is currently focused on whether there’s any concrete progress or setbacks ​in US-Iran negotiations, the tone and substance of statements from both sides (particularly Iran’s threats regarding the Strait of Hormuz), ​and actual physical tanker movements through the waterway,” said Tim Waterer, chief market analyst at KCM Trade.

The status of the US-Iran negotiations at ‌any given point will ultimately determine whether the current risk premium stays embedded in oil prices or starts to unwind, Waterer added.

Lebanon on Monday announced a partial ceasefire between Hezbollah and Israel, in what would amount to a limited de-escalation of a conflict that has inflamed the broader war with Iran.

Iran has effectively halted nearly all non-Iranian shipping into and out of the ​Gulf since the war began, ​choking off about a fifth of global oil and liquefied natural gas flows and driving prices up by 50 percent or more.

The government has decided to introduce a 0.25% fee on guarantees issued against loans taken by state-owned, autonomous, and government-controlled entities.

In a circular issued by the Ministry of Finance today (2 June), it stated that the fee will apply to both local and foreign loans backed by state guarantees.

According to the circular, the Finance Division, under the authority of the Public Debt Act 2022 and the State Guarantee or Counter-Guarantee Policy 2014, will impose a one-time guarantee fee on loans taken under sovereign backing. The fee must be deposited into the government treasury through the designated payment system.

A Finance Division official told The Business Standard that the measure applies when state-owned companies, public entities, or joint ventures seek loans from domestic or international sources that require government guarantees. "The move aims to discourage excessive reliance on sovereign guarantees while also increasing revenue collection."

"State-owned and autonomous institutions often rely on borrowing to finance development projects, with lenders frequently requiring government guarantees as a condition. These guarantees are issued by the Finance Division on behalf of the government," the official added.

According to the ministry, by December 2025, the government had provided guarantees worth Tk106,973 crore for various domestic and foreign loans. Of this, Tk58,383 crore was in foreign loans and Tk48,590 crore in domestic loans.

More than half of the guaranteed loans are in the power sector. Guarantees have also been extended to agriculture-related loans and to Biman Bangladesh Airlines.

The government has also guaranteed foreign borrowing by the Bangladesh Petroleum Corporation (BPC) for fuel imports, as well as agricultural loans from Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank (Rakub).

The benchmark index of the Dhaka Stock Exchange (DSE) reclaimed the 5,400-point threshold today (2 June), hitting a three-month high as a sustained seven-day winning streak gathered pace.

Investor sentiment was significantly bolstered by fresh government commitments to restructure the stock market regulator with non-political, skilled professionals.

The rally, which has added 203 points to the broad index over the last seven trading sessions, reflects a growing confidence among market participants regarding the future governance and transparency of the capital market.

The benchmark DSEX index rose by 33 points to settle at 5,406 today, its highest level since early March.

The market's upward trajectory also resulted in a substantial increase in valuation, with the total market capitalisation of the premier bourse jumping by Tk12,700 crore over the last week to reach Tk6.88 lakh crore.

Market participation saw a notable surge as daily turnover increased by 18%, crossing the prestigious thousand-crore mark to settle at Tk1,080 crore.

The primary catalyst for today's surge was a landmark announcement by the Finance and Planning Minister at an event titled "Budget 2026-27: Expectations and Reality," organised by the Economic Reporters Forum.

The minister revealed that the Bangladesh Securities and Exchange Commission (BSEC) will be fully restructured within the next two weeks, adding that a new chairman and four commissioners are being appointed through a strictly professional process, free from political influence or consultation with political parties.

Analysts believe that if the government fulfills its promise of a professionally run BSEC, the market could sustain its current momentum and attract much-needed institutional and foreign investment in the coming months.

The optimism was visible across the trading floor, with the blue-chip DS30 index inching up by 5 points to close at 2,049.

Market breadth remained strongly positive as 230 issues advanced compared to 116 that declined, while 47 remained unchanged.

Sector-wise performance was led by general insurance, which posted a 2.28% return, followed by the tannery, cement, and non-bank financial institution (NBFI) sectors. Conversely, the jute, telecommunication, and travel and leisure sectors faced minor corrections.

In terms of individual stock activity, the banking sector remained the focus of high-volume trading. Jamuna Bank, BRAC Bank, and City Bank emerged as the top traded stocks, alongside RD Food and Agni Systems.

Among the top gainers, Meghna PET and Sonargaon Textile led the chart, both surging by nearly 10%. On the other hand, BIFC and International Leasing were among the top losers as investors shifted capital away from struggling financial entities toward fundamentally stronger scrips.

The bullish sentiment extended to the Chittagong Stock Exchange, where the Selective Categories' Index (CSCX) gained 62 points to finish at 9,277, and the All Share Price Index (CASPI) jumped 110 points to reach 15,080. However, unlike the Dhaka bourse, turnover at the port city exchange saw a 42% decline, standing at Tk27.19 crore.

The Customs House, Chattogram has put 102 containers of abandoned goods up for online auction as part of efforts to reduce congestion at the country’s busiest seaport and improve operational efficiency.

According to a press release issued by the National Board of Revenue (NBR) on Monday, the goods will be auctioned through the e-Auction programme this month. The auction comprises 44 lots containing 102 containers of various products, including chemicals, machinery and spare parts, paper, freezers, generators, limestone, fabrics, transformers, quartz powder and household items.

The NBR said no reserve price has been set for the consignments, allowing bidders to compete freely.

The auction will be conducted entirely through a digital platform to ensure transparency and accountability. Interested buyers will be able to inspect the goods before submitting bids online through the customs e-Auction portal. However, bid security instruments and other required documents must be submitted physically.

The tender box for the auction will be opened at 11:00am on June 18.

According to data from the Chittagong Port Authority and the NBR, around 200,000 tonnes of imported goods stored in 8,965 containers were left abandoned at Chattogram Port between 2013 and 2025.

Importers abandon consignments for a variety of reasons, including declines in domestic prices, failure to submit original documents and obtain the required clearance permits, and unwillingness to pay fines arising from discrepancies or irregularities in import documentation.

At the start of June, following the Eid holidays, the Bangladesh Jewellers’ Association (BAJUS) has reduced the prices of gold and silver in the country’s market on Tuesday.

Price of gold fell by Tk 3,266 per bhori while silver dropped by Tk 177 per bhori.

In a statement, BAJUS said that considering overall market conditions, the price of 22-carat pure gold was reduced by Tk 3,266 per bhori to Tk 234,855.Capital Market Insights

The revised price has been effective since Tuesday morning.

According to the new rates, the market price per bhori (11.664 grams) of 21-carat gold is Tk 224,182, 18-carat gold Tk 192,164, and traditional gold Tk 156,473.

Previously, on May 25, BAJUS adjusted the gold price, raising the 22-carat gold rate by Tk 2,158 per bhori to Tk 238,121.

So far in 2026, the gold price has been revised 70 times in the country’s market, with 37 increases and 33 decreases.

Along with gold, silver prices were also reduced in the market. The price of 22-carat silver fell by Tk 117 per bhori to Tk 5,657.

Other rates include Tk 5,365 per bhori for 21-carat silver, Tk 4,607 per bhori for 18-carat silver, and Tk 3,441 per bhori for traditional silver.

In 2026, silver prices have been adjusted 41 times in the market, with 22 increases and 19 decreases.