Budget-support funding from foreign financiers seems drying up as only US$750 million has so far been confirmed although the financial year nears end with the economy facing unanticipated shocks amid global crises. Economic analysis reports

The country faces severe fund shortages caused due to heightened subsidy pressure amid the ongoing Mideast mayhem.

Finance Ministry officials say at least two major development partners have deferred talks on providing budget-support credit under regular arrangement and so they are now pursuing the financiers for lending the money in emergency balance-of-payments support.

According to them, the only development partner having confirmed budget support worth $750 million on completion of negotiations is the Asian Development Bank (ADB). The proposal will now be placed in board meeting early May, and if passed, the loan agreement will be signed when ADB President Masato Kanda visits Dhaka late next month.

Confronting such a situation at the very outset, the new government is also trying to secure an additional $250 million from the ADB to finance the additional spending incurred due to the fallouts from war and conflicts in the Middle East that force buying fuel oils and gas at excessive prices.

Sources have confirmed that the World Bank has rejected a government proposal for $250 million in budget-support credit under regular arrangement. Now the finance officials are pursing the World Bank to provide some $500 million under emergency support to meet the deficit being created under war's domino effect.

Also, the Japan International Cooperation Agency (JICA) has deferred a planned budget-support programme until next fiscal year, "leaving nothing for this fiscal year", sources say.

A JICA team on April 29th is scheduled to meet with finance ministry officials to discuss financial assistances. Sources says the finance ministry officials may request the agency team to provide some $500 to $700 million as emergency assistance from the $10-billion fund Japan has created to help its Asian neighbours whose economy is reeling from severe crisis caused by the Iran war.

Sources say the government is also in talks with the Asian Infrastructure Investment Bank (AIIB) for $700 million worth of budget support. However, the confirmation of AIIB financing will depend on consent from the co-financer.

The finance officials are not sure until now whether the AIIB credit will be finally available or not within this fiscal year that expires in little over two months.

Finance and Planning Minister Amir Khasru Mahmud Chowdhury recently visited Washington, DC, to attend the Spring Meetings of the International Monetary Fund and the World Bank Group.

The IMF has yet to give confirmation as to whether two due tranches of an ongoing credit programme, amounting to $1.3 billion, will be released for Bangladesh within this fiscal year, 2025-26.Bangladesh economic statistics

As such, the finance minister, in meetings with top officials of the IMF and the World Bank in Washington, requested emergency assistance worth $1.0 billion each from them to offset the energy shocks of an unprecedented scale amid the blockade of the Strait of Hormuz and Iranian ports.

"All the development partners of Bangladesh are very positive to support us at this crisis moment," the minister told reporters after return from the United States. However, he wouldn't confirm how much assistance was secured so far.

"We are discussing with them emergency assistance," he says. In fiscal year 2024-25, Bangladesh had received around $3.0 billion as budget support from the development partners.

Dr. Zahid Hussain, a former lead economist at the World Bank's Dhaka office, told The Financial Express that getting budget-support credit from development partners in many aspects depends on government's "comfort position" with the IMF, which remains absent for a long.

"We need to cut budgetary spending as much as possible to face the crisis," he says, adding that containing spending will help lower import and thus the requirement of foreign currency will lessen.

He suggests maintaining exchange-rate flexibility and ensuring that no gap remains between domestic and international energy prices.

A US naval blockade of Iranian ports is likely to squeeze Iran’s oil output in the coming weeks but claims it will throw the Islamic republic into economic free fall remain premature, analysts say.

After weeks of bombing and counter-strikes, focus has shifted to the standoff in the Strait of Hormuz, which ordinarily carries around a fifth of the world’s oil and liquefied natural gas.

In response to Iran’s blockade of the strait since the start of the Middle East war, the US imposed a counter-blockade of the Islamic republic’s ports, a push to force its leaders into a compromise in peace talks.

That bid, however, looks set to fail, at least in the short term.

“If the blockade lasts for more than two or three months, it can cause more damage” to Iran, economic analyst and professor at Shahid Beheshti University in Tehran Saeed Laylaz told AFP.

“If Iran suffers any damage, the damage to the countries in the southern Persian Gulf will definitely be greater,” he added.

There’s a limit on how long Iran can bide its time, however.

Arne Lohmann Rasmussen, chief analyst at Global Risk Management said Iran “was expected to run out of storage capacity within approximately one month, but it may already be forced to shut in part of its oil production within a couple of weeks”.

‘COLLAPSING FINANCIALLY?’

Trump said Tuesday that Iran was “collapsing financially” under the blockade imposed by the US Navy on April 12, claiming that the country was “starving for cash”.

Treasury Secretary Scott Bessent said the blockade meant storage at Iran’s Kharg Island, the main export terminal through which most of the country’s crude is shipped, “will be full and the fragile Iranian oil wells will be shut in”.

Jamie Ingram, managing editor of Middle East Economic Survey (MEES), told AFP it was likely the timeline for Iran to hit its oil storage limits would be measured in “weeks rather than days”.

He added it was likely that “Iran will slightly reduce production before getting to the stage where storage constraints start to bite”.

According to analysis by oil expert Homayoun Falakshahi shared by energy intelligence firm Kpler, Iran’s crude production has already slowed since the start of the war.

Output fell by around 200,000 barrels per day in March to 3.68 million bpd and is expected to drop a further 420,000 bpd in April to about 3.43 million bpd, reflecting “the broader impact of export disruptions and refining constraints linked to the ongoing conflict,” Falakshahi said.

But Laylaz in Tehran said beyond the psychological effect of the blockade, the “real material effect has been small so far”.

Ingram said Kharg Island “shouldn’t be a particular bottleneck,” for Iran.

“This is the final storage facility used before oil is exported and Iran can divert crude oil to other facilities rather than straight to Kharg,” he said.

‘MUTUALLY ASSURED DISRUPTION’

The MEES expert also said Iran’s dependency on oil exports via Hormuz had “deepened due to the damage caused by US and Israeli strikes to other sections of the Iranian economy”.

“But Iran has also proven its ability to withstand huge oil-revenue declines during previous rounds of sanctions. I would not underestimate the regime’s resilience in this regard,” he added.

As the initial two-week truce between Iran and the US was set to expire Trump had said Tuesday he would maintain the ceasefire to allow more time for peace talks.

Iran said it welcomed the efforts by mediator Pakistan but made no other comment on Trump’s announcement, while vowing not to reopen Hormuz so long as the US blockade remains in place.

“It will take a long time before such economic pain forces Iran to compromise,” Ingram said, explaining it is “more likely economic disruption... pushes China into exerting more pressure on Iran to negotiate”.

Ali Vaez, Iran project director at the International Crisis Group, said “Iran’s economy was battered before the war, is contending with added strains caused during it, and now faces the combination of sanctions, seizures and potential strikes”.

“Iran’s leadership has previously shown a high threshold for pain even if the pressure on ordinary Iranians increases. It also likely calculates that its own efforts to subdue traffic through Hormuz act as a sort of mutually assured disruption,” he added.

Demand for rooftop solar systems across Europe has surged since the start of the Iran war, as households rush to shield themselves from soaring power prices triggered by the worst global energy disruption in history.

The ​conflict has pushed oil, gas and electricity prices sharply higher, hitting companies and households alike and accelerating efforts to find cheaper alternatives and reduce exposure to volatile energy ‌markets.

Solar is among those options, with demand from homeowners more than doubling for some industry players since the war began in late February, according to interviews with more than half a dozen energy equipment wholesalers and renewable utilities in Germany, Britain and the Netherlands.

It’s a timely boost for a technology that accounts for about a third of Europe’s total power capacity, but saw the pace of new installations dip last year for the first time in ​nearly a decade. Industry advocates argue Europe still needs to do far more to cut its reliance on imported oil and gas.

“The war has merely exposed the problem that has ​existed all along: energy dependency,” said Janik Nolden, co-founder of German privately owned solar equipment wholesaler Solarhandel24, adding European governments had been “walking into a trap”.

Solarhandel24 said net sales more than tripled in March to nearly 70 million euros ($82 million) from a year earlier, and are expected to triple again this month to ​as much as 60 million euros. The company plans to expand its workforce by about 85 people, roughly a third, to cope with demand.

To secure supply, Solarhandel24 has stocked up around half a ​million solar panels in recent weeks - a costly decision, Nolden said, but one he sees as worthwhile given the potential for net sales to rise to around 400 million euros in 2026 from about 250 million euros last year.

Germany’s Enpal is seeing a similar trend. The energy firm said orders rose 30 percent year-on-year in March to 130 million euros, while April was on track for a 33 percent increase to about 120 million euros, driven by rooftop ​solar installations.

“This is about European resilience,” said Enpal CEO and founder Mario Kohle. “We are seeing this trend in the defence sector too. Just as Europe must be able to defend itself, we must ​be able to supply our own energy.”

The financial figures from Solarhandel24 and Enpal have not been previously reported.

While aggregated installation data for Europe are not yet available, industry associations in Germany and the Netherlands have confirmed ‌a pickup ⁠in demand since the war began.

Executives say homeowners are increasingly opting for full systems combining solar panels - nearly 90 percent of which are supplied by China - with batteries and electric-vehicle wallboxes, allowing surplus power to be stored and used later.

That trend is also lifting demand for energy storage technologies, which Holland Solar’s Wijnand van Hooff says is seeing demand increases of 40 percent-50 percent.

“This cannot be explained by purely seasonal factors,” said Filip Thon of E.ON (EONGn.DE), , Europe’s largest energy network operator, which also sells rooftop solar systems. Customer requests, he said, have nearly doubled year-on-year.

A STRUCTURAL SHIFT?

Some executives also point to upcoming changes ​to Germany’s renewable energy law as an additional ​driver of demand for rooftop installations, which ⁠typically cost between 10,000 and 20,000 euros for an average family home.

The war-driven surge comes after the pace of new European solar installations slowed, in 2025, according to industry lobby SolarPower Europe, with weak residential demand a key factor following the phase-out of support schemes.

Shares in SMA Solar (S92G.DE), , the world’s third-largest ​solar inverter maker and one of the few remaining European equipment producers, have risen about 50 percent since the war began. The company has ​also reported an uptick in ⁠demand.

“We view the spike in demand as a structural shift that current geopolitical events are accelerating, not creating,” said Ed Janvrin, who heads the solar and heating business at Britain’s OVO Energy, adding April sales in the division were roughly 10 times higher than a year earlier.

Chinese solar manufacturers, however, say any war-related boost in global demand is unlikely to significantly ease the sector’s overcapacity, with China alone having enough ⁠manufacturing capacity to ​meet this year’s expected global demand nearly twice over.

Even so, the surge highlights how geopolitical shocks can rapidly reprice ​the value of renewables, said Jannik Schall, co-founder of German renewables firm 1Komma5Grad, noting that solar demand during the 2022 energy crisis had been even stronger.

“The recurring energy crises prove the renewables sector right.”

When the International Monetary Fund (IMF) released its latest World Economic Outlook (WEO) database on April 14, one data point quickly made its way through financial markets and newsrooms.

Bangladesh is projected to record a higher gross domestic product per capita than India in 2026, measured in current US dollars. The forecast puts Bangladesh at $2,911 per person against India at $2,812. The difference is small in absolute terms, but its symbolism is significant.

India’s economy, valued at $3,916 billion in 2025, is roughly eight times the size of Bangladesh’s $458 billion. It is also one of the most closely watched growth stories in the world. Yet on this narrow measure, the smaller neighbour appears set to edge ahead.

The reaction in India was swift. Kaushik Basu, former chief economist of the World Bank, described the development as "shocking". Indian commentators debated whether the figure reflected a deeper structural divergence or merely a statistical quirk.

The answer, as is so often the case with economic data, is: both.

Measured in current dollars, Bangladesh led India in per capita income for seven years from 2018.

India moved ahead in 2025 after the Bangladeshi taka weakened sharply. This is not without precedent.

Bangladesh was also ahead of India in per capita GDP between 1989 and 2002.

India then pulled in front for around 15 years before slipping below Bangladesh in 2018.

The rupee's own depreciation against the dollar in the subsequent period then swung the comparison back.

According to the latest projections, Bangladesh is set to move ahead in 2026 by roughly $100 per person.

The IMF expects India to regain the lead in 2027 and to remain ahead at least until 2031.

To understand why this measure is so volatile, consider the arithmetic.

GDP per capita in current dollars is calculated by converting each country's output into US dollars at the prevailing exchange rate.

When a currency depreciates — as both the taka and the rupee have done in recent years, though at different speeds — it compresses the dollar value of output regardless of how productive the underlying economy has become.

The crossing of the two lines in 2026, seen on any given screen, tells us something real: that exchange-rate dynamics now place the two economies' dollar incomes within touching distance of each other. It does not, on its own, tell us which population is better off.

The second measure complicates the picture considerably. The IMF also publishes GDP per capita adjusted for purchasing power parity (PPP), which strips out exchange-rate movements and instead converts output into a common "international dollar" based on what each currency can actually buy domestically.

On this basis, India leads Bangladesh by a wide margin — and always has in the modern era.

In 2025, India's PPP-adjusted GDP per capita stands at $11,789 — some 15 percent above Bangladesh's $10,271.

By 2031, the IMF projects the gap will widen to nearly 24 percent, with India reaching $18,485 against Bangladesh's $14,857.

Nearly 1.6 crore people in Bangladesh faced high levels of acute food insecurity in 2025, placing the country among the top ten nations with the largest number of people struggling to secure enough food, according to the latest Global Report on Food Crises.

The 2026 report, published by an alliance of UN agencies, the European Union and other partners, said that food conditions in those ten worst-affected countries are unlikely to improve this year.

Together, including Afghanistan, Myanmar and Pakistan, they accounted for two-thirds of the 26.6 crore people worldwide who experienced acute food insecurity last year.

The other countries on the list are the Democratic Republic of the Congo, Nigeria, South Sudan, Sudan, the Syrian Arab Republic and Yemen.

The report said chronic economic weakness continues to erode resilience at both household and national levels.

"Half of the world's poorest people live in five countries, three of which -- Bangladesh, the Democratic Republic of the Congo and Nigeria -- are in protracted food crises," it said.

Acute food insecurity occurs when one or more dimensions of food security, including availability, access, utilisation and stability, are disrupted to a degree that threatens lives or livelihoods.

Despite the scale of the challenge, Bangladesh recorded progress. The number of people facing acute food insecurity fell by 32 percent in 2025 compared with the previous year, with no major natural disasters reported.

The report, however, highlighted worsening conditions among forcibly displaced Myanmar nationals in two districts, amid a fresh influx of Rohingya refugees, flooding and cuts to humanitarian assistance.

Bangladesh is also listed among countries facing a moderate nutrition crisis, alongside Niger, parts of Nigeria and Sudan, and the Syrian Arab Republic, even as overall food security indicators improved.

Qu Dongyu, director-general of the UN Food and Agriculture Organization (FAO), said acute food insecurity had become structural rather than temporary. "Acute food insecurity today is not just widespread -- it is also persistent and recurring.”

Conflict remained the primary driver, accounting for more than half of all people facing severe hunger. More than 39 million people in 32 countries faced emergency levels of food insecurity, while the number experiencing catastrophic hunger had risen ninefold since 2016.

Children bore a heavy toll. In 2025, 35.5 million children were acutely malnourished, including nearly 10 million suffering from severe acute malnutrition.

Ricardo Pires, spokesperson for the UN Children's Fund (Unicef), warned that children with severe wasting faced heightened mortality risk, as weakened immune systems left them vulnerable to ordinarily non-fatal illnesses.

UN Secretary-General António Guterres, writing in the foreword, called for scaled-up investment in aid and an end to the conflicts driving the crisis.

The report also states that the outlook for 2026 remains bleak. Ongoing conflict, climate shocks, economic instability and Middle East-linked supply chain disruptions are expected to sustain critical food insecurity levels across multiple countries.

Bangladesh’s macroeconomic outlook is fragile as it faces three concurrent adverse external headwinds, including the Middle East crisis and the country’s impending graduation from the least developed country (LDC) category, said the Policy Research Institute (PRI) of Bangladesh yesterday.

Presenting the institute’s Monthly Macroeconomic Insights at its Dhaka office, Principal Economist Ashikur Rahman said uncertainty around US tariff policies is another factor casting a shadow over the economy’s prospects for a faster recovery.

“These shocks are feeding through energy prices, weakened trade flows, and supply chain disruptions, with broad economy-wide implications,” he said.

At the same time, pressure is building on the balance of payments amid weaker exports and higher energy costs, with limited policy buffers heightening overall vulnerability amid the US-Israel war on Iran.

Rahman noted that around 31 percent of Bangladesh’s energy imports originate from the Middle East, largely transiting the Strait of Hormuz. A study by Zero Carbon Analytics found that severe price shocks could raise the country’s energy bill by 40 percent to $16-$17 billion in the ongoing fiscal year 2025-26 (FY26).

The PRI economist noted that Bangladesh has seen a fragile recovery over the 18 months to February 2026, with reserves rising from about $18 billion to $30 billion, inflation easing to 8-9 percent, and deposit growth strengthening.

“Yet, this recovery was underpinned by core vulnerabilities,” said Rahman, noting growth slowed to 3 percent in the second quarter of FY26, the weakest since Covid. Non-performing loans stand at around 30 percent, dampening private credit growth to 6 percent, while limited fiscal space is pushing the government toward costly bank borrowing.

Against this backdrop, Rahman warned that rolling back reforms now would be self-defeating. “If we step back from economic reforms at this stage, it would be an economically suicidal decision. It must be treated as a national economic imperative.”

The reforms, he stressed, should not be framed as conditions set by the International Monetary Fund (IMF). “These are essential for strengthening our own economy and ensuring long-term growth.”

ICC Bangladesh President Mahbubur Rahman, speaking as the chief guest, said persistent uncertainty is making it harder for businesses to plan.

He pointed to a disconnect between policy direction and business expectations as a drag on private investment — and, by extension, on foreign direct investment. “In Bangladesh, politics and business often operate in parallel rather than in coordination. In reality, they should be deeply interconnected. Government, businesses, and investors are part of the same ecosystem.”

Besides, he said weak domestic investment is also constraining foreign direct investment inflows. “Local investment is not picking up, and naturally that raises a question: how will foreign direct investment come if domestic investors themselves are hesitant? Even machinery imports are declining because investors lack confidence.”

Uncertainty over energy supply and financial sector risks are key concerns, he said. “There is deep uncertainty among investors about whether they will get gas or electricity tomorrow. This lack of predictability is holding back decisions.

“On top of that, fears of becoming loan defaulters and difficulties in accessing finance are further increasing risk perception.”

Khondokar Shakhawat Ali, a visiting research fellow at the BRAC Institute of Governance and Development at BRAC University, stressed that economic stability requires structural reforms rather than short-term fixes.

He also pointed to the close nexus between political actors, bureaucrats, and sections of the private sector, saying, “It has blurred lines of responsibility and made reform more urgent.”

With Bangladesh facing both internal and external shocks, he cautioned that without prudent fiscal management, the country risks sliding into a deeper economic crisis.

Meanwhile, highlighting rising external risks, PRI Chairman Zaidi Sattar said geopolitical tensions, particularly around the Strait of Hormuz, are posing systemic risks to global supply chains and fertiliser trade.

“Rising food, fuel, and fertiliser prices are pushing up import costs and intensifying inflationary pressures,” he said.

On Bangladesh’s LDC graduation, he said preparedness remains limited due to gaps in export diversification and competitiveness.

He also noted slow reform progress, stressing that “comprehensive tax reform is essential to strengthen domestic resource mobilisation.”

Former National Board of Revenue (NBR) chairman Muhammad Abdul Mazid said revenue reform is essential for economic stability, warning that delays will deepen fiscal risks.

“We must stop thinking that reforms are imposed from outside; these are reforms we need for our own survival,” he said, adding that continued failure to meet revenue targets is pushing the government into a cycle of borrowing that weakens the financial system.

“You cannot fix the economy without fixing the revenue system. This is where the foundation lies,” he said, noting that while reforms take time, postponing them will only raise long-term costs.

“If the economic ‘bleeding’ continues and we fail to act, recovery will become extremely difficult,” he added.

Top business leaders have urged the market regulator to be flexible on the use of initial public offering (IPO) funds for loan repayment, including allowing repayment of rescheduled loans amid a challenging business climate.

They made the request at a meeting organised by the Bangladesh Securities and Exchange Commission (BSEC) at its Dhaka office yesterday to discuss the use of IPO proceeds.

Syed Nasim Manzur, managing director of Apex Footwear Limited, said many countries, including neighbouring ones, do not impose restrictions on the use of IPO funds for loan repayment.

Considering global standards, the scope for using IPO proceeds to repay loans could be expanded, he added.

In 2025, the regulator introduced the Public Offer of Equity Securities Rules, 2025. Under the new rules, companies may use up to 30 percent of IPO proceeds for debt repayment or investment, subject to conditions.

For loan repayment, the borrowing must have been used for a company project, business, machinery, renovation or expansion, and an auditor report must confirm proper utilisation of the funds.

The loans being repaid cannot be classified or rescheduled. In other words, they must not be overdue or deferred because of repayment problems.

These provisions are stricter than those under the 2015 rules, which allowed up to one-third of IPO funds to be used for debt repayment or working capital without linking the loans to specific projects or imposing conditions on their classification status.

Riad Mahmud, president of the Bangladesh Association of Publicly Listed Companies, said even well-performing companies may incur losses because of global crises and economic challenges, and may have rescheduled loans.

It is not sufficient to follow strict policies based only on ideal situations; flexibility is also necessary considering real-world circumstances, he said.

Taking into account economic conditions and global crises, he called for allowing the repayment of rescheduled loans using IPO proceeds.

Mominul Islam, chairman of the Dhaka Stock Exchange, also spoke in favour of allowing IPO funds to be used for loan repayment.

Khondoker Rashed Maqsood, chairman of the BSEC, thanked stakeholders for their opinions and proposals. He said the regulator would evaluate their views and recommendations, adding that one of its key mandates is to protect investor interests in the capital market.

He said, “The commission will ensure overall market development while safeguarding investor interests.”

Maqsood also said efforts are ongoing to bring fundamentally strong companies to the capital market.

Tapan Chowdhury, chairman of the Central Depository Bangladesh Limited and managing director of Square Group, said regulators must assess whether IPO funds are used properly and whether they genuinely benefit the company or project.

He noted that many large and reputed groups in the country have highly ambitious projects, and merely relying on the group’s reputation should not justify using IPO proceeds to repay loans for such projects.

Abdul Hai Sarker, chairman of the Bangladesh Association of Banks, said a strong and developed capital market is an effective solution for maintaining competitiveness in the global market and ensuring economic growth.

He called for the proper development and expansion of the market.

Mashrur Arefin, chairman of the Association of Bankers Bangladesh, said companies should have an opportunity to restructure capital by repaying loans taken for productive or expansion purposes using IPO funds.

Considering the country’s economic conditions and various crises, he said loans that have not been rescheduled more than twice could be allowed under such provisions, while maintaining appropriate control mechanisms.

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry, Dhaka, said, “In the country, short-term deposits are being used to finance long-term investments. This practice should be discouraged, and long-term financing should be ensured through the capital market. To achieve this, policy and regulatory alignment are necessary.”

AKM Habibur Rahman, chairman of the Chittagong Stock Exchange, Saiful Islam, president of the DSE Brokers Association of Bangladesh, and senior BSEC officials also attended the meeting.

The European Union and United States signed an agreement Friday to coordinate on the supply of critical minerals needed for key industries including defense, as China's dominance becomes a growing concern.

The pact marks a rare embrace by President Donald Trump's administration of the role of the EU, which it often berates as it instead champions right-wing populists within Europe.

Flexing its muscle at times of tension, Beijing has restricted exports of critical minerals needed for products including semiconductors, electric vehicle batteries and weapons systems.

"The overconcentration of these resources, the fact that they're dominated by one or two places, is an unacceptable risk," US Secretary of State Marco Rubio said as he signed a memorandum of understanding with EU trade chief Maros Sefcovic.

Sefcovic told a separate press briefing that the agreement "formalizes our partnership across the entire value chain, from exploration and extraction to processing, refining, recycling and recovery."

On concerns that China could retaliate against a potential critical minerals deal involving multiple parties, Sefcovic said: "For us, it's really a matter of economic security. It's a matter of overcoming dependencies."

From recent experience, "we know how dependencies could be expensive, and we have a huge price tag for being dependent on the sources of our fossil fuels," he added.

"We simply want to learn from that experience and have a much more diversified portfolio of suppliers," Sefcovic said.

Rubio noted that the United States and the EU combined are "the largest customers and users" of critical minerals.

"We have to make sure that these supplies and these minerals are available for our futures and in ways that are not monopolized in one place or concentrated heavily in one place," Rubio added.

An action plan said that the EU and United States would explore setting minimum prices on critical minerals -- effectively preventing China or other outside powers from flooding the market with inexpensive exports.

They will also look at coordinating any subsidies and stockpiles of critical minerals, and could coordinate joint standards to ease trade across the Western world, and together invest in research.

The US Trade Representative's office said this plan will be the main mechanism to "coordinate trade policies and measures on critical minerals supply chains with a view to concluding a binding plurilateral agreement on trade."

The Trump administration has previously called for a preferential trade zone among allies on critical minerals.

Washington has also unveiled critical minerals action plans with Mexico and Japan, alongside a supply framework with Australia and others.

A surfeit of 'high-powered' money in the economy stokes concern about inflation upturn as reserve money more than doubled in terms of year-on-year growth as of February.Economic analysis reports

The central bank of Bangladesh has injected Tk 200 billion in printed money into

economy recently to feed government expenditure needs, economists say.

Bangladesh Bank officials, however, play down such concern as they claim the regulator has got a stronger rise in its net foreign assets (NFA), including foreign- exchange reserves, during the current fiscal year.

The increase in reserve, dubbed 'high-power money', signifies a sharp expansion of liquidity on the money market. Data released from the central bank show reserve money grew 13.35 per cent in February 2026, up from 6.16 per cent in the same month a year earlier.

The BB attributes the increase largely to a stronger rise in its net foreign assets, including foreign-exchange reserves, during the fiscal year 2025-26, compared with only a marginal increase in the previous year.

Reserve money is also referred to as the monetary base that comprises currency in circulation and commercial banks' reserves held with the central bank.

It forms the foundation of the broader money supply and can have significant implications for inflation and credit conditions, economists explain.Bangladesh economic statistics

People familiar with the developments told The Financial Express that the recent surge in the net foreign asset reflects sizeable dollar purchases by the Bangladesh Bank.

The central bank bought more than $5.50 billion from the market during the fiscal year, boosting its foreign-asset holdings and in turn expanding reserve money.

They also say inflows of foreign grants and assistance from some international lenders, for example, the World Bank and the Asian Development Bank, also contributed to the rise in net foreign assets in the state treasury.

Some economists strike a note of caution that the increase in high-powered money could add fuel to inflationary pressures if not managed carefully.

"We believe the situation remains under control," says Dr Md Ezazul Islam, director- general of Bangladesh Institute of Bank Management.

He says a potential increase in private-sector imports in the coming months could help moderate reserve-money growth.

Others appear more concerned about the inflationary impact.

"This helps explain why inflation is not easing," says Dr M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh.Financial news subscription

He adds that the central bank has recently injected around Tk 200 billion in the economy, amplifying liquidity through multiplier effects and contributing to persistent price pressures.

Stocks closed the week marginally higher, supported by bargain hunting in beaten-down equities, even as record-high fuel price hikes and persistent Middle East tensions cast a shadow over investor sentiment.

The benchmark indices managed to eke out gains as selective accumulation of undervalued stocks by tactical investors helped cushion broader market weakness.

Analysts noted that while geopolitical uncertainties continued to cloud the near-term outlook, resilient participation signalled underlying confidence in the market's medium-term trajectory.

The positive close came despite a significant headwind: the government on Saturday announced steep increases in fuel prices, pushing them to historic highs. Diesel was raised by Tk 15 per litre, octane by Tk 20, petrol by Tk 19, and kerosene by Tk 18, a move expected to exert inflationary pressure across supply chains and household budgets.

Despite energy price hike, the opportunistic investors engaged in bargain hunting while closely monitoring developments around the Middle East tensions.

The market opened the week on a cautious note, with the first two sessions closing lower as traders digested the fuel price shock and lingering uncertainty surrounding Middle East negotiations. However, sentiment pivoted mid-week following early indications of progress in ceasefire discussions.

Of the five trading sessions, the final three closed in positive territory, underpinned by renewed interest in high-quality large caps. Selective positioning in December-closing companies ahead of expected earnings announcements also supported the recovery.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) finally rose 42 points or 0.79 per cent to close at 5,299, after remaining flat the previous week.

The DS30 index, comprising blue-chip stocks, gained 25 points to close at 2,015, while the DSES index, tracking Shariah-compliant securities, edged up 0.21 point to 1,067.

Analysts said any tangible progress in US-Iran negotiations could restore investor confidence and trigger a short-term rally.

According to EBL Securities, the market demonstrated resilience with sustained two-way participation throughout the week. Still, investors largely maintained a cautious stance amid evolving macroeconomic and geopolitical developments.

The ongoing corporate earnings season is expected to play a key role in determining near-term market direction. Strong earnings, especially from banking and pharmaceutical sectors, could attract fresh investment, said the stockbroker.

Selective gains in blue-chip stocks, including BRAC Bank, City Bank, Asiatic Laboratories, Eastern Bank and Power Grid Company of Bangladesh, largely contributed to the index rise, jointly adding more than 27 points to the benchmark index.Bangladesh economic statistics

Market liquidity improved notably during the week. Total turnover on the DSE stood at Tk 45.16 billion, up from Tk 32.7 billion in the previous week, aided by an additional trading session.

Accordingly, average daily turnover rose 10 per cent to Tk 9.03 billion, compared to Tk 8.18 billion a week earlier.

Sector-wise, the engineering sector dominated turnover with 17 per cent share, followed by textile (13.4 per cent) and general insurance (12.2 per cent).

Market breadth remained positive, with 194 issues advancing, 168 declining and 35 remaining unchanged out of 390 traded securities. Among sectors, general insurance posted the highest gain of 5.8 per cent, followed by power, telecom, food, non-bank financial institutions and banking.

City Bank topped the turnover chart with shares worth Tk 1.6 billion changing hands, followed by Dominage Steel, Acme Pesticides, Khan Brothers and Summit Alliance Port.

The Chittagong Stock Exchange also closed the week slightly higher. Its All Shares Price Index (CASPI) rose 70 points to 14,832, while the Selective Categories Index (CSCX) gained 52 points to close at 9,093.

The port city bourse recorded a turnover of Tk 1.46 billion, with 48.4 million shares and mutual fund units traded during the week.

Citing three major economic challenges, the government has prepared its position paper ahead of a United Nations hearing on Bangladesh’s request to defer its graduation from the least developed country (LDC) category.

In a virtual meeting of the United Nations Committee for Development Policy (UNCDP) on April 29, Bangladesh will seek a three-year deferral of its scheduled graduation in November this year.

Dhaka plans to highlight a serious gap in preparedness, incomplete core reforms and the economic fallout from the US-Israel war on Iran as key reasons for postponement.

In addition, Bangladesh will raise concerns over vulnerabilities in the financial sector, weaknesses in the banking system, an export slowdown due to volatile global supply chains, high interest rates and an uncertain business and investment climate, said Md Abdur Rahim Khan, additional secretary to the commerce ministry.

Khan, who is also in charge of the commerce secretary, told The Daily Star over the phone that Bangladesh’s case for deferment has strengthened after Nepal, another South Asian LDC set to graduate, also applied to the UN for a three-year extension.

Bangladesh, Nepal and Lao PDR are scheduled to graduate from LDC status on November 24 this year. However, Bangladesh and Nepal have now sought to delay the transition until 2029, citing domestic and external economic pressures.

Earlier on February 19, the newly elected government sent a letter to Jose Antonio Ocampo, chair of the UNCDP, requesting that the preparatory period be extended until November 24, 2029, mentioning that more time is needed to ensure readiness.

Following Bangladesh’s request, the UNCDP discussed the issue at its annual meeting in February and agreed on a process to assess the proposal.

The UNCDP has now called a public hearing on Bangladesh’s request on April 29. After the hearing, the committee will submit its recommendations to the United Nations Economic and Social Council (ECOSOC) in June.

ECOSOC will then forward its assessment to the United Nations General Assembly (UNGA), which is scheduled to meet in September. The final decision on the deferment will be taken through a vote at the UNGA.

A UN assessment report last month said Bangladesh still faces serious gaps in its readiness for graduation, as its economy continues to be affected by both domestic and international shocks, including the US-Israel war on Iran.

The report highlighted a series of disruptions between 2017 and 2026, including climate vulnerability, the Rohingya crisis, a prolonged macroeconomic slowdown that predated the regime change, the Covid-19 pandemic, the Russia-Ukraine war, inflation, and pressure on the balance of payments.

It also noted that while Bangladesh meets all three criteria for graduation, significant risks persist, including the loss of trade preferences, fiscal and financial vulnerabilities and weak institutional coordination.

The report stressed the need for urgent reforms, stronger implementation capacity, adequate policy space and a whole-of-society approach to ensure a smooth and sustainable transition.

It added that a difficult political changeover and prolonged macroeconomic stress have eroded socio-economic gains, increasing risks linked to graduation.

Rising import costs for fossil fuels have created operational constraints, with gas shortages worsening due to the Middle East conflict, the report said. Economic growth slowed from 7.1 percent in FY22 to 3.5 percent in FY25, weakening momentum ahead of graduation.

Inflation has outpaced wages, pushing millions into hardship and vulnerability.

Private investment has also weakened, with capital machinery imports falling from $5.1 billion to $2.8 billion during the 2019-2024 period. The labour market has also come under pressure, with nearly 1.9 million jobs lost between 2023 and 2024, disproportionately affecting women.

The Bank Resolution Act-2026, passed with new provisions added overnight, is effectively rehabilitating bank looters and putting the entire banking sector at risk, economic experts, academics, and activists said yesterday.

Clause 18(a) of the law could allow those who previously looted the sector in a planned manner to regain ownership, the speakers warned at a roundtable organised by Voice for Reform at the BDBL building in Karwan Bazar, Dhaka.

Badiul Alam Majumdar, secretary of Shushashoner Jonno Nagorik (Shujan), noted that many of those who looted the sector are yet to be brought to justice.

He said all masterminds behind the takeover of Islami Bank Bangladesh, including S Alam, should be held accountable.

He outlined three steps needed to put the banking sector on a firm footing. First, identifying and ensuring exemplary punishment for perpetrators of banking fraud. Second, implementing systemic reforms such as cashless transactions to prevent recurrence. Lastly, completing institutional reforms, including making Bangladesh Bank an independent constitutional body.

AKM Waresul Karim, dean of the School of Business and Economics at North South University, said the government had resorted to “very low-grade tactics” over the proposed ordinance.

He criticised the Bank Resolution Act as one of its provisions allows shareholders who held ownership immediately before a bank was placed under resolution to apply for reinstatement.

He said the provision blocks the return of long-standing institutional owners like Kuwait Finance House while opening the door for those who acquired ownership by creating “pressure through the DGFI” or through other unethical means.

Toufic Ahmad Choudhury, former director general of the Bangladesh Institute of Bank Management (BIBM), called for bringing willful defaulters to book, saying that no resolution measures would yield results unless those responsible for the current crisis are punished.

He also cautioned that rescheduled loans should not have their default status changed until fully repaid – a rule routinely flouted as elections approach, when defaulters reschedule debts.

“Through this process, they remove themselves from the list of defaulters and become ‘regular’ borrowers. Subsequently, they take the opportunity to secure hundreds of crores of taka in additional loans from the same banks,” he said.

Shawkat Hossain Masum, head of online at Prothom Alo, said it was inevitable that some banks in the country would reach the point of insolvency.

He stated that in November 2022, the central bank claimed that there were no problems in the banking sector, even though the real situation was more or less known to everyone. “It was not that Bangladesh Bank was unaware; rather, it was either helpless in the face of politicisation, complicit in it, or both.”

He claimed that the interim government opted for merging troubled banks as “no government wants to bear the stigma” of closing banks.

Considering various realities, he said merging two weak banks and making the initiative successful is already very difficult. “Expecting five weak banks to merge and succeed together is a very remote aspiration.”

Meanwhile, Professor Mushtaq Khan of SOAS University of London said the interim government should have nationalised or confiscated assets of individuals involved in bank looting.

“Failing to do so was a major mistake,” he said, noting that the manner of the looting makes recovery through collateral seizure difficult.

Sarwar Tusher, a joint convener of the National Citizen Party (NCP), accused the current BNP-led government of setting “extreme examples of politicisation” in the economy within two months of taking office.

Criticising BB Governor Md Mostaqur Rahman, the NCP leader said the governor was a “politically affiliated individual” who reportedly has “past links with S Alam”.

He went on to allege that several ministers of the new government have connections with the controversial business group, warning that a major crisis in the banking sector, similar to that in the energy sector, may be imminent.

Shams Mahmud, former president of the Dhaka Chamber of Commerce & Industry, said Islami Bank was captured through the stock market.

Instead of direct acquisition as entrepreneurs, the bank’s shares were quietly purchased through various anonymous groups and later transferred to a specific group, he added.

“Even if the front door is closed through banking laws, such looting cannot be stopped if the back door, like the stock market, remains open,” said Mahmud.

Asif Khan, president of CFA Society Bangladesh, suggested issuing long-term bonds to depositors as an immediate measure to heal the deep wounds in the banking sector.

He said that while small depositors could be fully repaid, larger depositors might need to accept some “haircut,” or partial losses.

Bangladesh’s mobile and broadband internet services rank among the worst in the world despite a large subscriber base, and a connectivity-led reform plan is being prepared to address the challenge, Rehan Asad, the prime minister’s adviser on telecom and ICT, said yesterday.

Speaking at a seminar titled “New Telecom Policy: Expectations of Entrepreneurs”, organised by the Telecom and Technology Reporters Network Bangladesh, he said the government sees better connectivity as the key to solving long-standing structural problems in the sector.

“Nothing is more important than connectivity for this government. And that connectivity means both mobile and broadband services. It is not either-or -- it is both,” he said.

Asad said Bangladesh is among the top 10 countries by mobile subscriptions, but service quality remains very poor.

“Even in South Asia, Nepal and Bhutan are ahead of us,” he said.

He added that broadband services are also weak. “In broadband, we are in an equally bad or worse position -- 141st out of 153 countries in terms of service quality,” he said.

“These are not my findings. They come from global reports by GSMA and the International Telecommunication Union,” he added.

He said the government plans to fix these problems by rapidly expanding mobile and broadband infrastructure.

“We want to connect 90 percent of the population with 5G and provide 100 Mbps internet to 90 percent of users,” he said.

He said the goal is to ensure consistent internet service across both urban and rural areas, so users no longer face uncertainty in accessing basic connectivity.

The second priority is to build a unified digital ecosystem through a nationwide digital identity system.

He explained that each citizen will receive a digital ID linked to a digital wallet that can connect with banking and mobile financial services.

The government is studying global models such as Singapore’s Singpass and Estonia’s digital system, with plans to begin rollout within the next 12 to 18 months.

The third priority is to turn Bangladesh into an AI-enabled economy, he said, adding that artificial intelligence will be introduced in education and industry.

The fourth priority is reforming the telecom tax system.

“When someone recharges Tk 100, they receive only Tk 62 worth of service. The remaining Tk 38 goes to the government,” he said.

“We want to examine the whole value chain so that a person can receive Tk 80 to Tk 90 worth of service.”

He added that Bangladesh is the third-largest collector of telecom taxes globally, which also affects affordability, including access to smartphones.

Asad said the reforms will require coordination between industry players and government agencies, and that discussions with stakeholders are already underway.

Not all problems will be solved immediately, he said, adding that the current work marks the start of a longer reform process.

Sumon Ahmed Sabir, deputy managing director of Fiber@Home, said at the event that policies and guidelines enacted by the interim government unfairly allowed foreign entities to obtain licences across multiple layers.

“The cross-layer empowerment of foreign entities could ultimately lead to ‘super-dominance’ in mobile infrastructure by one or two companies,” he said.

He also warned of risks to national security and data governance.

Some representatives of local companies at the event also alleged that the Bangladesh Telecommunication Regulatory Commission (BTRC) formulated policies and guidelines without adequate consultation with industry stakeholders.

Md Emdad Ul Bari, chairman of the BTRC, stated that their claims were unfounded.

BTRC had conducted extensive consultations with industry players, academia, and government bodies during the policy formulation process, he said.

Bari added that the primary objective of the regulator was to ensure that the policies serve the industry as a whole.

He also noted that the guidelines and policies are currently being reviewed again, in consultation with the newly elected government.

Reinstating the package-VAT system to bring marginal businesses under the tax net is now under active consideration of the government, as compliance with the existing value-added-tax regime remains weak, sources say.

Officials at the National Board of Revenue (NBR) say the move is being made targeting the small and informal businesses that struggle to maintain proper accounts under the current VAT framework.

Package VAT is a fixed monthly amount paid by businesses, typically through their trade associations. The system was abolished in June 2019 following the introduction of the new VAT and Supplementary Duty Act and the VAT Online Project, which aimed to digitise tax collection.

However, NBR officials now acknowledge that bringing businesses in growth centres and retail hubs onto the VAT net has proven difficult, leading to significant revenue losses from the large informal sector.

The existing system, too, has been criticised for giving "discretionary powers" to field-level VAT officials to assess sales and determine payable value-added tax-- often resulting in harassment and allegations of corruption.

"We are overhauling the VAT law to make compliance easier for small and medium enterprises," NBR Chairman Abdur Rahman Khan told members of the Economic Reporters Forum (ERF) at a pre-budget meeting with Finance Minister Amir Khosru Mahmud Chowdhury. Personalfinance advice

"We have not yet been able to effectively implement the standard 15-percent VAT rate. Now we are compiling data on marginal and new SMEs to bring them under a fixed VAT system," he says.

The VAT base remains significantly smaller than the income-tax base, with only about 0.8 million VAT-registered entities compared to 12.8 million income taxpayers, Mr Khan points out the mismatch.

Business leaders have welcomed the proposed move but urged caution in setting the VAT amount.

Md Zahirul Haque Bhuiya, Secretary-General of the Bangladesh Dokan Malik Samity, also acknowledges that the government currently earns little revenue from sectors previously covered under package VAT. Bangladeshtravel guideBangladesh market analysis

However, he warns that excessive rates could discourage compliance.

"When the package VAT was increased sharply -- from Tk 4,200 to Tk 28,000 annually -- many small businesses dropped out of the system," he says .

Efforts to digitise VAT collection through Electronic Cash Registers (ECR) and the Electronic Fiscal Device Management System (EFDMS) have also failed to significantly improve revenue mobilisation from small businesses, he adds.

NBR data show that package -VAT collection had declined steadily before its abolition.

Revenue stood at Tk 23.81 billion in the fiscal year 2015-16 but dropped to Tk 18.91 billion in FY2016-17 after the rate was doubled. Collection had reached a rock-bottom Tk 11.75 billion until February of FY2018-19.

Under the previous system, VAT was fixed based on business location. Annual rates were set at Tk 28,000 for Dhaka and Chattogram city corporations, Tk 20,000 for other city corporations, Tk 14,000 for district towns, and Tk 7,000 for other areas.

Earlier rates ranged between Tk 3,600 and Tk 14,000 before being doubled in FY2016-17.

Business owners allege that corruption among field-level officials also contributed to the decline in compliance.

Solaiman Parsee, a trader in Old Dhaka, says many businesses were willing to pay VAT but were "discouraged by officials seeking bribes".

"A section of VAT inspectors often persuades traders not to pay the official amount and instead demands informal payments," he says about the deprivation of state exchequer by such taxmen who line their own pockets.

He argues that the fixed VAT is not burdensome, noting that the highest annual rate translates to around Tk 76.71 per day.

He also suggests making Business Identification Number (BIN) mandatory to prevent misuse of the system.

However, some experts would like to dislike the reintroduction of package VAT over again.

Dr Abdur Rouf, chairman of the VAT Forum, says the government should prioritise helping small businesses grow instead of imposing fixed taxes.

He also recommends scrapping the turnover tax, arguing that it generates minimal revenue while adding to compliance burdens.

He opines that rather than introducing package VAT, "it shall be much expedient to remove the existing Turnover Tax since collection of TT is less than one -core taka annually, a very insignificant amount".

"Then a good number of SMEs shall go beyond VAT net but government will lose nothing."

He further suggests reduction in trade VAT to 3-5 per cent and abolition of Advance Tax at import stage which is trade VAT in other words.

He thinks introduction of package VAT will seriously undermine the objective of standard VAT and give rise to manifold complications at the field level without any significant impact on VAT collection.

Bangladesh and Ethiopia have agreed to elevate their bilateral relations to a higher level through enhanced economic cooperation.Economy news updates

Foreign Minister Dr Khalilur Rahman, now visiting Ethiopia, held a meeting with Minister of Foreign Affairs Gedion Timothewos and discussed issues of mutual interest.

The two Ministers exchanged views on areas of cooperation in both bilateral and multilateral relations, said the Ministry of Foreign Affairs of Ethiopia.

Gedion noted that Ethiopia continues to register sustained economic growth and invited Bangladeshi companies to engage in priority investment sectors identified by the Government, including renewable energy generation, agro-processing, the pharmaceutical and medical equipment manufacturing industries, as well as the broader manufacturing sector.

Minister Dr Khalilur underscored his country’s commitment to further strengthening bilateral relations with Ethiopia, particularly in the areas of trade and investment cooperation.

US stock futures rose and the dollar wavered on Wednesday after President Donald Trump said he would indefinitely extend the Iran ceasefire, keeping sentiment buoyed, although with the Strait of Hormuz still closed, oil prices stayed near $100.

Trump's announcement appeared to be unilateral, and it was not immediately clear whether Iran, or US ally Israel, would agree to extend the ceasefire, which began two weeks ago.

Markets took the latest development in stride as investors weighed the extension with no signs of resumption in talks yet. Iran had rejected a second round of negotiations before Trump's announcement.

S&P futures EScv1 rose 0.4% while Nasdaq futures NQc1 gained 0.5%. European futures STXEc1 eased 0.3% pointing to a subdued open.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.7% after hitting a seven-week top on Tuesday. Japan's Nikkei .N225, South Korea's KOSPI .KS11 and Taiwan stocks .TWII hit record highs on renewed AI wagers.

Thomas Mathews, head of markets for Asia-Pacific at Capital Economics, said the earlier ceasefire was widely seen as indefinite so it was not surprising the latest announcement had not moved markets much.

"Obviously, any news on the re-opening of the Strait is a good candidate for the next big market flashpoint," Mathews added.

Hormuz remains key

After a sharp selloff in March due to the war in the Middle East, markets across the globe have swiftly rebounded this month and are back at pre-war levels as the prospect of a peace deal and the ceasefire spurred a risk-on rally.

That has also left the US dollar, which benefited from safe haven demand in March, on the back foot, giving up most of its war-induced gains.

"It appears markets were right to assume peak war uncertainty is behind us," said Matt Simpson, a senior market analyst at StoneX. "Risk seems likely to remain buoyant and dips viewed favourably by equity bulls. The closure of the Strait of Hormuz is already priced in."

Trump said he would continue the US Navy's blockade of Iran's ports and shores. Tehran has effectively closed the Strait of Hormuz through which one-fifth of the world's energy supply usually flows, causing a global energy shock.

Oil prices swung between gains and losses, with Brent crude futures LCOc1flat at $98.47 per barrel. US West Texas Intermediate crude CLc1 futures slipped 0.25% to $89.45 a barrel. O/R

While oil prices have come down from their March peaks they are still well above pre-war levels, worrying investors that elevated energy prices could quicken inflation and keep global rates higher for longer.

"We expect markets to remain volatile for now given the uncertainty with Hormuz and because the duration and scale of the crisis remain unclear," said Vasu Menon, managing director of investment strategy at OCBC.

Warsh senate appearance

Investors parsed comments from Federal Reserve chief nominee Kevin Warsh as he tried to assure US senators considering his confirmation to lead the central bank that he would act independently of the White House.

Warsh said he had made no promises to Trump about cutting rates and called for a new approach to controlling inflation and a communications overhaul that could discourage his colleagues from saying too much about the direction of monetary policy.

Separately, data on Tuesday showed US retail sales rose more than expected in March as the war with Iran boosted gasoline prices and led to a record surge in receipts at service stations, while tax refunds underpinned spending elsewhere.

Bangladesh is witnessing a steady rise in remittance inflow, offering renewed support to the country's foreign exchange reserves and overall economic stability, officials and analysts observed.

According to data from Bangladesh Bank, the country has maintained a significant upward trajectory in remittance earnings over the last two fiscal years, achieving historic milestones that have surpassed all previous benchmarks.

During the 2023-24 fiscal year, the nation recorded $23.9 billion in inflows. Growth accelerated sharply in FY 2024-25, reaching a record high of $30.3 billion, which represented a year-on-year increase of more than 25 per cent.

The momentum has continued into the current 2025-26 fiscal year, with the July-March period alone bringing in $26.21 billion, compared to $21.79 billion during the same period in the previous year.

Most recently, data from July through April 20 of FY 2025-26 shows that remittance inflows reached $28,426 million, significantly outpacing the $23,666 million collected during the same timeframe last year.

The central bank has attributed the growth to a combination of incentives, stricter monitoring of informal transfer systems, and the gradual recovery of global labour markets.

Economists noted that remittance earnings remain one of the key pillars of Bangladesh's economy, alongside exports. The inflow has helped ease pressure on the balance of payments and stabilise the exchange rate amid ongoing global economic uncertainties.

The government has been encouraging migrant workers to send money through official banking channels by offering a 2.5 per cent cash incentive for sending money through formal channels.

Officials from the Ministry of Expatriates' Welfare and Overseas Employment mentioned that awareness campaigns and digital financial services have also contributed to the increasing trend.

Bangladeshi workers in the Middle East, Europe, and Southeast Asia continue to be the main contributors to remittance inflows. Countries such as Saudi Arabia, the United Arab Emirates, and Malaysia remain among the top sources.

Experts, however, emphasised the need for diversification of overseas job markets and skill development initiatives to sustain long-term growth in remittance earnings.

They also called for further reduction in transaction costs and expansion of mobile financial services to each rural household more effectively.

Renowned economist Dr Zahid Hussain stated that Bangladesh's macroeconomic stability has been restored, albeit modestly, and external indicators like the balance of payments and foreign exchange reserves remain in a comfortable position.

He credited the economy's current stability to the adoption of a flexible exchange rate system.

The economist said that the remittance surge played a crucial role in replenishing reserves, noting that issues faced during the dollar crisis, such as difficulty opening letters of credit (LC) for banks, have already become normal.

The economist, however, urged the government to urgently explore alternative overseas labour markets as the ongoing Middle East conflict threatens to disrupt migration and remittance inflows, a key pillar of the country's economy.

He said Bangladesh's heavy dependence on Gulf countries for overseas employment has created vulnerability, particularly at a time when geopolitical tensions are affecting labour demand, recruitment processes and worker mobility.

"Any prolonged conflict in the Middle East could significantly affect manpower export and remittance inflow. It is now crucial to diversify labour markets to minimise risks," he added.

Bangladesh Bank Executive Director and Spokesperson Arif Hussain Khan said remittance inflows to the country remain stable despite ongoing tensions in the Middle East, although the situation is being closely monitored due to Bangladesh's heavy reliance on migrant workers in the region.

"Remittance inflow has shown a positive trend in recent months, which is helping stabilise the foreign exchange market," he said.

"Remitters now feel encouraged to send their money through formal banking channels instead of the illegal 'Hundi' system, which can help boost the country's foreign exchange reserves," he added.

Foreign exchange reserves, according to Bangladesh Bank data released on 16 April, currently stand at $35.04 billion.

However, when calculated using the International Monetary Fund (IMF) methodology under the Balance of Payments and International Investment Position Manual (BPM6), the reserves total 30.37 billion.

Deputy Managing Director (DMD) of the Dutch-Bangla Bank Limited, Mohammed Shahid Ullah, confirmed that demands for 'Hundi' and 'Hawala'-illegal cross-border money transfer channels-have declined following a crackdown on operators after the political changeover, diverting more remittances through formal banking channels.

He added that the positive effects of the remittance boom are highly visible across Bangladesh, particularly in rural communities that rely heavily on money sent from relatives working abroad.

He noted that remittances have consistently increased since August 2024, providing the interim government with a respite following the rapid depletion of foreign exchange reserves.

Mohammed Shahid Ullah, however, noted that remittance enhances financial inclusion by encouraging recipients to engage with formal banking systems.

"It also supports domestic investment through increased savings and liquidity in the financial sector. In times of global economic stress, remittance has proven more stable compared to foreign direct investment or portfolio flows, thus acting as a buffer against external shock," he added.

Despite progress, he mentioned, there remains substantial scope for further improvement.

"Reducing transaction costs and ensuring near real-time fund transfers (T+0 settlement) would make formal channels more competitive. Expanding banking access in rural areas and strengthening partnerships with international money transfer operators can further streamline inflows," he added.

He described that remittance is not merely a financial inflow; it is the lifeblood of Bangladesh's socio-economic progress.

"It strengthens macroeconomic stability, uplifts millions of households, and fuels sustainable development. While the country has made commendable strides in increasing remittance through formal channels, sustained policy innovation, technological advancement, and global labour market integration will be key to unlocking its full potential in the years ahead," he added.

Bangladesh’s financial system remains overwhelmingly bank-dominated with 765 other financial institutions making only a limited contribution to boosting the economy.

According to a Bangladesh Bank report, the other financial corporations (OFCs) — a broad group that includes non-bank financial institutions, insurance companies, brokerage firms, mutual funds and mobile financial services — together account for just 4.6 per cent of total financial sector assets, compared with 78.1 per cent held by banks.

This imbalance highlights a structural weakness, where alternative financing channels remain underdeveloped despite their large number and potential role.

BB identified 765 other financial institutions operating in the country.

These institutions are expected to complement banks by mobilising long-term funds and supporting capital market activities.

At the end of December 2025, total assets of OFCs stood at Tk 2.02 lakh crore, marking a 13.45 per cent increase from Tk 1.78 lakh crore in the previous year.

While this growth appears significant, it has not translated into stronger support for business investment or industrial expansion.

Instead, the sector’s role in direct financing remains limited.

A closer look at the asset composition explains the issue.

Around 85 per cent of OFC assets are concentrated in claims on other sectors, claims on banks, and claims on the government.

This indicates that a large portion of funds circulates within the financial system or goes into public sector instruments, rather than being channelled into private sector investment.

More concerning is the decline in lending activity.

Loans provided by OFCs dropped by 6.7 per cent year-on-year and 4.35 per cent on a quarterly basis.

This contraction suggests that financial institutions other than banks are reducing their exposure to credit at a time when the economy needs diversified funding sources, especially as banks face rising stress.

The term ‘claims’ in the report refers to financial assets held by institutions, such as loans, deposits, or investments in securities.

A higher share of claims on banks, for example, means OFCs are placing funds with banks instead of lending directly to businesses.

Such behaviour reduces their effectiveness as independent financing channels.

On the liability side, the structure further reflects limited market development.

Equity accounts for about 32 per cent of total liabilities, while insurance and pension-related reserves make up around 23.5 per cent.

These are relatively stable sources of funds, but they are not being fully utilised for long-term investment in the real economy.

The absence of a functioning bond market remains a key constraint.

Debt securities represent only a negligible share of liabilities and showed no meaningful growth over the year.

In most economies, bond markets allow companies and governments to raise long-term funds without relying on banks.

In Bangladesh, this channel remains largely inactive, placing more pressure on the banking system.

Within the OFC sector, life insurance companies hold the largest share of assets at about 25 per cent, followed by other financial institutions and brokerage houses.

Mobile financial services are also expanding, accounting for around 9.6 per cent of total assets, reflecting increased digital transactions.

However, these segments largely facilitate payments or manage savings, rather than providing substantial long-term financing for industry.

The long-term trend shows that OFC assets have more than doubled over the past several years, rising from Tk 92,640 crore in 2018 to over Tk 2 lakh crore in 2025.

However, a significant part of this increase is linked to improved data coverage rather than a fundamental expansion of financing capacity.

The report also highlights gaps in data reporting.

Out of 765 identified institutions, only 525 were included in the final analysis due to incomplete submissions.

The overall picture points to a financial system where banks continue to carry the primary burden of financing both short-term and long-term needs.

This creates asset-liability mismatches, as banks use short-term deposits to fund long-term projects, increasing financial risk.

Non-bank financial institutions have yet to evolve into effective channels for capital mobilisation.

Stocks at the Dhaka Stock Exchange extended their gains today (22 April), with turnover crossing the Tk1,000-crore mark for the first time in two months as investors increased purchases of oversold and fundamentally strong shares.

Turnover at the premier bourse rose 13.67% to Tk1,056 crore from Tk929 crore in the previous session, marking the highest level since 17 February, when turnover stood at Tk1,222 crore.

The benchmark DSEX index gained 41 points to close at 5,299, while the blue-chip DS30 index rose 20 points to 2,005. The Shariah-based DSES index also edged up by 3 points to finish at 1,066.

Total market capitalisation increased by Tk2,587 crore to Tk6,86,184.18 crore, reflecting stronger investor participation and improved trading activity.

Market breadth remained sharply positive, as 213 issues advanced compared to 121 declining, with 57 stocks unchanged.

According to market insiders, the stock market had been maintaining a positive momentum following the election, but the ongoing Middle-East conflict interrupted that trend and created pressure throughout the month. As a result, the market moved into an oversold position, creating fresh buying opportunities for investors seeking fundamentally strong stocks at lower prices.

Declining yields on government securities encouraged a portion of funds to shift towards the stock market in search of better returns.

At the same time, investors are showing growing interest in December closing companies that are expected to declare attractive dividends. This buying interest has increased trading floor activity despite continued geopolitical uncertainty in the Middle East, leading to a higher volume of share transactions in the market.

However, large investors are still closely monitoring both domestic and international economic uncertainties. Analysts warn that if the Middle-East conflict worsens further, the market could face renewed pressure. For this reason, institutional and major investors are still maintaining a cautious investment approach despite the recent recovery in market activity.

Among the top gainers, Desh Garments led with a 9.96% rise, followed by Purabi Gen Insurance 9.95% and Samata Leather Complex, up 9.92%. Besides, Bangladesh Lamps, Bangas, Rupali Bank, Agni Systems, Monno Fabrics, Anwar Galvanising, and Mir Akhter Hossain Limited were placed at the top ten gainer list.

On the losing side, Shepherd Industries suffered the biggest drop at 7.59%, followed by Nahee Aluminum down 7.52%, and ICB Employees Provident MF 1: Scheme, which fell 7.89%.

In its daily market review, EBL Securities said that the capital bourse staged a strong recovery, buoyed by improved investor sentiment following the emerging signals of a potential ceasefire extension in the Middle East conflict, prompting continued accumulation of beaten-down scrips in anticipation of improved market momentum.

Market indices tracked a firm upward trajectory from the outset of the session with predominant buying interest, while investor participation strengthened steadily as the session progressed, driving broad-based price appreciation across most of the scrips, according to the commentary.

On the sectoral front, Engineering dominated turnover with a 17.3% share, followed by Textile at 13.9% and General Insurance at 13.5%.

Most sectors ended the session on a positive note. Financial Institutions rose 2.0%, Banks gained 1.7%, and Paper advanced 1.4%, leading the gainers.

On the other hand, a few sectors saw corrections. Tannery declined 0.7%, Ceramic fell 0.7%, and Services slipped 0.6%.

Meanwhile, the Chittagong Stock Exchange also closed in positive territory today. The Selective Categories' Index gained 37.0 points, while the All Share Price Index rose 60.4 points.

The Ministry of Finance has earmarked Tk 1.17 trillion, or 39 per cent of the proposed Tk 3.0-trillion Annual Development Programme (ADP), for the next fiscal year, as block and special allocations across various sectors.Banking sector news

The remaining Tk 1.83 trillion, or 61 per cent of the ADP, is set to be allocated to ongoing projects under different ministries and divisions, according to sources at the Ministry of Planning.

Officials said the Finance Division on Tuesday sent the final ministry-wise expenditure ceilings for ADP allocations for the next fiscal year to the Programming Division of the Planning Commission.

The allocations will be finalised after distribution among projects before being placed at a meeting of the National Economic Council (NEC) for approval.

A review shows that more than Tk 1.07 trillion of the proposed allocation has been kept as block allocation to facilitate approval of new projects. In addition, Tk 97.98 billion has been set aside to meet special needs of local government bodies.

Around 80 per cent of the proposed allocations for several ministries and divisions -- including the Medical Education and Family Welfare Division, Health Services Division, and the Ministry of Primary and Mass Education -- has been kept as block allocation.

Experts and economists say several ministries and divisions often fail to utilise even their project-specific allocations, raising concerns that block allocations may remain underutilised and merely inflate the size of the ADP.

The Local Government Division has proposed the highest allocation in the proposed ADP at Tk 362.28 billion, reflecting continued priority on local infrastructure and service delivery.

It is followed by the Road Transport and Highways Division with Tk 310.65 billion, underscoring strong emphasis on transport connectivity.

The Health Services Division ranks third with Tk 268.08 billion, while Tk 213.48 billion has been proposed for the Ministry of Primary and Mass Education.

The Secondary and Higher Education Division has been allocated Tk 208.35 billion, indicating sustained focus on human capital development.

In the energy sector, the Power Division has been earmarked Tk 192.86 billion, while the Science and Technology Division will receive Tk 173.16 billion. The shipping sector has received the lowest allocation among the listed divisions at Tk 109.69 billion.

Overall, the allocation pattern highlights continued priority on infrastructure, energy and social sectors.

In terms of block allocation, the Health Services Division tops the list with Tk 208.0 billion, accounting for 77.59 per cent of its total allocation, followed by the Ministry of Primary and Mass Education with Tk 162.99 billion.

Secondary and Higher Education has received Tk 115.0 billion, representing 55.19 per cent of its total allocation, while the Medical Education and Family Welfare Division shows the highest reliance on block allocation at Tk 68.0 billion, or 80.52 per cent.

In other key sectors, the Technical and Madrasha Education Division has received Tk 30.79 billion in block allocation, more than half of its proposed allocation, while agriculture shows a relatively lower share at Tk 17.0 billion, or 25.99 per cent.

Economist Dr Mustafa K Mujeri, former director general of the Bangladesh Institute of Development Studies (BIDS), said several ministries -- particularly in health and education -- are unable to utilise even their project-based allocations effectively.Bangladesh market report

"In this context, it is questionable what role block allocations would play for such ministries," he said, raising concerns over their efficiency and absorption capacity.

"Utilisation of block allocations depends on approval of new projects, which is very difficult," he added,

warning that such allocations may only serve to expand the size of the ADP.

Former Planning Division secretary Md Mamun Al Rashid also criticised the practice, saying block allocations are not earmarked for specific projects and may lead to inefficient spending.

"When there is no defined project or sector, such funds often end up being spent on unnecessary areas later," he said, adding that large block allocations create scope for misuse and wastage of public resources.

Sources said the ADP size for the current fiscal year was initially set at Tk 2.3 trillion but later revised to Tk 2.0 trillion.

The proposed ADP for the next fiscal year stands at Tk 3.0 trillion, with Tk 1.9 trillion expected from domestic sources and Tk 1.1 trillion from external financing.