Stocks at the Dhaka bourse slipped back into losses yesterday after a brief rebound in the previous session, as persistent sell-offs driven by cautious investor sentiment eroded early gains.

The downturn came amid heightened global uncertainty following the failure of talks between the US and Iran, prompting investors to offload shares and adopt a wait-and-see approach.

The benchmark index, DSEX, of the Dhaka Stock Exchange (DSE) fell by 41 points to close at 5,230. Market turnover also declined by 5%, while total market capitalisation dropped by Tk2,555 crore to Tk6.85 lakh crore, according to DSE data.

Market breadth remained negative, with 55% of traded stocks declining, compared to 31% advancing, while 14% remained unchanged.

The decline follows a modest recovery in the previous session when the market snapped a losing streak.

On Sunday, the DSEX gained 14 points after shedding around 60 points in earlier sessions.

Yesterday's trading began on a positive note, with indices staying in the green for the first 38 minutes until 10:38am, supported by early buying interest. However, the momentum proved short-lived as selling pressure, particularly in blue-chip stocks, pulled the indices into losses.

By the end of the session, the Shariah-based index DSES fell by 3 points to 1,057, while the blue-chip DS30 index declined by 31 points to 1,981.

Data showed that around 60% of A-category stocks, typically known for offering over 10% dividends, registered price declines. Meanwhile, 40% of Z-category stocks, considered junk stocks, also lost value.

In contrast, mutual funds posted gains, with 73% of traded funds closing higher.

In its daily market commentary, EBL Securities said the market failed to sustain the previous session's recovery as geopolitical concerns dampened investor confidence.

"Although the market opened on a positive note, the momentum quickly faded as jittery sentiment triggered broad-based sell-offs," the brokerage firm noted.

"Selling pressure intensified in large-cap stocks as the session progressed, dragging the broad index into negative territory and reflecting a lack of confidence among investors," it added.

Among the gainers, Mir Akhter Hossain Ltd topped the chart with a 9.82% rise to Tk31.3 per share. It was followed by Yeakin Polymer (9.03%), Fareast Finance (8.69%), Phoenix Finance 1st Mutual Fund (8.61%), and Premier Leasing (8.3%).

On the losing side, Meghna Condensed Milk Industries led the decliners, falling 4.67% to Tk36.7 per share, despite its operations remaining suspended for years. Other major losers included Apex Tannery (4.33%), KDS Accessories (4.27%), Sena Insurance (4.22%), and Peoples Insurance (3.86%).

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.

Bangladesh is entering a period of intense fiscal pressure, with external debt servicing set to surge sharply over the next five years, exposing the limits of its already weak revenue base.

According to an Economic Relations Division (ERD) report, the country will need to pay nearly $26 billion in external debt servicing between the current fiscal year and FY30.

The scale of the burden is clearer in historical context.

In the 54 years since independence in 1971, Bangladesh has paid around $40 billion in debt servicing. Now, nearly two-thirds of that amount will be repaid within just five years.

This comes as the tax-to-GDP ratio has slipped below 7%, the lowest among peer economies, constraining the government's ability to absorb shocks or expand spending.

At the same time, a series of external shocks – including the Covid-19 pandemic, the Ukraine war, domestic political instability, and ongoing tensions in the Middle East – have strained revenue collection, export earnings and remittance flows, further complicating debt servicing pressures.

Total external debt stood at $77.28 billion as of 30 June 2025, up from $68.82 billion a year earlier, according to another ERD report.

Bangladesh paid about $4 billion in the previous fiscal year, which is expected to rise to $4.74 billion in the current year, $4.87 billion in FY27 – peaking at $5.5 billion in FY30.

Economists say the rising obligation will strain public finances at a time of elevated global energy prices. They warn that within five to 10 years, as repayments on new loans begin, the situation could become more complex.

They say avoiding a foreign debt trap requires an urgent push to expand exports, develop skilled manpower, boost remittances, improve investment climate and strengthen revenue.

Why debt pressure is rising

The latest ERD report was prepared ahead of the finance minister's Washington meetings. The finance minister and governor are now in the United States, seeking fresh budget support from the World Bank and the release of IMF loan tranches to ease fiscal stress.

The report estimates are based on external loans contracted up to FY25. Borrowing in the current fiscal year has not been included.

Officials said Bangladesh has financed a series of mega projects through external borrowing, including the $11.3 billion Rooppur Nuclear Power Plant, Padma Rail Link, Karnaphuli Tunnel, Dhaka Metro Rail, Single Point Mooring with Double Pipeline, Hazrat Shahjalal International Airport expansion and the Jamuna Railway Bridge.

Many of these projects have either completed or are nearing the end of their grace periods, triggering principal repayments and steadily increasing debt servicing pressure.

Principal repayments for the Rooppur plant are set to begin in 2028, with annual payments exceeding $500 million. Budget support loans taken during the post-Covid period are also entering repayment phases, further adding to pressure.

Officials also cited implementation delays as a major concern. Delays have slowed the realisation of economic returns, while some completed projects remain idle due to operational bottlenecks.

For instance, electricity generation from Rooppur was expected two years earlier but has been delayed. The Single Point Mooring project, completed in 2024 with $467.84 million in Chinese financing, has yet to begin operations. The Dhaka airport expansion, financed with nearly $2 billion from Japan, also remains idle due to delays in appointing an operator.

Burden peaks in FY30

The report shows Bangladesh will need to repay $25.99 billion over FY26-FY30, including the current fiscal year. Of this, $18.38 billion is principal and $7.6 billion interest. This burden will nearly double to $51.33 billion between FY26 and FY35.

FY30 is projected as the peak repayment year, when Bangladesh will need to service about $5.5 billion based on the debt stock as of June 2025.

The report notes that, based on average monthly remittances of about $2.03 billion during FY21-FY25, less than three months of inflows would be sufficient to cover annual external debt obligations even at the peak.

Existing debt needs 37 years to clear

Based on borrowings up to June of the last fiscal year, Bangladesh would need 37 years to fully repay its existing external debt stock, according to the ERD.

If no new loans are added, the current stock would be cleared by FY63, meaning today's liabilities will continue to be serviced over the long term.

Net external borrowing in FY25 was $5.83 billion, with officials estimating annual increases in debt stock of roughly $8-9 billion.

Debt ratios under pressure

According to the latest Flow of External Resources into Bangladesh report by the ERD, the debt-to-GDP ratio, though still low by global standards, is gradually rising.

It reached 18.99% at the end of FY25, up from 17.03% a year earlier, against a 40% benchmark. The debt-to-revenue ratio also edged higher, climbing to 16.92% from 16.53% over the same period, nearing the IMF's threshold of 18%.

The ERD warned that without stronger revenue growth, Bangladesh could lose its current "comfortable position" in servicing external debt.

Other indicators offer a mixed outlook. The debt-to-exports of goods and services plus remittances ratio improved modestly, falling to 105.87% from 110.09% a year earlier, remaining well below the IMF's 180% threshold.

'Exports, remittances must keep pace'

Terming the situation an "unavoidable reality" for Bangladesh, Zahid Hussain, former lead economist at the World Bank's Dhaka office, said, "If export earnings and remittances fail to keep pace, the economy could slip into distress."

World Bank and IMF analyses show the shift from "low" to "moderate" debt risk is driven less by GDP and more by worsening debt-to-revenue and debt-to-export ratios.

He warned that weak revenue mobilisation and foreign exchange pressures are already staring the economy. "Without improvement, moderate risk could escalate into high risk."

He called for stricter "sanity checks" in selecting loan-funded projects, especially in energy, where investments could ease gas shortages, raise industrial output and support exports.

Loan decisions, he said, must focus on repayment capacity through future exports and fiscal space, not just loan size.

Bangladesh has not defaulted so far, he noted, but warned the buffer may not hold amid global slowdown, LDC graduation pressures and geopolitical shocks. "Debt rescheduling or delays in repayment would carry reputational risks and increase future borrowing costs," he said.

'Capacity-building imperative'

Mustafa K Mujeri, executive director at the Institute for Inclusive Finance and Development, said the economy is at a critical juncture, with rising repayments alongside fresh borrowing.

He warned that mismanagement could trigger a crisis, calling for urgent capacity building based on four pillars: export expansion, skilled manpower development, improved investment climate and stronger revenue collection.

He said reliance on the ready-made garments sector alone is insufficient and called for diversification into agro-products, leather goods and light engineering.

Remittances, he added, remain a key lifeline, requiring alignment with global labour market demand and expanded training programmes. He also urged easier and more attractive legal remittance channels.

He said Bangladesh's tax-to-GDP ratio of around 7-8% is a structural weakness. "This narrow revenue base is insufficient to service large-scale debt while sustaining development."

He called for tax system reforms, anti-evasion measures and broader tax coverage.

He added that energy security is a direct enabler of debt repayment capacity. "Uninterrupted gas and power supply is essential to keep industrial production running."

Finance Minister Amir Khosru Mahmud Chowdhury has unveiled an ambitious vision to transform Bangladesh into a trillion-dollar economy by 2034, even as rising debt and intensifying climate risks threaten to derail progress.

Speaking at the 16th Ministerial Dialogue of the CVF-V20 on April 14, the minister underscored Bangladesh’s position as one of the world’s most climate-vulnerable economies, warning of a tightening fiscal environment driven by recurring disasters and financial strain.

Mr. Chowdhury delivered a stark assessment of the country’s economic trajectory, cautioning that development financing is increasingly constrained by a growing debt burden.

Bangladesh’s debt-to-GDP ratio has climbed sharply – from 26.2 per cent in FY2017 to 36.0 per cent in FY2023 – with further increases expected as repayment obligations rise on large infrastructure projects.

By FY2024, domestic debt is projected to comprise 56 per cent of total liabilities, while external debt will account for 44 per cent, reflecting a shifting financing structure that could heighten internal fiscal pressure.

The fiscal squeeze is already impacting climate-related social protection efforts. Allocations for climate-focused programmes under the Social Safety Net Programme (SSNP) have dropped dramatically to U$592.8 million for FY2025–26, down from U$1.42 billion previously – nearly a two-thirds reduction.Personal Finance Software

To cushion vulnerable populations, the government has introduced targeted initiatives such as “Family Cards” and “Farmers Cards”, aimed at mitigating the combined shocks of climate change and global economic volatility.

Beyond domestic challenges, Bangladesh is grappling with mounting geopolitical and trade pressures.

The World Bank estimates that the ongoing Middle East conflicts could push an additional 1.2 million Bangladeshis into poverty, exacerbating social vulnerabilities.

Meanwhile, the minister criticised unilateral trade measures (UTMs) that bypass global trade norms, arguing that such policies disproportionately affect climate-vulnerable economies like Bangladesh.

In response, Bangladesh has outlined a five-point reform agenda aimed at reshaping international financial support mechanisms.

The points are adoption of a Multidimensional Vulnerability Index (MVI) instead of GNI per capita to determine aid eligibility, large-scale and fast-tracked debt relief mechanisms, expanded risk-hedging tools to attract private climate investment, pre-arranged emergency liquidity facilities for climate disasters and accelerated climate-focused reforms within multilateral development banks.Bangladesh Economic Report

“It is time to translate conference into practice and turn advocacy into action,” Mr. Chowdhury said, urging the global community to step up support.

He also proposed establishing a CVF-V20 Regional Hub in Dhaka, positioning Bangladesh as a leader in climate resilience and policy innovation.

Bangladesh’s trillion-dollar ambition signals confidence in long-term growth, but without urgent fiscal space, climate financing, and global support, the path ahead remains highly challenging.

A high-powered Bangladesh delegation is now staying in Washington D.C. led by the finance minister for joining the Spring Meetings of IMF-WBG.

Finance Secretary Dr Md Khairuzzaman Mozumder, NBR Chairman Md Abdur Rahman Khan, Governor Md Mostaqur Rahman, Basumati Group Chairman ZM Golam Nabi and senior officials of different ministries and divisions are members of the panel.

The Spring Meetings began on April 13 and will conclude on April 18.

The International Monetary Fund cut its growth outlook on Tuesday due to Iran war-driven energy price spikes and supply disruptions and warned that the global economy would teeter on ​the brink of recession if the conflict worsens and oil stays above $100 per barrel through 2027.

With massive uncertainty over the Middle East conflict gripping finance officials gathering for IMF and World Bank spring meetings in Washington, ‌the IMF presented three growth scenarios: weaker, worse and severe, depending on how the war unfolds.

The World Economic Outlook's most optimistic "reference scenario" assumes a short-lived Iran war and forecasts 3.1% real GDP growth for 2026, down 0.2 percentage point from its previous forecast in January. Under this scenario, oil prices average $82 per barrel for all of 2026, a decline from recent levels of around $100 for the Brent benchmark futures price .

Absent the Middle East conflict, the IMF said it would have upgraded its growth outlook by 0.1 percentage point to 3.4%, due to a continued technology investment boom, lower interest rates, less-severe US tariffs and fiscal support ​in some countries.

But the war has created a far bigger risk to the global economy than President Donald Trump's initial wave of steep tariffs did a year ago, IMF chief economist Pierre-Olivier Gourinchas told Reuters in an interview.

"What's happening in ​the Gulf is potentially much, much larger, and that's what our scenarios are kind of documenting," he said.

Under an "adverse scenario" of a longer conflict that keeps oil prices around $100 per barrel this ⁠year and $75 in 2027, the IMF predicts global GDP growth would fall to 2.5% this year. The IMF in January had forecast that oil would decline to about $62 in 2026.

And the IMF's worst-case "severe scenario" assumes an extended and deepening conflict and much higher oil prices that prompt ​major financial market dislocations and tighter financial conditions, slashing global growth to 2.0%.

"This would mean a close call for a global recession," the IMF said, adding that growth has been below that level only four times since 1980 - with the last two severe recessions in 2009, following ​the financial crisis, and in 2020 as the COVID-19 pandemic raged.

Inflation pressures

Gourinchas said that a number of countries would be in outright recessions under this scenario, with oil prices averaging $110 per barrel in 2026 and $125 in 2027. Prices at this level for an extended time would also increase expectations "that inflation is here to stay," prompting wider price increases and wage hike demands.

"That change in inflation expectations is going to require central banks to step on the brakes and try to bring inflation back down," he said, adding that this may require more pain than in 2022.

The IMF said, however, that central banks ​may be able to "look through" a short-lived energy price surge and hold rates steady amid weaker activity, which would be a de facto monetary easing, but only if inflation expectations remain anchored.

Global inflation for 2026 would top 6% in the severe scenario, compared to ​4.4% in the most-optimistic reference scenario, which is the assumption for the IMF's country and regional growth forecasts.

Major economy outlooks

The IMF shaved its US growth outlook for this year to 2.3%, down just a tenth of a percentage point from January, reflecting the positive effect of tax cuts, the ‌lagged effect of ⁠interest rate cuts and continued AI data center investment partly offsetting the higher energy costs. These effects are expected to continue in 2027, with growth now forecast at 2.1%, up a tenth of a point from January.

The euro zone, still struggling with higher energy prices caused by Russia's 2022 invasion of Ukraine, takes a bigger hit from the Middle East conflict, with its growth outlook falling 0.2 percentage points in both years to 1.1% in 2026 and 1.2% for 2027.

Japan's growth is largely unchanged under the most benign scenario at a weak 0.7% for 2026 and 0.6% for 2027, but the IMF said that it expects the Bank of Japan to hike rates at a slightly faster pace than anticipated six months ago.

The IMF forecast China's growth for 2026 at 4.4%, down a tenth of a point ​from January as the higher energy and commodity costs are partly ​offset by lower US tariff rates and government stimulus measures. ⁠But the IMF said headwinds from a depressed housing sector, a declining labor force, lower returns on investment and slower productivity growth will cut China's 2027 growth to 4.0%, a forecast unchanged from January.

Emerging markets, Middle East hit hard

Overall, emerging market and developing economies, where GDP tends to be more dependent on oil inputs, take a bigger hit from the Middle East conflict than advanced economies, with 2026 ​growth seen falling 0.3 percentage points to 3.9%.

Nowhere is this more pronounced than at the epicenter of the conflict in the Middle East and Central Asia region, which will see its ​2026 GDP growth fall by two full ⁠percentage points to 1.9% amid widespread infrastructure damage and sharply curtailed energy and commodity exports.

GDP declines for 2026 are forecast at 6.1% for Iran, 8.6% for Qatar, 6.8% for Iraq, 0.6% for Kuwait and 0.5% for Bahrain.

But under the assumption of a short-lived conflict, the region bounces back quickly, with 2027 GDP growth rebounding to 4.6%, a jump of 0.6 percentage point from the January forecasts.

The one bright spot amid emerging markets is India, which saw growth upgrades of about a tenth of a percentage point to 6.5% for both 2026 and 2027, due in ⁠part to momentum ​from strong growth at the end last year and a deal to lower the US tariff rate on Indian imports.

Fuel cost fiscal support

The IMF said that governments ​will be tempted to implement fiscal measures to ease the pain of higher energy prices, including price caps, fuel subsidies or tax cuts, but cautioned against these urges amid still-elevated budget deficits and rising public debt.

Gourinchas said it was "perfectly legitimate" to want to protect the most vulnerable, but subsidies in one country could lead to ​fuel shortages in others that can't afford them.

"You have to do it in a very targeted, very temporary way that doesn't really mess up the fiscal framework" needed by most countries to rebuild their fiscal buffers, he said.

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.

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.

Despite no major surge in revenue collection, the government is planning a 50% increase in development spending in the upcoming 2026–27 fiscal year compared to the revised target of the current fiscal year.

To this end, the Ministry of Finance is set to allocate Tk3 lakh crore for the Annual Development Programme (ADP) in the upcoming budget, of which 1.90 lakh crore will come from government funds and around Tk1.10 lakh crore from foreign loans and grants, according to relevant officials.

In the current fiscal year, the government initially allocated Tk2.30 lakh crore for the ADP in the original budget. However, implementation fell short of expectations, leading to a downward revision to Tk2 lakh crore. Of this, Tk1.28 lakh crore was planned from domestic sources, while Tk72,000 crore was expected from external financing.

Data from the Implementation Monitoring and Evaluation Division (IMED) shows that, as of February, ministries and divisions have spent Tk59,130 crore, which is 30% of the revised total allocation.

The Local Government Division (LGD) is set to receive the highest allocation of Tk36,620, which is about 12.21% in the proposed Tk3 lakh crore ADP in the next fiscal year.

Roads Transport to get 2nd highest share; then Health

The Roads Transport and Highways Division (RTHD) is expected to secure the second-largest allocation at Tk32,903 crore, approximately 11% of total ADP allocation, according to preliminary estimates.

In a major shift, the Health Services Division's allocation is projected to rise sharply to Tk20,608 crore—more than six times higher than its revised allocation for the current fiscal year—lifting the sector from 15th to third position in the ADP ranking.

The Power Division is likely to receive the fourth-highest allocation of Tk19,186 crore, followed by the Ministry of Science and Technology with Tk17,366 crore.

Meanwhile, Tk16,848 crore is expected to be allocated to primary and mass education, while the Secondary and Higher Education Division may receive Tk13,836 crore.

Officials from the Planning Commission said emphasis has been placed on improving ADP implementation by aligning projects with medium-term resource availability, ensuring feasibility studies before approving large projects, strengthening project monitoring, and maximising the use of project loans.

Recommendations also include enhancing the capacity of project directors, improving financial management, and strengthening budget implementation monitoring systems.

Meanwhile, ADP implementation rates have shown a declining trend in recent years. From FY2021–22 to FY2024–25, the implementation rate fell to 67%, and based on spending trends in the first eight months of FY2025–26, it may remain below 80%.

However, during the July–February period of the current fiscal year, implementation progress stood at just 29.6%.

Mongla Port operations have come to a near standstill as lighter vessels responsible for unloading and transporting cargo from commercial ships are unable to operate due to a severe fuel shortage, leading to mounting financial losses for importers.

Owners of lighter vessels say most of their fleet is now idle due to the fuel crunch, disrupting cargo handling from mother vessels and delaying vessel turnaround time. As a result, importers are being forced to pay penalties for the extended stay of commercial ships at the port's outer anchorage.

They further said that since the outbreak of conflict in the Middle East, they have been unable to secure adequate fuel supplies from depots in Chattogram.

Vessel owners also complain that despite repeated appeals by the Lighter Vessel Owners' Association to the Ministry of Power, Energy and Mineral Resources, no effective remedial measures have been taken.

Sources say hundreds of empty lighter vessels have been anchored in the Pashur River in Mongla for several days. A similar situation has been observed in Rupsha and at Jetty no 4 and 5 in Khulna, where hundreds more vessels remain idle due to the fuel shortage.

Cargo from large mother vessels at the outer anchorage is usually transferred to lighter vessels and then transported via river routes to terminals in Dhaka, Narayanganj and other parts of the country. However, the fuel shortage has severely disrupted these operations.

Owner of MV Mimtaz lighter vessel Md Khokon said his vessel has been waiting for fuel for several days. "We are unable to get fuel from SK Enterprise as depot supplies are insufficient. This is the situation for all vessels," he said.

Mohammad Mamun, production officer at Seven Circle Cement in Rupsha, said delays in cargo unloading from commercial ships are causing significant financial losses.

"We are paying penalties of around $17,000 per day for each commercial vessel. Delays are increasing costs, and our plant is facing raw material shortages," he said.

Azadul Haque, AGM of Sheikh Cement Factory, said production has been completely halted due to the crisis. "Supply of raw materials is being disrupted and workers are sitting idle," he said.

HM Dulal, owner of Messrs Nuru and Sons, marine dealer and agent of Meghna Petroleum Limited in Mongla, said fuel demand has increased due to various government development activities, including river dredging and canal excavation, putting additional pressure on supply.

Engineer Prabir Hira, manager (operations) at Meghna Petroleum Limited in Mongla, said supply disruptions caused by the Iran conflict have affected fuel availability, and distribution is being carried out in line with government directives.

The Bangladesh Poultry Industries Association (BPIA) has urged the government to halve taxes on the poultry sector in the proposed 2026-27 national budget.

According to a budget proposal sent to the National Board of Revenue recently, BPIA said production costs in the poultry industry have nearly doubled over the past five years, putting significant pressure on farmers.

As expenses continue to outpace earnings, many are forced to shut down operations.

Mosharaf Hossain Chowdhury, president of BPIA, said that in the current fiscal year, corporate tax in the sector has been raised from 15 percent to 27.5 percent, advance income tax from 1 percent to 5 percent, and turnover tax from 0.6 percent to 1 percent.

Such high tax rates are unprecedented for food production sectors globally, he said, adding that the increases have driven up the cost of poultry feed and other essential inputs.

Chowdhury called for an immediate reduction of existing taxes and duties by half to ensure the safeguarding of small and medium-scale farmers and sustain industry growth.

Without such measures, it will be increasingly difficult for marginal farmers to survive, he said

The BPIA president also stressed the need to eliminate middlemen and extortion practices across the supply chain, from farms to retail egg markets.

In addition, he called for electricity subsidies, easier access to credit, and prioritising poultry farmers under government agricultural support programmes.

Md Safir Rahman, secretary general of the BPIA, said that without special incentives in the upcoming budget, investor interest in the poultry sector may decline, potentially slowing the emergence of new entrepreneurs.

Garment exports from Bangladesh to the United States fell 2.54 percent to $5.59 billion in the July-March period of the current fiscal year.

The US accounts for about 20 percent of the country’s total annual apparel exports.

Exports to the United Kingdom, the third-largest destination with a 12 percent market share, also dropped 1.61 percent to $3.30 billion during the period, according to data from the Export Promotion Bureau compiled by the Bangladesh Garment Manufacturers and Exporters Association, published yesterday.

Amid a volatile global supply chain, shipments to Canada edged down 0.26 percent to $961.34 million in July-March.

Exports to non-traditional markets declined sharply, falling 8.05 percent during the period.

Overall, readymade garment (RMG) exports stood at $28.58 billion in July-March, marking a 5.51 percent year-on-year decline.

Shipments to the European Union, which accounts for 49 percent of Bangladesh’s total apparel exports, also fell 6.99 percent to $14.02 billion, as per the data.

India has further ​raised a windfall tax on exports of ‌diesel and aviation turbine fuel it imposed last month to ensure adequate domestic supply.

In a government notification on ​Saturday, India’s finance ministry increased the tax ​on diesel exports to 55.5 rupees per litre from 21.5 rupees per litre, and on ​exports of aviation turbine fuel to 42 rupees ​per litre from 29.5 rupees per litre, effective immediately. India also last month cut excise duty on petrol and diesel by ​10 rupees ($0.11).

Separately, to control a rise in airfares, ​it has also capped a monthly increase in aviation turbine ‌fuel prices for domestic airlines at 25 percent in April. Jet fuel accounts for up to 40 percent of an airline’s expenses. Global oil prices have surged past $100 ​per barrel ​as the flow of oil through the Strait of Hormuz, which serves as a conduit ​for 40 percent of India’s crude oil ​imports, remains heavily restricted due to the US-Iran war.

India, which ranks among the top five refining nations globally and is ​also the world’s third-biggest oil ​importer and consumer, relies heavily on overseas supplies.

The DSE Brokers Association of Bangladesh (DBA) has requested a three-month extension from the capital market regulator to comply with newly introduced margin rules, citing concerns that the current April deadline could trigger massive sell-offs and further destabilise an already distressed market.

In a formal letter to the Bangladesh Securities and Exchange Commission, the DBA – a primary intermediary representing brokerage firms of the Dhaka Stock Exchange – urged the regulator to move the compliance deadline from 30 April to 31 July 2026.

The commission formulated Margin Rules 2025, which came into effect on 1 November, and introduced several critical requirements aimed at strengthening risk management, investor protection, and overall market stability.

However, in the newly introduced rules, three key provisions require compliance within six months by 30 April.

Saiful Islam, president of DBA, told The Business Standard, "The timeframe mandated in the rules is insufficient for compliance; that is why we have sought an extension."

He said that to comply with the rules, brokers would need to sell a significant amount of shares, which would put pressure on the market.

"Currently, the capital market is going through a distressed situation resulting from the US-Iran war. In such a situation, if brokers comply with the rules, the market will suffer further," he added.

In the letter to the commission, the DBA said, "Brokerage houses require adequate time for internal consultations, risk assessment, board approvals, and integration into operational systems. Most brokerage houses are still in the process of finalizing policy and implementation due to a lack of skilled resources specified by the rules and adequate technical support and client feedback."

It said full alignment with risk-based capital adequacy necessitates significant system upgrades, staff training, internal audits, and technological enhancements. Rushed implementation may lead to unintended operational errors or temporary disruptions in margin services, said the DBA.

Regarding the sale adjustment of non-marginable securities from existing margin loan clients, it said thousands of existing loan accounts hold non-marginable securities of significant value. A six-month deadline could force distressed sales, create market volatility, cause avoidable losses on retail investors, and strain liquidity, said the DBA.

Moreover, during the current distress situation of the capital market due to the recent war and fuel crisis made it difficult to impose the rule, as it will affect the distress furthermore, it said. "A timely transition is essential to protect investor interests."

The association further said an additional three-month extension, making the total compliance period nine months up to 31 July 2026, would provide brokerages to complete necessary system and policy upgrades to ensure smooth, non-disruptive adjustment for existing loan clients.

According to of the commission, the total negative equity stood at Tk10,425 crore as of February 2025, including Tk8,005 crore in principal margin loans and Tk2,420 crore in accrued interest.

The stock market after the 2010 crash caught the gigantic negative equity problem as the regulator then verbally ordered firms not to trigger forced selling, according to sources.

A total of 146 firms – 102 brokerage houses of the DSE, 39 merchant banks, and five brokerage firms of the Chittagong Stock Exchange (CSE) – have been struggling with negative equity for years.

Negative equity refers to a deficit in owners' equity, which occurs when the value of assets used to secure margin loans falls below the outstanding loan balance.

Brokerage firms and merchant banks had extended margin loans to clients for share purchases, but the current market value of those shares is far below their purchase price.

Negative equity is created when a broker or merchant bank does not trigger the forced selling of securities that a client buys with money borrowed from the broker or merchant bank.

As a result, lenders have been unable to adjust the loans through share sales, causing the negative equity to persist for years. To ease the mounting pressure on lenders, the regulator has been extending deadlines for adjusting negative equity and maintaining provisioning.

If the loans are not recovered for one year, the firms need to keep provisioning against the total lending amount of principal. But the firms were able to maintain only Tk2,946 crore, and net provision deficit stood at Tk5,058 crore, the data showed.

Bangladesh can no longer afford “surreal” budgets built on inflated projections and political convenience, warned eminent economist Debapriya Bhattacharya.

He urged the government to confront its fiscal realities through difficult but necessary reforms.

“Don’t make a surreal budget -- an illusory one that defies realities. Artificially inflated expenditures and income may be politically saleable at the moment, but everyone knows these numbers cannot be delivered,” he said.

“However unpalatable it may sound, the government does not have the luxury of fiscal profligacy. The guiding factor must be the government’s available fiscal space,” he said.

In an interview with The Daily Star, the distinguished fellow of the Centre for Policy Dialogue (CPD) shared his perspectives on the government’s upcoming budget for the fiscal year 2026-27.

He outlined potential avenues for revenue mobilisation, flagged concerns over public expenditure, and stressed the need for a credible and transparent fiscal framework to navigate mounting economic pressures.

At the core of the upcoming budget lies a critical challenge: how to mobilise adequate revenue without overburdening taxpayers.

According to Debapriya, a significant portion of potential revenue is lost through tax exemptions.

“Income tax exemptions alone account for around 3 percent of GDP. If you add VAT and customs exemptions, total tax expenditures rise to about 6.8 percent,” he said, citing data from the National Board of Revenue (NBR).

But he cautioned against blanket removal.

“The priority should be rationalisation. We need to assess whether these exemptions are disproportionately benefiting certain business groups and whether they are actually improving productivity and competitiveness of the sector concerned,” he said.

Ensuring that small and medium enterprises receive adequate tax support should also be part of that review, he added.

Beyond tax dispensations, the government faces growing fiscal pressure from demand for subsidies and incentives.

“Subsidies account for about 1.8 percent of GDP, with a large share going to the power sector. There are also significant export and agricultural incentives, Debapriya said.

“When you combine tax expenditures, subsidies, and fiscal incentives, the total fiscal exposure reaches around 9 to 10 percent of GDP. Including contingent liabilities, it exceeds 12 percent. That is substantial for an economy which collects less than 7 percent of GDP as total revenue.”

To address the existing revenue gap, Debapriya stressed the importance of expanding the tax base. Out of 1.28 crore tax identification number (TIN) holders, less than 23 lakhs (18 percent) actually pay taxes.

“The principle should be low tax rates with high coverage,” he said. “We need to bring more people into the tax net rather than increasing the burden on a small group.”

He also highlighted the need to distinguish between taxable individuals and taxable income.

“Someone may be within the tax net but have little taxable income, while others with significant income remain under-taxed. That imbalance needs to be corrected.”

He suggested exploring new areas of taxation, including property and inheritance taxes.

“In most developed economies, inheritance tax is used to address intergenerational inequality. You cannot tackle inequality by taxing income alone; asset inequality is far greater in our country,” he said.

Asset recovery, particularly by bringing back stolen resources and making large defaulters pay, could also provide an additional source of revenue if pursued effectively, he added.

SHRINKING FISCAL SPACE

Debapriya warned that Bangladesh’s fiscal space is narrowing, as operating expenditures continue to rise. The newly elected government will have to prudently consider the recommendations made by the National Pay Commission 2025 under the interim government.

“Salaries, subsidies, and interest payments are consuming revenue budget,” he said.

“Debt stress is now emerging as a major macroeconomic challenge.” Currently, the debt servicing liabilities of the government -- domestic and external -- are almost double the amount of total public expenditure for health and education.

He noted that public expectations from the new government remain high. Some early measures based on electoral commitments may appear to be populist in nature. However, these initiatives are being rolled out in phases and remain relatively contained in fiscal terms, he added.

URGENCY OF TAX REFORMS

Debapriya stressed that delays in tax administration reform, particularly within the NBR, could undermine domestic revenue mobilisation.

“If the reform process is not completed quickly, especially the institutional restructuring, tax collection may suffer at a critical time,” he warned.

He pointed out that both revenue collection and public expenditure will peak during the last quarter (April-June) of the current fiscal year.

“Reducing human interaction, minimising discretionary power, and ensuring transparency through digital systems are essential for improving efficiency and accountability,” he said.

For Bangladesh, he concluded, the way forward lies in realism, discipline, and coherent policymaking.

“We often see policy contradictions-- where one measure offsets another. That reduces overall effectiveness,” he said. Thus, there is a need for consistency and coordination.

“The opportunity is still there,” he said. “But it is narrowing.”

The policy expert urged the finance minister to adopt a pragmatic but structured approach to fiscal reform, stressing the need for policymakers to look beyond immediate pressures.

“My suggestion is simple: take the hard path, but place it within a medium-term budgetary framework -- a three-year horizon. That way, people can be assured that short-term difficulties will lead to longer-term stability,” he said.

“You should not be overly concerned about what happens in just one year. The real focus should be on where the national economy would stand before the next national election, he observed.

Using an analogy, he explained the need for short-term restraint to enable long-term gains.

“If you want to make a long jump, you have to step back first, gather momentum, and then leap forward. This is that moment-- we may need to pull back now to create the space for consolidation and future growth.”

STALLED CAPITAL MARKET REFORMS

Debapriya pointed to the long-standing proposal of offloading shares of multinational companies (MNCs), state-owned banks and enterprises (SOEs) to deepen the capital market.

“This idea dates back to the former finance minister Saifur Rahman’s time, but implementation has been continuously aborted,” he said.

The interim government also gave instructions to bring in shares of profitable SOEs and multinational companies to the capital market. The government and the MNCs each were to offload at least 5 percent of their shares. “But to no avail.”

He attributed the failure to bureaucratic resistance, as officials often benefit from maintaining control over these entities. Offloading the shares would have given the capital market some positive vibes and, at the same time, generated some much-needed resources for the government.

On the expenditure side, he expressed concern over the effectiveness of public spending, particularly under the Annual Development Programme (ADP).

“Many projects are delayed, repeatedly revised, and suffer from poor feasibility studies,” he said.

“Protracted land acquisition process and deficient project management, epitomised by inappropriate project directors, are also common.” There are more than 1300 projects under the ADP, one-third of which are six to eleven years old.

He recommended forming a dedicated review body to weed out the “zombie projects” that have been continuing without meaningful progress.

“There is also a need to appoint skilled project directors and, where necessary, bring in professionals from outside the government,” he added.

Improving the quality of spending, he noted, would increase public trust and tax compliance.

In the searing heat of April, hundreds of vehicles queue outside filling stations across the country – a stark picture of a fuel crisis unfolding on the ground. But the numbers tell a different story. In the first nine months of the current fiscal year, fuel imports rose by 13.66% and the import bill surged by an even sharper 28.82%.

Despite the higher inflow, shortages have persisted since early March after conflict in the Middle East escalated, raising fresh questions about how the supply system is being managed.

Data from the Chattogram Custom House show Bangladesh imported 57.4 lakh tonnes of fuel between July and March of FY26, compared with 50.5 lakh tonnes in the same period a year earlier. The basket includes diesel, crude oil, furnace oil, petrol, octane, jet fuel and base oil.

The import value stood at Tk43,733.58 crore. With duties and taxes of Tk9,686.63 crore, total expenditure reached Tk53,420.21 crore – up from Tk41,667.69 crore a year earlier. That means the government paid an additional Tk11,752.52 crore for a relatively modest increase in volume of 6,89,969 tonnes.

What drove the increase

The state-run Bangladesh Petroleum Corporation (BPC) imported 26.87 lakh tonnes of diesel, 16.02 lakh tonnes of crude oil, and 11.26 lakh tonnes of furnace oil during the period. Imports of petrol and octane, jet fuel and base oil also rose, while furnace oil declined.

Diesel imports alone increased by nearly 6,00,000 tonnes year-on-year. Crude oil imports were also significantly higher, while furnace oil fell by more than 3,00,000 tonnes.

Per-tonne import costs also climbed. Diesel cost Tk1,02,796 per tonne on average in FY26, up from Tk88,442 in FY25 – an increase of over Tk14,000. Other fuels saw similar per-tonne cost increases.

Analysts say the mismatch between volume and cost points to higher global prices and rising import expenses. But the scale of the increase has raised eyebrows.

Energy expert M Tamim said both the jump in consumption and the surge in costs appear unusual. "An additional nearly 6,00,000 tonnes of diesel use in just nine months is difficult to explain. The government should look into it," he told TBS.

He added that fuel prices remained largely stable for most of the period. "Apart from March, prices did not change much. So, a 28% increase in cost is not very clear."

Questions over cost spike

Majare Khorshed Alam, former general manager of Eastern Refinery Limited, also flagged the gap. "If imports have increased by around 13%, then a 28% rise in costs seems somewhat abnormal," he said.

He called for an independent audit. "If there has been any irregularity or corruption, it should be identified. And if the rise is due to mismanagement, corrective steps must be taken to bring costs to a tolerable level."

Khorshed noted that global crude prices were relatively stable between January 2025 and January 2026 – hovering around $81-82 per barrel – before rising later amid geopolitical tensions. "So the basis of such a large cost increase is not clear," he added.

Supply crunch despite higher imports

Even as imports increased, fuel shortages began appearing across the country from early March. Long queues formed at filling stations, and some outlets temporarily ran dry.

Experts say the problem lies less in imports and more in distribution.

Although BPC handles procurement, distribution is managed through three state-owned companies – Padma Oil Company, Meghna Petroleum Limited, and Jamuna Oil Company – which supply dealers nationwide.

Data suggest an unusual surge in fuel release just before the shortage emerged. Between 28 February and 6 March, the three companies together allocated around 25,000 tonnes of diesel per day – nearly double the usual demand for 12,000-13,000 tonnes.

In just seven days, about 1,75,000 tonnes were supplied, far exceeding the expected 84,000 tonnes. That is equivalent to roughly 16 days' worth of normal consumption being released within a week.

Officials said each company typically sells around 3,665-4,000 tonnes per day. But during that period, daily sales at each company rose to around 8,000 tonnes.

A senior official at Jamuna Oil, speaking on condition of anonymity, described the episode as clear mismanagement, questioning where such large volumes went in such a short time. He said, "Usually there is no cap on how much fuel the companies can sell daily. But, the authorities should have been more cautious when large quantities of fuel were being sold for days."

After the issue reached the energy ministry, daily allocations were scaled back to around 3,700 tonnes.

Hoarding feared

Experts suspect a large portion of the excess supply may have been hoarded.

"If 1,75,000 tonnes were sold in a week, dealers may have stockpiled a significant amount," said Tamim, adding that authorities should also examine whether any fuel was smuggled out.

Khorshed echoed similar concerns. He said pump owners and distributors often stockpile fuel expecting future price hikes. "Recent government drives have already uncovered several cases of excessive hoarding."

This kind of behaviour fuels panic and creates the perception of a shortage, he said, adding that authorities are trying to stabilise the situation, though lapses may have occurred.

Attempts to contact BPC Director (Operations) AK Mohammad Shamsul Ahsan and Director (Marketing) Md Sabet Ali for comments on the issue went unanswered.

Bigger picture

Bangladesh's annual fuel demand is around 72 lakh tonnes, with more than 92% met through imports by BPC. A portion of crude oil – about 15 lakh tonnes – is refined domestically by Eastern Refinery Limited.

The numbers do not point to a shortage of imports. Instead, they suggest gaps in monitoring, distribution and cost control.

Analysts say without tighter oversight and better coordination among agencies, such disruptions could recur – even when supply remains adequate on paper.

Oil prices jumped above $100 a barrel on Monday as the US Navy prepared to block ships from reaching Iran via the Strait of Hormuz, a move that could restrict Iranian oil exports, after Washington and Tehran failed to reach a deal to end the war.

Brent crude futures rose $6.71, or 7.05%, to $101.91 a barrel by 0104 GMT after settling 0.75% lower on Friday.

"The market is now largely back to conditions before the ceasefire, except now the US will block the remaining up to 2 million barrels per day Iranian-linked flows through the Strait of Hormuz as well," said Saul Kavonic, head of energy research at MST Marquee.

President Donald Trump said on Sunday the US Navy would start blockading the Strait of Hormuz, raising the stakes after marathon talks with Iran failed to reach a deal to end the war, jeopardising a fragile two-week ceasefire.

He added that the price of oil and gasoline may remain high through November's midterm elections, a rare acknowledgement of the potential political fallout from his decision to attack Iran six weeks ago.

US Central Command said US forces would begin implementing the blockade of all maritime traffic entering and exiting Iranian ports at 10 am ET (1400 GMT) on Monday.

It would be "enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf and Gulf of Oman," a CENTCOM statement on X said.

US forces would not impede freedom of navigation for vessels transiting the Strait of Hormuz to and from non-Iranian ports, it added.

IG market analyst Tony Sycamore said the move would effectively choke off the flow of Iranian oil, forcing Tehran's allies and customers to apply the necessary pressure to get the waterway reopened.

Iran's Revolutionary Guards said on Sunday that any military vessels attempting to approach the Strait of Hormuz would be considered a violation of the two-week US ceasefire and be dealt with harshly and decisively.

Despite the stalemate, three supertankers fully laden with oil passed through the Strait of Hormuz on Saturday, shipping data showed. They appeared to be the first vessels to exit the Gulf since the ceasefire deal was struck last week.

Oil tankers are steering clear of the Strait of Hormuz ahead of the US blockade on Iran, shipping data on LSEG showed.

On Sunday, Saudi Arabia said it has restored full oil pumping capacity through the East-West pipeline to about 7 million barrels per day, days after providing an assessment of damage to its energy sector from attacks during the Iran conflict.

Deposits in the country’s Islamic banking system rose 9.42 percent year-on-year to Tk 4.81 lakh crore at the end of December 2025, marking a rebound in shariah-based banks after years of irregularities and weak governance.

By the end of 2025, deposits with Islamic banking increased by Tk 41,434 crore compared with the corresponding quarter of 2024, according to the Bangladesh Bank (BB).

The trend over the past few years has been uneven. Deposits stood at Tk 4.09 lakh crore at the end of 2022 and rose to Tk 4.43 lakh crore by late 2023. They then slipped before regaining momentum through 2024.

Even so, the central bank said that some full-fledged Islamic banks remain under severe liquidity pressure, weighed down by persistent irregularities and poor accountability.

In the “Quarterly Report on Islamic Banking in Bangladesh”, the BB said that without good governance, the recovery will not last.

Islamic banks now hold 24.38 percent of total deposits across the banking sector and account for 29.10 percent of total investments, according to the report.

The number of deposit accounts in the Islamic banking system rose to 4.1 crore by the end of December 2025, from 4.04 crore a year earlier.

Of the total deposits, the 10 full-fledged Islamic banks held Tk 4.11 lakh crore, or 85.47 percent of the market share. Islamic branches of conventional banks held Tk 29,681 crore, while Islamic windows of regular banks held Tk 40,231 crore.

Among the full-fledged shariah-based lenders, Islami Bank Bangladesh PLC attracted the largest individual share of deposits at 37.44 percent, followed by Al-Arafah Islami Bank PLC at 10.41 percent and First Security Islami Bank PLC at 7.94 percent.

The BB report showed that investment by Islamic banks grew 9.55 percent year-on-year to Tk 5.25 lakh crore. This was equal to 29.10 percent of total loans and advances across the banking sector at the end of December 2025, according to the BB.

Large industries took the biggest slice at 40.18 percent of all Islamic bank investment, followed by trade and commerce at nearly 33 percent.

The central bank said the Islamic banking system has been playing a significant role in mobilising deposits and financing in various economic activities in Bangladesh.

However, the number of rural branches of full-fledged Islamic banks has not grown in line with demand. “They may focus more on expanding their outreach into rural areas,” it added.

The BB said Islamic banks may invest more in socially beneficial industries, particularly in agriculture and small businesses.

The central bank recommended that Islamic banks explore new customer bases in microfinance, support women entrepreneurs, and meet the financial needs of public agencies.

The DSE Brokers Association of Bangladesh (DBA) has asked the stock market regulator to extend the deadline for complying with new margin rules by three months.

In a recent letter to the Bangladesh Securities and Exchange Commission (BSEC), the association sought more time to meet the requirements set out in the Bangladesh Securities and Exchange Commission (Margin) Rules 2025.

The rules came into force on November 1 last year, and are designed to strengthen risk management, protect investors and boost market stability. Three key provisions must be implemented within six months, with the current deadline set for April 30.

In the letter, the association argued that the timeframe is too tight.

DBA said that brokerage houses need time for internal consultations, risk assessments, board approvals and integration of the new requirements into their operational systems.

The association said many firms are still finalising their policies and implementation plans due to a shortage of skilled personnel required under the rules, as well as limited technical support and client feedback.

The association also noted that aligning with risk-based capital adequacy standards requires system upgrades, staff training, internal audits and technology improvements.

Rushing the process could trigger operational errors or disrupt margin services, it added.

Moreover, thousands of existing loan accounts contain non-marginable securities of considerable value. Enforcing the six-month deadline, the association said, could prompt distressed sales, cause market volatility, inflict avoidable losses on retail investors and tighten liquidity.

It also pointed to the current strain on the capital market following the Middle East war and fuel crisis, mentioning that immediate enforcement would add to the pressure.

A measured transition is essential to protect investors, the letter said.

DBA said that an additional three-month extension, taking the compliance period to nine months until July 31, 2026, would allow brokerages to complete the necessary system and policy upgrades and ensure a smooth adjustment for existing loan clients.

“We respectfully seek your kind consideration and approval for an extension of the compliance timelines stipulated in the Margin Rules 2025,” added the association.