The government has begun drafting a five-year strategic framework that targets economic growth of 6.2% in the 2026-27 fiscal year, up from a projected 5% in FY26, as it seeks to stabilise the economy and shift towards investment-led growth.

The proposed framework, presented at the first meeting of an advisory committee chaired by former planning adviser Wahiduddin Mahmud, sets out a gradual rise in growth over the following years, with targets of 7.1% in FY28, 7.5% in FY29 and 8% in FY30.

The plan also aims to increase total investment to 36.7% of gross domestic product by FY30, while reducing inflation to 5% by the period.

A projection presented at the first meeting of an advisory committee chaired by former planning adviser Wahiduddin Mahmud forecast a gradual depreciation of the taka against the US dollar over the current fiscal year and the following four years.

According to the General Economics Division, the exchange rate could rise to Tk126.3 per dollar in the current 2025-26 fiscal year, followed by Tk131 in FY27, Tk134.9 in FY28, Tk138 in FY29 and Tk140 in FY30.

The government plans to introduce a 180-day action plan covering exchange rate rationalisation, stabilisation of energy supply and fast-track reforms to business licensing.

A one-year programme will include restructuring of the financial sector, creation of an integrated social protection platform and expansion of financing for small and medium-sized enterprises.

Over the five-year period, the government intends to pursue industrial diversification, universal social protection and regional economic transformation.

Speaking yesterday (15 April), Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir said the initial measures under the plan would be implemented up to FY30 and would focus on economic recovery and stability.

"The rehabilitation process is also expected to be completed within the next year," he said.

Documents presented at the meeting showed that the framework seeks to raise capital productivity, create nearly one crore jobs across different sectors and increase revenue collection to 10% of GDP.

The first five-year plan of the BNP government will include proposals to develop Chattogram as the country's commercial capital, establish a pension fund for the private sector, introduce unemployment benefits and provide interest-free loans to small enterprises and cottage industries.

The plan also proposes waiving agricultural loans of up to Tk10,000 taken from non-governmental organisations.

The government has set a longer-term target of building a $1 trillion economy by 2034 and increasing foreign investment to 2.5% of GDP.

The framework identifies information and communication technology, the blue economy and renewable energy as the main drivers of future growth.

It aims to ensure that at least 20% of total electricity generation comes from renewable sources by FY30.

The plan also includes a target of creating around one crore jobs and recruiting five lakh people into government service through merit-based appointments.

In the social sector, the government plans to introduce a "Family Card" programme for around four crore vulnerable households.

It also intends to raise public spending on health and education gradually to 5% of GDP.

The proposed framework includes a number of governance reforms, including a 10-year limit on the tenure of a prime minister, the introduction of a bicameral parliament with an upper chamber of 100 members and the restoration of a neutral caretaker government system.

The plan targets an increase in nominal GDP to $742.57 billion by FY30 from $495.17 billion at present, as part of the government's election pledge to build a $1 trillion economy by 2034.

After the meeting, Titumir said the new framework would move away from what he described as earlier "detached and number-focused" plans and would instead emphasise practical strategies aligned with current economic conditions and future challenges.

He said accountability and a clear implementation roadmap would be among the defining features of the new strategy.

State Minister for Planning Zonayed Saki said the country is facing a fragile economic situation and that the government had inherited a weak macroeconomic structure. "The goal is to move from recovery to long-term prosperity."

He added that there had been shortcomings in the implementation of earlier development plans and that the government had already begun assessing the current situation, reviewing past outcomes and reassessing ongoing projects.

GED member Monjur Ahmed said the government had initially considered adopting a two-year recovery programme but later expanded the initiative into a comprehensive five-year strategy after the formation of the elected government.

He said a draft would be prepared within two months, followed by consultations with stakeholders.

The final document is expected to be completed within the following two to three months before the implementation phase begins.

Uber has committed more than $10 billion to buying thousands of autonomous vehicles and taking stakes in their developers, breaking from its asset-light "gig economy" business model to avoid disruption from robotaxis, the Financial Times reported on Wednesday.

Reuters could not immediately verify the report. Uber did not immediately respond to a Reuters request for comment.

Uber is positioning itself as a marketplace for multiple robotaxi operators, and has partnered across much of the autonomous vehicle industry, including with Baidu, Rivian and Lucid, and has outlined plans to launch robotaxi services in at least 28 cities by 2028.

These deals put Uber on track to invest more than $2.5 billion in equity stakes and spend over $7.5 billion on robotaxi fleets in the next few years, FT reported, citing its calculations based on analyst estimates and people familiar with Uber's deals. The agreements are contingent on its partners hitting certain deployment milestones.

Interest in driverless taxis has surged in recent months after years of missed promises, with artificial intelligence and tech partnerships offering hopes of solving complex traffic scenarios faster and mitigating high costs.

Japanese Prime Minister Sanae Takaichi, after holding a video conference with leaders from Southeast Asia, told reporters that the assistance, dubbed "Power Asia," is aimed at providing loans needed to secure crude oil, petroleum products, and to maintain the supply chain in an emergency response to help hard-hit nations.

The fund also aims to expand an oil reserve system within Asia, diversify energy, and promote energy conservation and industrial advancement, Takaichi said.

Japan, which imports petroleum-related products such as medical supplies from Southeast Asia, is increasingly worried that the region's oil supply shortages would affect the Japanese economy.

The fund is one year's worth of oil imports for the Association of Southeast Asian Nations member countries, or about 1.2 billion barrels, Takaichi said. The assistance is not meant to just provide oil, but for Asian nations to support each other.

The US military began a blockade of Iran's ports, angering Tehran and adding uncertainty around the crucial waterway, although hopes for dialogue to end the war provided some relief to ​oil markets, where benchmark prices fell below $100 on Tuesday (14 April).

After a breakdown of weekend talks in Islamabad between the two adversaries, a US official said there was continued engagement and ‌forward motion on trying to get to an agreement. Pakistani Prime Minister Shehbaz Sharif also said efforts were still underway to resolve the conflict.

US President Donald Trump said Iran had been in touch on Monday and wanted to make a deal but that he would not sanction any agreement allowing Tehran to have a nuclear weapon.

Since the United States and Israel began the war on 28 February, Iran effectively shut the Strait of Hormuz to all vessels except its own, saying passage ​would be permitted only under Iranian control and subject to a fee.

The fallout has been widespread, since nearly a fifth of the world's oil and gas supplies flowed through the narrow ​waterway before the start of the conflict.

Trump has said Washington would block Iranian vessels and any ships that paid such tolls and that any Iranian "fast-attack" ships ⁠that went near the blockade would be eliminated. Tehran has threatened to hit naval ships going through the strait and to retaliate against its Gulf neighbours' ports.

Shipping data on LSEG showed Chinese-owned oil-and-chemicals tanker Rich ​Starry passed through the strait on Tuesday - the first since the US blockade began at 10am EDT (1400GMT) on Monday. The vessel, which departed Sharjah anchorage off the coast of Dubai on Monday heading for China, had ​earlier turned back minutes after approaching the strait.

The US's blockade has further clouded the outlook for global energy security and the supply of a vast array of goods that rely on petroleum, and has little, if any, international backing.

Nato allies including Britain and France said they would not be drawn into the conflict by taking part in the blockade, stressing instead the need to reopen the waterway.

Despite the breakdown of talks between the US and Iran on Sunday, Vice President JD Vance, who ​led the US delegation, told Fox News on Monday the US "made a lot of progress" by communicating to Tehran where the US "could make some accommodation" and where it would remain inflexible.

He said Trump was adamant ​that any enriched nuclear material must be removed from Iran and a mechanism must be established to verify that Iran is not developing nuclear weapons.

Tehran "moved in our direction, which is why I think we would say that we had ‌some good ⁠signs, but they didn't move far enough," Vance said, without disclosing details.

Ceasefire under strain

The ceasefire that halted six weeks of US-Israeli airstrikes and retaliatory fire from Iran across the Gulf looked in jeopardy, with only a week left to run.

The US military's Central Command said the blockade would be "enforced impartially against vessels of all nations" entering or leaving Iranian ports in the Gulf and Gulf of Oman. It would not impede neutral transit passage through the Strait of Hormuz to or from non-Iranian destinations, it said in a note to seafarers seen by Reuters.

An Iranian military spokesperson called any US restrictions on international shipping "piracy," warning that if Iranian ports were threatened, ​no port in the Gulf or Gulf of ​Oman would be secure. Any military vessels approaching ⁠the strait would violate the ceasefire, Iran's Revolutionary Guards said.

Trump said Iran's navy had been "completely obliterated" during the war, adding that only a small number of "fast-attack ships" remained.

"Warning: If any of these ships come anywhere close to our BLOCKADE, they will be immediately ELIMINATED, using the same system of kill that we use against ​the drug dealers on boats at Sea. It is quick and brutal," Trump said on social media.

He was apparently referring to the US strikes carried ​out against suspected drug boats ⁠in the Caribbean and Pacific. The strikes, which began in September, killed more than 160 people. The US military has not provided evidence that the vessels were ferrying drugs.

Lebanon faces attacks

With the war unpopular at home and rising energy prices causing political blowback, Trump paused the US-Israeli bombing campaign last week after threatening to destroy Iran's "whole civilisation" unless it reopened the strait.

In a letter to the United Nations, Iran's UN delegation on Monday asked for reparations from ⁠Saudi Arabia, ​the UAE, Bahrain, Qatar and Jordan, alleging they have allowed their territory to be used in the US-Israeli war against Iran.

Israel has ​continued to bombard Lebanon and on Monday troops launched an attack it said was intended to seize a key south Lebanon town from Iran-backed Hezbollah. The Israeli military said on Tuesday that an Israeli soldier was killed and three reservists were wounded during combat in southern Lebanon.

Israel ​and the US have said the campaign against Hezbollah was not part of the ceasefire, while Iran has insisted it is.

With Islamic banking now commanding 30% of Bangladesh's market, the shift from interest-based to asset-backed models is accelerating. Bank Asia is at the forefront, boasting a 70% deposit-investment ratio and a portfolio where Musharakah-based financing – true risk-sharing – hits 50%.

In a recent conversation with The Business Standard, the Bank's AMD ANM Mahfuz discusses the sector's trajectory and evolving strategic priorities

What is your outlook for the Islamic banking sector in the near future?

Islamic banking in Bangladesh has experienced remarkable growth since its introduction in 1983.

The sector has built deep public trust by aligning financial services with ethical and religious values.

With rising demand for Shariah-compliant products, expansion in SME and retail segments, and supportive regulatory frameworks, the outlook is highly promising.

In my view, Islamic banking will continue to increase its market share and play a transformative role in building a more inclusive, ethical and value-driven financial system.

What is driving the preference for Islamic banking over conventional banking?

Islamic banking is gaining popularity, particularly in Muslim-majority countries such as Bangladesh, primarily because it complies with Shariah principles, where interest (riba) is prohibited.

Beyond religious considerations, it is based on real economic activities involving tangible assets, unlike conventional banking, which is largely interest-based.

This asset-backed, risk-sharing approach enhances transparency and fairness. As a result, Islamic banking is increasingly regarded as a more ethical, stable and socially responsible alternative to traditional banking.

How has your bank's Islamic banking segment performed in recent years?

Bank Asia's Islamic banking segment has demonstrated strong and steady growth in recent years. The deposit–investment ratio has improved significantly, rising from around 50% to nearly 70%, indicating better fund utilisation and operational efficiency.

We remain fully committed to uncompromised Shariah compliance across all operations. A key strength of our portfolio is Musharakah-based financing, which accounts for approximately 50% of total investment, ensuring genuine risk-sharing and ethical financing.

In addition, we have built a strong presence in Sukuk investments and expanded our network from five to 15 Islamic banking windows. These achievements reflect our growing footprint and commitment to excellence in Islamic banking.

What strategies are you adopting to restore depositor confidence in Islamic banks?

Rebuilding depositor confidence in Islamic banking depends fundamentally on strict Shariah compliance and transparency.

Since its inception on 24 December 2008, Bank Asia Islamic Banking has upheld the principle of "Shuddhotai Apnar Munafa", emphasising purity and compliance in all operations.

Confidence is strengthened through a robust Shariah Supervisory Committee, regular Shariah audits and monitoring, skilled Islamic banking professionals, and transparent communication regarding fund utilisation and profit generation.

What opportunities exist to develop the Islamic bond market to support business capital-raising?

The Sukuk market offers significant opportunities for raising Shariah-compliant capital.

Globally, it has grown rapidly, particularly in countries such as Malaysia and Saudi Arabia. In Bangladesh, Sukuk issuance has already laid a strong foundation for further market expansion.

Sukuk can play a crucial role in financing infrastructure, supporting corporate growth, and attracting both individual and institutional investors, including non-resident Bangladeshis.

With appropriate regulatory support, Sukuk can become a key instrument for sustainable and ethical financing, aligning economic growth with social and environmental objectives.

What regulatory support is needed to diversify Islamic banking products?

To diversify Islamic banking products, strong regulatory support is essential.

This includes clear Shariah-compliant guidelines for products such as Sukuk, Takaful and structured investments, tax neutrality for Islamic financial contracts, standardised profit-sharing frameworks, and the development of secondary markets for Islamic instruments.

There is also a need for Shariah-compliant liquidity and risk management tools. Furthermore, promoting fintech integration, innovation and professional training will strengthen the overall ecosystem.

How can Islamic banking products be leveraged to attract NRBs?

Islamic banking products provide a strong platform to attract non-resident Bangladeshis (NRBs). Shariah-compliant options such as Mudarabah deposits, Sukuk investments and Islamic savings schemes offer halal and ethical returns.

Transparent profit-sharing, asset-backed investments and digital banking facilities enhance trust and accessibility, while remittance-linked Islamic accounts simplify fund transfers.

These initiatives can boost foreign currency inflows and strengthen diaspora engagement in Bangladesh's economic development.

How can Islamic banking contribute to sustainable growth and financial inclusion?

Profit-and-loss sharing models such as Mudarabah and Musharakah support SMEs, agriculture and infrastructure, driving job creation and economic development.

Financial inclusion is further enhanced through microfinance, micro-Takaful and Shariah-compliant savings products targeting underserved populations.

In addition, instruments such as green Sukuk finance environmentally sustainable projects.

By combining ethical finance with inclusivity, Islamic banking contributes to long-term economic stability and social equity.

The capital market in Bangladesh faces persistent problems with trust. IPO fraud and manipulation continue despite reforms, undermining investor confidence and impeding economic growth. Long-term stability and national development are at stake.

The nation has learned painful lessons. An estimated $27 billion in market value—roughly 22 percent of GDP at the time—was destroyed by the crashes of 1996 and, more catastrophically, 2010–2011. Millions of investors suffered losses, leaving social repercussions that still shape public perception of the stock market. The same structural flaws remain more than a decade later.

Recent enforcement data highlight the severity. The Bangladesh Securities and Exchange Commission (BSEC) fined individuals nearly Tk 1,488 crore in the past 18 months for manipulation and misconduct. Yet only a fraction has been recovered due to lengthy legal battles. This gap between punishment and accountability sends the wrong signal: wrongdoing is costly on paper but not in practice.

Systemic weaknesses drive these failures—coordinated trading through omnibus accounts, abuse of placement shares, diversion of IPO proceeds, and lack of real-time surveillance. Bangladesh’s market capitalization remains low, around 6 percent of GDP in mid-2025, compared to over 100 percent in deeper, better-run markets. This underdevelopment hampers financing for infrastructure, SMEs, and industrial growth—key to Vision 2041 and the “Smart Bangladesh” agenda.

Globally, fraud persists but is increasingly managed with technology. Scandals like Enron and Madoff spurred regulators to adopt AI for real-time surveillance. Exchanges are also testing blockchain-based settlement systems that are faster, cheaper, and more transparent. Emerging economies such as India and Brazil have embraced digital reforms, strengthening disclosure, monitoring, and enforcement.

Bangladesh, however, still relies on manual oversight and fragmented data. In an era of cyber-enabled scams, this is insufficient. For a small, fragile market, each crisis inflicts disproportionate damage and deters investors. Modern technology offers a transformative opportunity.

Blockchain can fundamentally change IPOs and securities transactions. In a permissioned blockchain, every transaction is permanently recorded, time-stamped, and visible to authorized participants. Smart contracts can automate IPO rules—ensuring funds are released only when verified conditions are met, allocations follow transparent logic, and lock-up periods cannot be bypassed. Immutable records eliminate manipulation.

AI complements this as a real-time watchdog. It can analyze trading patterns, detect unusual movements, and identify coordinated networks far faster than traditional monitoring. Leading exchanges report fewer false alarms and quicker enforcement after adopting AI-driven systems.

Together, blockchain and AI create a powerful regulatory architecture: blockchain ensures data integrity, AI provides intelligence and early warning. Such systems could flag suspicious IPO activity, trigger halts during abnormal behaviour, and deliver regulators immediate, evidence-based alerts. Privacy-preserving technologies safeguard data.

For Bangladesh, implementation can be phased. Pilot IPOs integrated with the central securities depository would allow testing and scaling. International experience shows such reforms reduce fraud risk, shorten settlement cycles, improve liquidity, and restore confidence.

A regulatory sandbox led by BSEC, with Bangladesh Bank, could test blockchain-based e-IPO systems and AI surveillance. Capacity building is vital—training regulators, auditors, and intermediaries to oversee data-driven systems. Collaboration among exchanges, the depository, banks, and technology providers will be essential.

Implementation should begin with targeted pilots: blockchain-enabled IPOs and AI surveillance in the secondary market, before scaling. This gradual approach limits disruption while signaling decisive reform.

Bangladesh is well-positioned to leapfrog. High mobile penetration, a young tech-savvy population, and strong policy backing under the Smart Bangladesh Master Plan provide a solid foundation. While advanced economies refined systems over decades, late adopters can now deploy mature technologies quickly.

The cost of inaction is clear: repeated scandals will cap growth, deter foreign investment, and push savings into informal channels. The benefits of action are equally clear: a transparent market that channels savings into productive investment, lowers risk premiums, and supports sustainable transformation.

Fraud is not inevitable—it is a governance problem that can be solved. By adopting blockchain and AI as core regulatory tools now, Bangladesh can protect investors, strengthen institutions, and become a regional leader in financial innovation. Decisive reform today will yield economic, social, and strategic dividends for decades.

The year 2025 will be remembered as a period of significant contraction for dividend-seeking investors in Bangladesh's capital market, as multinational companies faced an unprecedented squeeze on profitability.

Historically regarded as the bedrock of the Dhaka and Chattogram bourses for their consistent and generous payouts, these global giants saw their collective dividend distributions plummet by 46% compared with the previous year.

Currently, out of the 13 multinational companies listed on the two stock exchanges, the status of dividend declarations remains mixed. While eight have already announced their payouts for the year, others are at various stages of their financial cycles.

Bata Shoes and Marico Bangladesh have declared interim dividends but are yet to finalise their year-end figures. Meanwhile, firms such as Berger Paints and Marico follow a financial year that ends in March, meaning their full annual performance will not be clear for several more months. Heidelberg Materials also yet to declare its stance for 2025.

Data from ten major multinational entities show they declared a total of Tk5,070 crore in dividends for the 2025 financial year, a sharp retreat from the Tk9,411 crore in 2024.

This massive shortfall of Tk4,341 crore reflects a broader story of operational challenges, ranging from inflationary pressures and site relocations to historic losses and shifting macroeconomic conditions.

Downturn driven by heavyweights

The downturn in payouts was driven largely by the market's heavyweights, with British American Tobacco (BAT) Bangladesh and Grameenphone recording the most substantial declines.

BAT Bangladesh, a long-term favourite for income investors, saw its cash dividend drop from 300% in 2024 to just 30% in 2025. In monetary terms, this represented a collapse from Tk1,620 crore to Tk162 crore.

According to the company's price-sensitive disclosure, its net profit for the year ending December 2025 decreased by 67%, primarily due to a Tk715 crore one-off impact caused by the forced closure of its Dhaka factory and the subsequent relocation of machinery to Savar. This restructuring, combined with rising operating expenses and a decline in turnover, forced the tobacco giant to adopt a much more conservative stance on profit distribution.

Similarly, the telecommunications leader Grameenphone declared a 215% cash dividend for 2025, which, while substantial in the context of the broader market, was significantly lower than the 330% payout offered in 2024.

The company's total dividend amount fell from Tk4,456 crore to Tk2,903 crore as its net profit dipped to Tk2,958 crore from the previous year's Tk3,630 crore. The telecom sector, which is highly sensitive to consumers' purchasing power, felt the weight of persistent high inflation throughout the year, leading to a more cautious approach to cash preservation.

Perhaps the most startling development of the year came from Singer Bangladesh. For the first time in its listed history, the electronics giant failed to recommend any dividend.

The company suffered a loss of Tk225 crore in 2025, a sharp deterioration from a loss of Tk48.93 crore in 2024. The depth of the financial crisis at Singer led to negative retained earnings of Tk150 crore, making a dividend payout legally and financially impossible.

Industry insiders pointed to the double blow of a depreciating currency and a slowdown in consumer demand for durable goods as the primary drivers of this historic outcome.

Linde Bangladesh also saw a drastic change in its payout profile. While it had declared a record-breaking 4,500% cash dividend in 2024 – fuelled by the disposal of assets and special capital gains – it returned to a more standard 100% cash dividend in 2025. Consequently, the total amount disbursed by the industrial gas provider fell from Tk684 crore to just Tk15 crore.

Other firms such as Unilever Consumer Care and Marico Bangladesh also trimmed their payouts, with Marico's interim dividend standing at 1,575% cash compared with a total of 3,840% in the preceding year.

RAK Ceramics, grappling with a loss of nearly Tk40 crore, limited its 10% cash dividend to general shareholders only, reflecting the immense pressure on the construction and real estate supply chain.

Against the trend

Despite the prevailing gloom, a few multinationals managed to defy the trend. Robi Axiata reported a significant improvement in its bottom line, with net profit rising to Tk938 crore from Tk702 crore. This allowed the mobile operator to increase its cash dividend to 17.5%, up from 15% in 2024.

LafargeHolcim Bangladesh also showed resilience, raising its cash dividend to 40% from 38% after posting a robust profit of Tk511 crore. These outliers, however, were not enough to offset the massive dividend erosion seen across the rest of the MNC segment.

Market analysts have characterised 2025 as a "year of survival" for most multinationals operating in Bangladesh. The combination of high inflation, unfavourable macroeconomic conditions, and political uncertainty created a hostile environment for business growth.

Many of these firms found themselves struggling with high import costs due to the dollar crisis, while also facing a domestic market where consumers were increasingly forced to cut back on non-essential spending.

The resulting squeeze on margins meant that even profitable firms had to prioritise liquidity and balance sheet strength over rewarding shareholders.

Gold hit a near one-week low on Monday as a stronger dollar and ‌oil’s surge above $100 after the US moved to blockade Iranian ports fuelled inflation concerns, prompting traders to scale back expectations for Federal Reserve rate cuts this year.

Spot gold was down 0.4 percent at $4,730.75 ​per ounce, as of 0735 GMT, after hitting its lowest since April 7 ​earlier in the day at $4,643. US gold futures for June delivery fell 0.7 percent to $4,753.30.

The dollar strengthened 0.3 percent as the US Navy prepared a blockade of ​the Strait of Hormuz that could restrict Iranian oil shipments after peace talks between the US ​and Iran broke down.

Iran’s Revolutionary Guards responded by warning that military vessels approaching the strait will be considered a ceasefire breach and dealt with harshly and decisively.

“Ceasefire optimism has unwound following the failure of ​the peace talks, and the resulting push higher by the dollar and oil ​prices has put gold on the back foot again,” said Tim Waterer, chief market analyst at KCM ‌Trade.

Spot gold ⁠has fallen more than 11 percent since the US-Israeli war on Iran began in late February. While inflation and geopolitical risks typically boost gold’s appeal as a safe haven, elevated interest rates weigh on the non-yielding metal.

A stronger dollar also makes greenback-priced bullion more expensive for ​holders of other ​currencies.

“As soon as oil ⁠prices push back above $100, attention quickly turns to potential central bank rate hikes to curb inflation, and it is this interest ​rate outlook that is undermining gold’s performance,” Waterer said.

Traders now ​see little ⁠chance of a US rate cut this year, as higher energy prices threaten to feed into broader inflation and limit the scope for monetary easing.

Investors had priced in two Fed ⁠rate cuts ​for 2026 before the start of the war.

Interest payments, subsidies, incentives and cash loans could gobble up big pies of the next budget as the government earmarks over Tk 2.59 trillion on this account and officials predict higher energy costs could bloat the figure.

The sum is roughly 27.86 per cent of the national budget worth Tk 9.3 trillion for fiscal year 206-27, officials at the finance division say.Personal Finance Software

The amount is 7.99-percent higher than the Tk 2.39-trillion revised allocation in the current fiscal year.

They say subsidy allocations have not been estimated taking into account a potential doubling of fuel-import costs amid the ongoing volatility and caution that if the Gulf conflict persists, additional funding will be required for gas, power and fertiliser subsidies.

Finance Ministry officials also warn that government's interest burden on domestic borrowing could rise further if inflation does not ease and liquidity in the financial sector takes longer to recover.

Further fiscal pressure may arise if the BNP government proceeds with its election pledges to implement "family card" and "farmer card", which would require additional allocations, they note.

The projections emerged at a meeting of the Coordination Council on Fiscal, Monetary and Exchange Rate Affairs held last Friday with Finance Minister Ameer Khasru Mahmud Chowdhury in the chair.

According to documents presented at the meeting, the budget deficit for the next fiscal year has been estimated at Tk 2.35 trillion, or 3.4 per cent of GDP, taking into account the heavy burden of subsidies, incentives and debt obligations. In the revised budget for the current fiscal year, the deficit was set at 3.3 per cent of GDP, amounting to Tk 2.0 trillion.

To finance the deficit, the government plans to borrow Tk 1.19 trillion from domestic sources like banks and savings instruments, while Tk 1.16 trillion from foreign sources, an overall increase of Tk 350 billion, or 17.5 per cent, compared to the current fiscal year.

External borrowing alone is set to surge by over 84 per cent, according to the documents.

Officials note that the government is increasingly leaning towards external borrowing to ease pressure from high-cost domestic debt, as a significant share of interest payments is tied to bank loans and savings certificates.

Interest payments alone are estimated at Tk 1.42 trillion in the next budget, including Tk 1.15 trillion for domestic debt and Tk 270 billion for foreign loans.

However, officials caution that interest expenses could rise further if inflation persists, fuel prices increase, or liquidity conditions in the banking sector fail to improve.

Subsidy allocations, meanwhile, remain under pressure amid global energy-price volatility. The government has earmarked Tk 370.0 billion for the power sector, Tk 65.0 billion for LNG, Tk 270.0 billion for fertiliser and Tk 96.0 billion for food-support programmes.

Total spending on subsidies, incentives and cash loans is set at Tk 1.17 trillion, up from Tk 1.12 trillion in the revised budget.

Officials note that subsidy needs could increase further if the ongoing tensions in the Middle East continue to push up fuel-import costs. The finance minister recently informed parliament that higher global fuel prices had already added Tk 360.0 billion in subsidy pressure during March-June of the current fiscal year.

While allocations for agricultural, export and jute incentives are being kept unchanged, remittance incentives are set to rise by Tk 8.0 billion to Tk 70.0 billion, reflecting stronger inflows.

"Expenditures such as interest payments offer little scope for control," says economist and former Director-General of Bangladesh Institute of Development Studies (BIDS) Dr Mustafa K. Mujeri, adding that the government has scope of controlling such spending in future.Local Business Directory

He told The Financial Express that subsidy spending, financed by public funds, needs to be rationalised through careful targeting.

He suggests phasing out blanket subsidies and limiting support to sectors that do not directly benefit the poor, warning that failure to do so would raise the debt burden on future generations.

Commerce Minister Khandakar Abdul Muktadir has assured that the government will not impose any additional tax burden on businesses in the upcoming national budget despite mounting fiscal pressures.

Reducing the cost of doing business and easing access to government services are essential to boost private sector investment and trade, he made the remarks while addressing a pre-budget discussion organised by the Dhaka Chamber of Commerce and Industry (DCCI) at a hotel in Dhaka today (13 April).

The minister acknowledged that the government is under significant financial strain due to what he described as "over-ambitious projects" undertaken by the previous administration.

He noted that although Bangladesh's economy is valued at around $460 billion, nearly 70 million people remain below the poverty line, while the number of taxpayers is still relatively low.

Muktadir also pointed to the country's limited energy storage capacity, which forces reliance on higher-cost fuel imports from the spot market amid ongoing geopolitical tensions in the Middle East.

Emphasising the need for expansion of the tax net, DCCI President Taskeen Ahmed said sustaining economic growth would require automation and simplification of revenue collection systems.

He proposed raising the tax-free income threshold to Tk5 lakh, capping the maximum personal income tax rate at 25%, aligning the tax rates of non-listed companies with those of listed ones and abolishing the advance VAT system.

The business leader also called for modernisation of financial sector policies to ensure stability, reduction of non-performing loans, stabilisation of foreign exchange reserves, and rationalisation of policy interest rates to encourage manufacturing investment.

He highlighted the need for uninterrupted energy supply, diversification of export products and markets, and targeted incentives for promising sectors in the upcoming budget.

Mahbubur Rahman, president of the International Chamber of Commerce Bangladesh, observed that although calls to increase the tax-to-GDP ratio have persisted for years, there has been limited effective action.

He said that high lending rates, reduced credit flow to the private sector, and ongoing power and energy shortages are discouraging both domestic and foreign investment.

Mahbubur urged the government to explore alternative energy import sources and reduce reliance on intermediaries, while ensuring a stable and predictable policy environment.

Monzur Hossain, member (secretary) of the General Economics Division, emphasised that reviving sluggish economic growth remains a key priority for the government, underscoring the importance of promoting the cottage, micro, small, and medium enterprises sector and strengthening research activities to expand investment.

Former DCCI President Rizwan Rahman highlighted that bureaucratic complexities and alleged harassment from the tax authority are severely affecting the private sector.

He noted that the lack of effective initiatives to expand the tax net is increasing pressure on existing taxpayers and called for grassroots-level investment incentives along with higher allocations for healthcare and education.

Another former DCCI President Hossain Khaled said that only about 30% of transactions occur through formal channels, limiting effective revenue collection, and suggested that the current VAT system could be replaced with a GST framework.

KM Rezaul Hasanat David, president of the Bangladesh Independent Power Producers' Association, said expressed concern over delays in establishing a land-based LNG terminal and stressed the importance of expanding energy storage capacity and attracting joint and foreign investment.

Chief Economist of Bangladesh Bank Akhand Mohammad Akhtar Hossain emphasised the need to increase foreign investment, ensure accountability in government service delivery, and control inflation.

Participants across the four thematic sessions on income tax and VAT, financial sector, industry and trade, and infrastructure emphasised the need for comprehensive reforms, including automation of the revenue system, realistic tax collection targets, uninterrupted energy supply, improved infrastructure, stable exchange rates, lower lending rates, and stronger governance in the financial sector.

DCCI members, economists, researchers, and representatives from both public and private sectors also attended the event.

The Dhaka Chamber of Commerce and Industry (DCCI) has proposed raising the individual tax-free income threshold to Tk5 lakh and capping the maximum personal income tax rate at 25% as part of its recommendations for the national budget for fiscal year 2026–27.

The proposals were presented today (13 April) at a pre-budget consultation titled "Budget 2026–27: Private Sector Expectations," held at InterContinental Dhaka, with participation from policymakers, economists and business leaders.

Tax reforms and compliance measures

DCCI recommended setting the corporate tax rate for non-listed companies at 25%, aligning it with listed firms to ensure parity and encourage formalisation.

To improve compliance and transparency, the chamber proposed introducing a fully automated corporate tax return system.

It also suggested integrating the e-TDS platform with the National Board of Revenue (NBR) system to accelerate processing and enhance verification efficiency.

Additionally, DCCI called for the gradual withdrawal of advance tax at the import stage for manufacturers and a reduction for commercial importers.

VAT system overhaul

In the value-added tax (VAT) regime, the chamber proposed abolishing advance VAT and introducing a mobile application to complement the existing online system.

It also recommended implementing a single-step refund mechanism to expedite VAT reimbursements and reduce administrative delays.

Boosting private investment

To stimulate private sector investment, DCCI urged the rationalisation of interest rates and reducing government reliance on domestic bank borrowing.

The chamber also emphasised expanding access to credit through refinancing schemes and credit guarantee programmes to support businesses, particularly SMEs.

Capital market development

DCCI called for strengthening the capital market by increasing initial public offerings (IPOs) and encouraging large corporations and small and medium enterprises to go public.

It also proposed introducing long-term financing instruments such as bonds to diversify funding sources.

Sectoral support ahead of LDC graduation

Highlighting the importance of Bangladesh's upcoming graduation from Least Developed Country (LDC) status, DCCI urged targeted policy support for key sectors, including leather, pharmaceuticals, ICT, electronics and light engineering.

The chamber further recommended budget allocations for emerging sectors such as semiconductor research and artificial intelligence, along with the establishment of specialised industrial zones.

Infrastructure and investment incentives

To accelerate infrastructure development, DCCI proposed tax incentives, including exemptions on high-cost construction materials and machinery.

It also suggested introducing infrastructure bonds and sukuk to attract long-term investment.

Energy, governance and sustainability

DCCI stressed the importance of stable energy pricing through long-term import agreements and improved project management through real-time monitoring systems.

It recommended prioritising the completion of ongoing projects over launching new mega projects to ensure efficient resource utilisation.

The chamber also called for establishing secure data centres for the service sector and allocating budgetary support for environmental, social and governance (ESG) compliance to enhance global competitiveness.

Pragati Insurance has recommended a 27% cash dividend and a 3% stock dividend for the year ended 31 December 2025, reflecting a continued effort to reward shareholders while strengthening its capital base.

In the previous year, the insurer paid 20% cash and 7% stock dividend for their shareholders.

According to a disclosure on the stock exchange yesterday, the company will hold its Annual General Meeting on 18 June 2026 via a digital platform. For this, the record date has been fixed for 12 May 2026.

Despite this declaration, the share price of the company decreased yesterday by 2.61% to Tk71 on the Dhaka stock exchange.

End of December 2025, the company reported an earnings per share (EPS) of Tk5.31, marking a slight increase from Tk5.24 in the previous year.

The net asset value (NAV) per share also improved to Tk57.36, compared to Tk53.82 a year earlier, indicating a stronger asset base.

However, net operating cash flow per share declined significantly to Tk1.44 from Tk3.13 in 2024, suggesting a reduction in cash generation from core business operations despite improved profitability.

The company explained that the declaration of bonus shares aims to increase its paid-up capital, which is expected to enhance its financial strength and support expansion.

It further clarified that the stock dividend has been declared from retained earnings, ensuring compliance with regulatory requirements.

The company also said that the bonus shares have not been issued from capital reserves, revaluation reserves, or any unrealised gains. Additionally, the retained earnings will remain positive after the dividend distribution, avoiding any negative balance.

The primary objectives of the company are to carry on all kinds of non-life insurance business. The company's non-life insurance products include fire and allied perils insurance, marine cargo and hull insurance, aviation insurance, automobile insurance and miscellaneous insurance.

Market analysts said that while the steady growth in EPS and NAV signals operational stability, the sharp decline in cash flow may raise concerns among investors regarding liquidity and sustainability of earnings.

They suggest investors closely monitor the company's future cash flow trends.

Bangladesh's Small and Medium Enterprise (SME) sector is witnessing a sharp decline in activity, with production down by as much as 30% in recent weeks amid the global energy crisis, rising raw material costs, and frequent load-shedding.

Mirza Nurul Ghani Shovon, President of the National Association of Small and Cottage Industries of Bangladesh (NASCIB), told The Business Standard that the situation is becoming untenable for many small-scale manufacturers.

"The energy crisis has pushed many institutions to the brink of closure. In many cases, production has already dwindled by 25% to 30%," Shovon said.

He noted that without a stable power supply, factories are unable to meet their production target, leading to a massive drop in output across the board.

The sector, which contributes over 28% to the national GDP and employs roughly three crore people, is currently navigating its toughest period since the pandemic.

The leather and chemical-dependent sectors are among the hardest hit. Ilias Hossain, the proprietor of Rajex Leather, revealed that essential production components have become extremely expensive.

"The price of chemicals used in leather processing has doubled, and in some cases, even tripled," Ilias claimed.

He added that the cost of imported raw materials from China – such as gum and pasting – has surged due to global supply chain disruptions linked to the Middle East conflict. "When raw materials cost this much, the price of every finished product, from belts to footwear, must go up, which then kills consumer demand."

While production is dwindling, sales are also being stifled by operational restrictions. Shofiqul Islam, owner of Topex Leather, pointed out that the government-mandated early closing of shops to save electricity has put businesses in a tight spot.

"We are forced to wind down by 7pm or 8pm. But our primary customers, specially service holders, usually come to shop after their office hours in the evening. Our wholesale and retail sales are taking a massive hit," Shofiqul explained.

Monoranjan Sarker Noyon, proprietor of Manikganj-based Noyon Handicrafts, told TBS that the current economic climate has forced a significant reduction in corporate and wholesale orders.

"Our production hasn't been hit significantly yet, but our orders have definitely decreased," Noyon said, noting that even long-term regular clients are unable to maintain their usual purchase volumes as consumer demand falters at the retail level.

Anwar Hossain Chowdhury, managing director of SME Foundation, echoed these concerns, stating that the impact on marginal and rural entrepreneurs is particularly severe.

"The supply chain is broken. Production and marketing are both suffering a negative impact that is easily predictable and deeply concerning," he added.

Despite the challenges, some niche sectors like handmade crafts remain resilient. Jannatul Ferdous, founder of Bhumi Artisan, noted that while her production isn't fuel-dependent, the overall economic slowdown might eventually weigh on even the most specialised markets.

To prevent a total collapse of the sector, industry leaders are calling for immediate government intervention.

"The banks have moved away from single-digit interest rates and returned to higher tiers," Shovon of NASCIB remarked.

"With production down by 30% and costs rising, these high interest rates will finish us off. The government must ensure a return to single digit interest rate to keep the SME economy alive," he said.

The International Monetary Fund (IMF) today (14 April) projected that Bangladesh's gross domestic product (GDP) will grow by 4.7% in the current fiscal year (FY26), before slowing to 4.3% in FY27.

The FY26 growth forecast remains unchanged from the IMF's January projection.

Bangladesh's inflation is now expected to rise to 9.2% in FY26, higher than the earlier estimate of 8.9%.

However, the global lender projects inflation to decline sharply to 6% in FY27.

Meanwhile, the government has set a provisional target of 6.5% GDP growth for the next fiscal year, aiming to return to a high-growth trajectory as part of its ambition to build a trillion-dollar economy by 2034.

The government is also targeting an inflation rate of 7.5% in FY27, which is higher than the IMF's projection.

The IMF's growth outlook is more optimistic than forecasts by the World Bank and the Asian Development Bank, both of which released their projections earlier this month.

On 8 April, the World Bank expected the country's economy to grow by 3.9% in the current fiscal year, before rising to 4.6% in FY27.

The World Bank warned that Bangladesh's economy faces significant challenges with slowing growth and rising poverty for three consecutive years, persistent inflation, a stressed banking sector, weak revenue mobilisation, and subdued private investment, which is further compounded by the headwinds from the conflict in the Middle East.

Meanwhile, on 10 April, Asian Development Bank's latest Asian Development Outlook April 2026 forecasted Bangladesh's gross domestic product (GDP) to grow by 4% in FY26 and 4.7% in FY27, up from 3.5% in FY25.

Inflation is projected to remain elevated at 9% in FY26, despite some easing, reflecting persistently high global energy prices and ongoing supply disruptions. It is expected to moderate to 8.5% in FY27 as external shocks subside and domestic supply conditions improve, reads the ADB report.

It was warned that the downside to the outlook remains substantial, particularly if the conflict is prolonged.

Disruptions to global energy markets, shipping routes, and supply chains could drive sustained increases in oil and gas prices, intensifying domestic inflationary pressures and complicating ongoing disinflation efforts, thereby constraining macroeconomic policy flexibility.

While the World Bank and Asian Development Bank had lowered Bangladesh’s GDP growth forecast due to the Persian Gulf crisis and domestic vulnerabilities, the International Monetary Fund has kept its earlier projection unchanged.

The IMF’s World Economic Outlook projects Bangladesh’s GDP growth at 4.7 percent for FY2025–26, which was the same as its earlier projection from January.

However, IMF's growth projection is set to dip further to 4.3 percent in the next fiscal.

The World Bank revised its projection down to 3.9 percent growth from 4.6, while the ADB revised its forecast down to 4 percent from its previous projection of 4.7 percent.

Former World Bank Lead Economist Zahid Hussain told The Daily Star that the IMF’s forecast “appears rather strange,” adding that “it is the same as projected in their Article IV report released in January 2026".

The absence of any impact of the war in the current fiscal year is inconsistent with their own assumption that economies with vulnerabilities and limited buffers are likely to be hit hardest. Bangladesh is one such economy.

He also said individuals and firms in Bangladesh have been living with the growth and inflation impact ever since the war started. There is no reason in fact or logic to believe Bangladesh will remain insulated from the impact of the war for four months.

Hussain notes that the IMF’s 4.3% growth projection for FY27 is more realistic if its reference scenario, in which the war shock fades by June, materialises.

The government, however, remains confident, insisting that GDP growth will reach 5 percent in 2026.

A ship named 'MT Great Princess' arrived at Chattogram Port carrying 12,000 tonnes of jet fuel from Singapore this morning (14 April).

The cargo was supplied by Indian Oil Corporation Limited.

Two more ships, 'MT Term Damini' and 'MT Lucia Solis', are expected to arrive tonight with a total of around 68,000 tonnes of diesel.

As of 12 April, Bangladesh had an estimated stock of 22,000 tonnes of jet fuel, which can meet the demand for about two weeks.

The recent consignment has slightly increased the stock. Jet fuel consumption has been relatively low, with 21,000 tonnes sold in the first 12 days of the month, averaging 1,758 tonnes per day, slightly higher than last year.

Diesel consumption is significant in Bangladesh, accounting for about 63% of total energy consumption. The arrival of the two diesel-carrying ships tonight will further contribute to the country's energy supply.

The demand for diesel is high across various sectors such as transport, agriculture, industry, and power. In April, the total demand is around four lakh tonnes according to BPC.

To meet this demand, a detailed import plan has been implemented throughout the month.

At the beginning of April, two ships delivered a total of 61,000 tonnes of diesel on 12 April. Despite this, the demand pressure has not completely eased. Between 1 and 12 April, 133,000 tonnes of diesel were sold at an average daily rate of 11,138 tonnes.

As of 12 April, the available diesel stock was approximately 119,000 tonnes, which could cover the demand for about 10 days.

With the addition of two new shipments, the stock may last a few more days, but the long-term relief depends on continuous imports.

Currently, over 11,000 tonnes of diesel are being sold daily in the country.

BPC Chairman Md Rezanur Rahman told journalists that efforts are being made to source fuel from alternative suppliers to prevent any major crisis this month.

He mentioned that several ships have already arrived, and more are expected to come to ensure an adequate fuel supply.

Bangladesh is scrambling to secure urea imports after an international tender floated last month failed to attract any bidders, with the Aman paddy, the country’s second-largest rice crop, due for planting in June.

Authorities met Russian representatives yesterday to explore a government-to-government deal. At the same time, Dhaka is approaching nearby producers such as Brunei, as well as more distant and less conventional suppliers, including Latvia and Ukraine.

The government has also asked Saudi Arabia, a regular supplier, to consider alternative shipping routes.

Since the US-Israel war on Iran on February 28, the Strait of Hormuz -- a key artery for global fertiliser trade -- remains closed. It disrupts flows, accounting for roughly 30 percent of global fertiliser shipments.

Requesting anonymity, a senior official at the state-run Bangladesh Chemical Industries Corporation (BCIC), said they are currently in discussions with Russia, Latvia, Brunei, and Ukraine to secure imports.

“We are looking to get the fertiliser from these countries as they can ship using routes bypassing the Strait of Hormuz,” he said.

After a meeting with Russian representatives yesterday, he said Moscow is expected to submit a formal proposal soon.

The urgency follows the shutdown of five of the country’s six urea factories because of gas supply concerns after the US-Israel war on Iran. The conflict has reverberated across the Middle East, a crucial hub for fertiliser exports and for natural gas used in domestic production.

Bangladesh needs more than 26 lakh tonnes of urea each year. About three-quarters of demand is met through imports, as local plants often operate below capacity when gas is diverted to other sectors.

Current stocks stand at around 300,000 tonnes, enough to meet demand until June. BCIC previously said it was working to build reserves to cover requirements in the second half of the year.

Saudi Arabia, the United Arab Emirates and Qatar are Bangladesh’s main suppliers, providing nearly 10 lakh tonnes annually. Since the war broke out, major producers in Qatar and Saudi Arabia declared force majeure and temporarily halted production.

In response to the US-Israel attack, Iran’s closure of the Strait of Hormuz has compounded supply disruptions, pushing up the cost of fertiliser and the natural gas used to produce it.

According to the World Bank’s latest commodity price data, urea prices have jumped by more than 50 percent compared with levels before the war began on February 28. The average price rose to $725.6 a tonne in March from $472 earlier.

Prices of other fertilisers, including diammonium phosphate (DAP) and triple superphosphate (TSP), have also surged.

In March, as prices climbed and the planting season drew closer, BCIC floated a tender to import 200,000 tonnes of urea. As it failed to attract any offers, a second tender is now underway with the closing deadline on Thursday this week.

Contacted, BCIC Chairman Md Fazlur Rahman said Saudi Arabia has agreed to supply 40,000 tonnes, but the shipment has yet to arrive because of the disruption in Hormuz.

“So, we have requested them to see whether the fertiliser could be shipped via alternative ports that would avoid the Strait of Hormuz and ensure delivery to Bangladesh,” he said.

Rahman said prices rose to $785-$786 a tonne last week and have climbed above $800 this week.

He said that higher prices would swell the subsidy bill, as the government provides urea and other key fertilisers such as DAP and TSP to farmers to ensure food production.

The government has set aside Tk 17,000 crore for fertiliser subsidies in the current fiscal year. Officials expect that figure to exceed Tk 30,000 crore next year if prices remain elevated.

Rahman said efforts are underway to restart factories closed because of gas shortages. “At present, the situation is quite complex and uncertain. We are making every possible effort to overcome this crisis.”

A blog published last week by the International Food Policy Research Institute said that rice production in countries, including Bangladesh, could suffer if fertiliser supplies remain disrupted.

“Rice is fertiliser-intensive and concentrated in South and Southeast Asia, regions heavily dependent on Gulf urea imports. India, Pakistan, Bangladesh, and much of Southeast Asia source a significant share of their nitrogen fertiliser from Gulf producers,” the authors wrote.

“If higher fertiliser costs persist into the second half of 2026 and coincide with an El Niño event, rice-producing regions could face both rising input costs and less favourable growing conditions at the same time,” it mentioned.

The newly elected BNP government is preparing a large expansionary budget in its first fiscal plan, aimed at meeting public expectations, accelerating development activities to create jobs, and restoring the economy to a higher growth trajectory through increased investment.

For the fiscal 2026-27, the government is planning to spend Tk9.30 lakh crore – up by 25% from the current fiscal year's budget, while the finance ministry is expected to set a revenue collection target of Tk6.95 lakh crore, according to budget documents drafted by the finance ministry.

If approved, the revenue agency will have to chase a target which is higher by Tk1,00,000 crore than that of the current year, a level economists consider beyond its existing capacity.

The National Board of Revenue (NBR) is facing a shortfall of nearly Tk72,000 crore against its target in the first eight months of the current year.

To mobilise additional revenue, the NBR may have to reduce tax exemptions across multiple sectors, raise value-added tax rates, and shift tariffs towards more market-based structures.

Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), said budget sizes typically grow by 12% to 15% annually, but the government is planning an increase of more than 25% to fulfil multiple commitments, making revenue mobilisation the central challenge.

"The main problem with the projected budget is the fiscal constraint and how to generate the required funds. How will so much money come? " she said.

She added that achieving such revenue targets with the current capacity of the NBR is unrealistic, and the government should instead set more achievable targets and focus on implementation.

Priorities in budget

The current fiscal year's budget stands at Tk7.90 lakh crore in the original estimate and Tk7.88 lakh crore in the revised version, with the NBR revenue target set at Tk5.03 lakh crore. By the end of February, revenue reached Tk2.50 lakh crore.

According to draft budget documents presented by the finance ministry at a meeting on Friday, the proposed budget prioritises welfare-based initiatives such as Family Card and Farmer's Card, in line with the election manifesto. It also focuses on containing inflation and maintaining macroeconomic stability.

Other key priorities include skills development to promote entrepreneurship and expand domestic and overseas employment, accelerating growth, strengthening agricultural support, expanding healthcare, restoring discipline in the financial sector, and removing investment barriers through deregulation.

The budget also places emphasis on developing the creative economy, including film, music, sports, and rural culture. The government has already initiated recruitment of sports and music teachers in primary schools and introduced incentive schemes for athletes.

Deficit financing

The next budget sets a revenue collection target of Tk6.04 lakh crore, equivalent to 9.21% of GDP. However, the tax-to-GDP ratio has fallen below 7% and continues a long-term decline.

To raise revenue, the government plans digitalisation of tax administration, expansion of the tax base, stronger institutional capacity, and higher non-NBR collections.

The finance ministry has also sharply raised the non-NBR tax target. Against Tk5,786 crore collected in the first eight months of the current fiscal year, the target for next year is Tk25,000 crore.

The fiscal deficit is projected at Tk2.35 lakh crore, or 3.4% of GDP. While the current fiscal year's original budget was smaller than the previous year, its deficit was also set at 3.4% of GDP, higher than the next budget's projection.

The deficit financing plan includes borrowing Tk1.19 lakh crore from banks and savings certificates, and Tk1.16 lakh crore from foreign sources.

In managing the deficit, the government is expected to shift towards lower-interest foreign loans instead of high-cost domestic borrowing. A significant share of annual budget expenditure on interest payments goes to domestic bank loans and savings instruments.

The finance ministry has projected Tk1.27 lakh crore for interest payments, of which Tk1.05 lakh crore is allocated for domestic debt interest and Tk22,500 crore for foreign debt interest.

Finance officials said, if energy prices rise, inflation does not ease, or liquidity recovery in the financial sector is delayed, the government may face higher interest payment pressures on domestic borrowing.

The IMF generally considers a deficit within 5% of GDP manageable. The government is, however, aiming for tighter fiscal discipline. Still, shortfalls in revenue could force additional borrowing.

The Annual Development Programme (ADP) allocation is set to rise by 50% from the current revised budget to Tk3 lakh crore, which officials expect will boost public investment and employment.

Finance officials said project public investment will reach 6.5% of GDP next fiscal year, arguing that each taka of government spending can attract multiple times more private investment. Private investment is therefore expected to rise to 24.9% of GDP.

Subsidy pressure to grow

Despite the large overall budget, subsidy allocations have not been fully adjusted for rising fuel import costs amid instability in the Middle East.

Allocations include Tk37,000 crore for power, Tk6,500 crore for LNG imports, Tk27,000 crore for fertiliser, and Tk9,600 crore for food assistance, taking total subsidies, incentives and cash support to Tk116,125 crore, up from Tk112,455 crore in the revised budget of the current fiscal year.

The finance minister told Parliament that the Iran conflict alone added Tk36,000 crore in subsidy pressure between March and June due to higher global fuel prices. Budget documents warn that prolonged instability could further increase funding needs for gas, electricity and fertiliser subsidies.

Additional funding pressures may arise from the BNP government's election pledges, including family and farmer cards. The government has begun paying Tk2,500 monthly to low-income households under these schemes, alongside Tk9,600 crore for broader social protection programmes.

In the current fiscal year, this allocation was Tk9,663 crore in the original budget and Tk10,214 crore in the revised budget.

In the next fiscal year, allocations for agricultural incentives, export cash support and jute exports remain unchanged, while remittance-linked incentives rise by Tk800 crore to Tk7,000 crore.

ADP allocations also show a sharp increase in health spending to Tk20,608 crore, about six times the revised level, lifting the sector from 15th to third position.

The largest development allocations go to the Local Government Division and Roads and Highways Division, followed by power, primary education, and secondary and higher education.

Brazil and the United States have become two key suppliers of corn to Bangladesh’s growing feed industry, as imports from India -- the traditional source -- have declined, according to a recent report by the US Department of Agriculture (USDA).

Bangladesh imported nearly 15 lakh tonnes of corn, also known as maize, in the first 10 months of the marketing year 2025-26 (MY26). Of this, 78 percent came from Brazil, while the remaining 22 percent was supplied by the US and India, with each accounting for 11 percent, the report on Bangladesh’s grain and feed sector, published last week, said.

The report said lower global maize prices encouraged traders and feed producers to import and stockpile large volumes. Bangladesh needs about 70 lakh tonnes of maize annually and imports around 15 lakh tonnes to cover gaps in local production.

“Growth in the poultry, dairy, and aquaculture sectors has increased demand for corn as a key feed ingredient,” the US agency said.

India has traditionally been a major supplier of corn to Bangladesh due to competitive prices, efficient logistics and shorter shipping times. However, since 2024, India’s exportable corn surplus has fallen sharply as it expanded corn-based biofuel production. As a result, Brazil has become the leading supplier for Bangladesh.

The report added that Bangladesh imported maize from the US in MY26 for the first time since 2018, after three local feed companies began purchases. This followed an agreement for Bangladesh to increase imports of US agricultural goods under a reciprocal trade deal aimed at reducing a trade deficit of more than $6.2 billion.

Under the deal, the US imposed a 19 percent reciprocal tariff on Bangladesh’s exports, on the condition that Dhaka would increase imports of US goods. The agreement covers wheat, soybeans and soy products, as well as cotton, with a total estimated value of $3.5 billion.

Total maize shipments from the US to Bangladesh reached about 160,000 tonnes in MY26, the USDA said.

The USDA projects that Bangladesh’s maize imports could reach 18 lakh tonnes, which is 27.2 percent higher than its estimate for MY25. However, it has lowered its forecast for MY27 to 17 lakh tonnes due to higher domestic production and larger beginning stocks.

Farmers are expected to harvest about 59 lakh tonnes of maize in MY27, up 1.7 percent from the previous year.

The report added that maize cultivation has expanded in recent years as farmers receive better prices due to strong demand from the local feed industry.

Farmers are prioritising corn because returns are about three times higher than production costs, while input costs are lower than for boro rice and vegetables grown in the same season.

Banks will be borrowing and lending among themselves for the short-term, using a new transaction-based reference rate from Wednesday.

At a press conference at its headquarters in Dhaka yesterday, the Bangladesh Bank (BB) announced the shift away from the long-standing practice of relying on quoted rates under the Dhaka Interbank Offered Rate (DIBOR).

Instead of simply using the rates banks said they would charge, the new framework draws on actual transactions to determine borrowing costs.

The new system is meant for improving transparency and efficiency in the money market. It also brings Bangladesh into line with global benchmarks such as the Secured Overnight Financing Rate (SOFR), published daily by the New York Fed and widely used in international markets.

Similarly, the BB will publish the new reference rates regularly on its website from Wednesday.

DIBOR, introduced in 2010, was based on rates banks reported for lending to one another. Over time, however, the system showed its weaknesses. Many commercial lenders did not provide data consistently, meaning the rate often failed to reflect real market conditions.

Under the new automated system, the BB will rely on actual interbank transactions and two new benchmark rates -- the Bangladesh Overnight Financing Rate (BOFR), and the Dhaka Overnight Money Market Rate (DOMMR).

BOFR is a secured, or risk-free, rate derived from interbank repo transactions. In a repo deal, one bank sells government securities to another with an agreement to buy them back later at a slightly higher price. The securities act as collateral, reducing the risk for the lender.

DOMMR, by contrast, is based on unsecured call money transactions. In this market, banks lend to one another for very short periods without providing collateral, relying instead on mutual trust and liquidity needs.

BOFR will be available for overnight and one-week tenors. DOMMR will cover overnight, one-week, one-month and three-month tenors.

According to the central bank, these rates will be calculated using a volume-weighted mean method so that larger transactions carry greater weight in the final figure.

This means if one bank borrows Tk 100 crore and another borrows Tk 5 crore, the larger deal will have a proportionately bigger influence on the average rate.

To prevent unusual deals from skewing the outcome, the BB will apply statistical techniques to filter out outliers.

For example, an exceptionally high lending rate on a single transaction would not be allowed to distort the benchmark. Similarly, if trading is thin on a particular day, the calculation will draw on data from recent working days to ensure stability.

The central bank expects the new framework to provide a dependable benchmark for pricing loans, bonds and floating rate instruments, and to support the development of new investment products.

Officials said the rates have been tested on a trial basis since March. They added that the system will be refined through regular monitoring and annual reviews.