India has been buying Russian ​oil irrespective of US ‌sanctions waivers, Sujata Sharma, a joint secretary in the petroleum ​ministry, said on ​Monday.

“Regarding (the) American waiver on Russia, I would like to ​emphasise that we have ​been purchasing from Russia earlier ... I mean before waiver also, during ​waiver also, and ​now also,” she told a media ‌briefing.

“It is basically the commercial sense which should be there for us to purchase ... ​There ​is no shortage of crude. Enough crude has ​been tied up ​repeatedly ... and this, whatever waiver or no waiver, it will not ​affect,” she ​said.

Sri Lanka slapped a 50 percent surcharge on customs duties on vehicles Saturday in a bid to discourage imports and ease currency pressure stemming from the Middle East conflict.

The increase in taxes comes as the local rupee has sharply depreciated since the start of US and Israeli attacks on Iran, which prompted retaliation by Tehran.

“Given the current pressure on foreign exchange, we want people to delay their imports (of vehicles) by three months,” Junior Finance Minister Anil Jayantha Fernando told reporters in Colombo.

Vehicle were charged a customs duty of 30 percent but several other taxes make the effective import tax on a car more than 100 percent.

Sri Lanka has increased energy prices by more than a third since the start of the Middle East war and has rationed diesel and petrol in a bid to reduce the import bill.

Official figures show that Sri Lanka’s rupee has depreciated by 4.5 percent against the dollar so far this year.

Central Bank Governor Nandalal Weerasinghe told a parliamentary panel last week that the rupee would continue to slide unless global oil prices fell or Sri Lanka slashed energy imports.

Sri Lanka is emerging from its worst economic meltdown in 2022, when it ran out of foreign exchange to finance even the most essential imports such as food, fuel and medicines.

Since then, the country has been under a $2.9 billion IMF bailout programme.

This year has so far brought no relief to listed multinational companies (MNCs), with earnings declining in the first quarter compared to the same period last year as inflation has not let up.

Persistently high inflation, squeezing consumer demand, and rising operating costs due to increases in the costs of raw materials and energy have complicated the business environment for foreign firms operating in Bangladesh.Business strategy consulting

This is the backdrop to subdued economic activity. Sluggishness in business has been deepening since the political changeover in August 2024, while inflationary pressure has continued to erode consumers' purchasing power and corporate profitability, according to market analysts.

During the January-March quarter, things turned worse amid geopolitical tensions surrounding the US-Israel conflict involving Iran, which disrupted global energy supply chains.

Inflation hovered around 9 per cent during the quarter, and analysts warned that price pressures may persist in the coming months due to continuing global uncertainties, supply disruptions and elevated import costs.

Of the 13 multinational firms listed on the stock market, 11 have so far disclosed first-quarter financial results for 2026. Only four of these companies posted profit growth, while four others reported profit declines ranging from 12 per cent to 34 per cent.

Two other companies remained in the red due to heavy debt burdens, and one slipped into fresh losses.Economic trend analysis

Aggregate profits of the 11 firms fell 6 per cent year-on-year to Tk 12.20 billion in January-March this year, while combined revenue declined 4 per cent year-on-year to Tk 103 billion, according to company disclosures.

Marico Bangladesh and Berger Paints follow the April-March accounting year.

Md Akramul Alam, head of research at Royal Capital, said that apart from macroeconomic challenges, tight monetary and fiscal measures adopted by the Bangladesh Bank following the political transition had dampened economic activities.

Private sector credit growth remained weak at around 6 per cent early this year, reflecting poor business confidence and tighter lending conditions.

Mir Ariful Islam, managing director and CEO of Sandhani Asset Management, said multinational companies failed to achieve meaningful revenue growth at a time when consumers had little disposable income.

"Consumers cut back on discretionary spending as essential goods became more expensive," he said, adding that many companies were unable to pass rising costs on to consumers due to weakened purchasing power.

As multinational firms operate across diverse sectors, the reasons behind profit erosion vary from company to company.Politics

Higher finance costs heavily affected firms carrying large debt burdens, while reduced government spending under the Annual Development Programme adversely affected cement manufacturers.

Singer Bangladesh, for example, saw its losses widen 66 per cent year-on-year to Tk 578 million in the January-March quarter due mainly to a 41 per cent surge in finance costs linked to heavy borrowings.

The company attributed the weak performance to sluggish demand in the consumer electronics market, where domestic sales were hurt by inflation, geopolitical tensions, the national election and an extended Eid holiday.

Singer is also facing intensifying competition from local manufacturers such as Walton Group and Vision Electronics, alongside imported brands.

BAT Bangladesh posted a 34 per cent decline in profit to Tk 2.10 billion as lower sales and rising finance costs hit earnings. Net revenue plunged 23 per cent during the quarter through March.

The cigarette maker's domestic sales dropped 21 per cent, while leaf exports fell 23 per cent in the first quarter this year compared to the same quarter last year.Financial literacy course

Meanwhile, reduced government spending under the Annual Development Programme adversely affected cement manufacturers, according to Mr Alam. The overall construction sector remained under pressure due to high inflation and weaker infrastructure activity during the quarter.

Heidelberg Materials Bangladesh slipped into a loss of Tk 50 million in the March quarter, compared with a profit of Tk 197 million a year earlier, after sales dropped 16 per cent.

The company said higher prices of key raw materials squeezed margins, while intense competition prevented it from fully passing additional costs on to customers.

Another cement maker, LafargeHolcim Bangladesh, reported a 19 per cent year-on-year decline in profit to Tk 1.12 billion in the quarter as sales fell 6 per cent amid elevated inflation, tighter private sector credit and slower public infrastructure spending.

Rising energy costs linked to the Middle East crisis and persistent inflationary pressures reduced profitability, although operational efficiency and strict cost discipline helped cement makers preserve margins.Economic trend analysis

"Despite a challenging landscape defined by persistent inflation and higher energy costs, we remain committed to resilience through innovation and operational excellence," said Iqbal Chowdhury, chief executive officer of LafargeHolcim.

Fast-moving consumer goods companies also struggled with low sales as households prioritised essential food spending over discretionary purchases.

Unilever Consumer Care reported a 12 per cent year-on-year decline in profit, while Reckitt Benckiser Bangladesh posted a 28 per cent drop in earnings during the quarter compared to the corresponding period last year.

Masud Khan, chairman of Unilever Consumer Care, attributed the weaker business performance to macroeconomic and seasonal factors.

"A depressed economy, the national election and Ramadan all contributed to pressure on sales and margins," he said.

However, Bangladesh's two leading telecom operators managed to post profit growth through cost efficiency and stronger data revenue.Business strategy consulting

Grameenphone recorded revenue of Tk 37.6 billion in the January-March quarter, down 2 per cent year-on-year. Despite lower revenue, net profit rose 4.4 per cent due to improved cost management and lower finance costs.

Yasir Azman, chief executive officer of Grameenphone, said the company maintained stable financial and operational performance despite external challenges.

Robi Axiata posted an 86 per cent surge in profits, supported by strong revenue growth and disciplined cost management.

Ziad Shatara, managing director and CEO of Robi, said higher revenue was driven by robust growth in data usage and increasing numbers of 4G users.

Linde Bangladesh also reported a 36 per cent growth in profit, driven by higher sales and an 18 per cent decline in operating expenses following the divestment of its subsidiary last year.

Similarly, Bata Shoe posted marginal profit growth, supported mainly by Eid-centric seasonal sales, although overall retail demand remained weak.

Mr Ariful Islam of Sandhani Asset Management warned that corporate profits could remain under pressure over the next two quarters due to the ongoing energy crisis stemming from Middle East tensions.Financial literacy course

"Macroeconomic improvement and restoration of consumer confidence are crucial for business recovery in the coming months," said Mr Alam of Royal Capital.

Bangladesh is preparing another round of tariff rationalisation in the next fiscal year, cutting or easing protective duties on more than 200 imported goods, as part of a wider effort to modernise the trade system ahead of graduation from least developed country (LDC) status.

Under this plan, customs duties, regulatory duties and supplementary duties of the items are likely to be rationalised, according to finance ministry officials.

Last year, the government proposed cuts on around 350 tariff lines in the first phase of a broader reform programme. The upcoming budget for fiscal year 2026-27 is expected to continue that process.

Officials said the changes are designed to bring the trade system closer to global standards and prepare for the post-LDC era starting from November this year.

“We are continuing the process of tariff rationalisation to make the structure more competitive, transparent and compliant with international trade obligations,” said a senior official involved in the process.

Preferring anonymity, he also said that despite the planned reductions, sensitive sectors would continue to receive a degree of protection to allow local industries time to adjust to increased competition from imports.

According to finance ministry officials, Bangladesh will face more pressure to reduce trade barriers after the LDC graduation, as the country will lose several preferential trade benefits under the current international arrangements.

They also said the reforms are being designed in consideration of Bangladesh’s commitments under the World Trade Organization and ongoing talks on future trade agreements.

Bangladesh currently has 7,611 tariff lines. In other words, the country has 7,611 different product categories for which import taxes are set separately.

Its binding commitments at the World Trade Organization (WTO) cover 955 tariff lines, including 763 agricultural and 192 non-agricultural products. Tariffs on 60 of these lines were higher than the bound rates set when Bangladesh joined the WTO in 1995.

The National Board of Revenue (NBR) began tariff rationalisation in phases in FY23, following recommendations from a committee formed in 2021 to prepare for LDC graduation challenges.

In the past two years, tariffs on 60 items have been brought within bound rates based on those recommendations.

A related study also called for a review of supplementary and regulatory duties, noting that Bangladesh would need to compete without relying on import protection after graduation.

The study found regulatory duties on 3,565 tariff lines, about 47 percent of the total, ranging from 3 to 35 percent. Nearly 95 percent of revenue from regulatory duties comes from just 250 tariff lines.

Based on the recommendations, the NBR scrapped regulatory duties on 282 items between FY23 and FY25 and removed minimum import prices on 50 items.

Speaking on the implications of the country’s scheduled LDC graduation this year, trade expert Mostafa Abid Khan said that oversight was limited while Bangladesh remained an LDC, but that would change.

“But once we graduate, we will come under surveillance.”

He said the transition would not automatically force Bangladesh to change its policies, but verification from trading partners would increase.

He pointed out two immediate risks. These are exceeding agreed tariff limits on a small number of products and maintaining minimum import prices.

“In some cases, not many, only for a limited number of products, our bound tariff rates have already been exceeded,” said Khan.

He said, “Another issue is the minimum import value or minimum import price system. That cannot be maintained. It will not be allowed.”

He said Bangladesh must gradually lower protection and prepare industries for competition under future trade agreements.

M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said Bangladesh’s post-LDC challenge will centre on a sharp loss of trade competitiveness with the ending of preferential market access.

He said the impact of higher tariffs will largely depend on productivity and efficiency in the economy.

“Competitiveness comes from productivity, lower costs of doing business, and logistics efficiency, including speed to market,” he noted, adding that Bangladesh is currently weak in both productivity and competitiveness.

He also warned that the pharmaceutical sector will come under pressure after the loss of TRIPS-related flexibilities, particularly due to limited API production, weak backward linkages and patent constraints, which could push up medicine costs.

Reaz stressed that long-term reforms are essential, especially investment in skills, technology adoption, logistics and trade facilitation.

“Ideally, these reforms should have started five years ago, but they did not. We are still ignoring them. But this is a golden opportunity, and I would say almost the last opportunity.”

He said reforms should begin gradually from the next budget cycle, rather than being delayed or introduced abruptly after graduation.

Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said that the timing of graduation, whether soon or later, does not change the need for preparation.

“Whether LDC graduation happens in November or three years later, the government should identify the programmes needed and allocate resources accordingly,” he said.

Like Reaz, Razzaque highlighted the need for infrastructure and logistics reforms.

“Important infrastructure will be needed, and we must clearly define what is required. Implementation of the logistics policy will be essential, with clear responsibilities and timelines,” he added.

Calling for a structured approach, he said the transition should be guided by clear milestones.

“There should be a roadmap for what we want to achieve in the next one year, and in the next two years. A priority list has been prepared, and if implemented effectively, it could be a positive step,” he added.

India is scrambling to salvage a sinking rupee as surging oil prices linked to the Middle East conflict threaten to disrupt the world’s fastest-growing major economy.

The currency has dropped more than five percent since the crisis erupted in February, extending losses from 2025 and making it Asia’s worst-performing major currency in 2026 so far.

It hit a record low of over 96 to the dollar on Friday, prompting officials to signal that halting further depreciation is a key macroeconomic priority.

India’s central bank has already poured billions of dollars to stabilise the currency, curbed speculative trading and offered a special credit line to oil importers to ease dollar demand.

Prime Minister Narendra Modi has also urged voluntary austerity measures to rein in dollar-guzzling imports, including cutting down on gold buying and foreign travel for a year.

But the pressure persists.

“The whole system has been disturbed,” said Dilip Parmar of stockbroker HDFC Securities, citing heavy foreign investor outflows, weaker growth prospects and elevated crude prices.

“That is the basic problem which you’re seeing replicated in the fall of the rupee,” he said, noting that it was ultimately “a function of demand and supply” with dollar demand being higher.

The rupee’s slide comes as India faces a widening current account deficit driven by costly energy imports.

The gap is likely to be over two percent of GDP this fiscal year, more than double last year’s level and potentially the widest since 2012–13, according to Bank of America Securities estimates.

WIDENING DEFICIT

At the same time, foreign investors have dumped more than $20 billion in Indian stocks since the start of the Mideast conflict, the fastest pace on record, while dollar inflows have slowed, opening the possibility of a balance-of-payments gap as large as $67–88 billion.

The 2027 fiscal year “will be our third year of a balance-of-payment deficit, which is certainly unusual,” economist Dhiraj Nim of ANZ Research told AFP.

This strain has weighed on the rupee, prompting the central bank to defend it by burning through foreign exchange reserves -- now at around $697 billion, down from over $720 billion before the Middle East war.

While still covering about 11 months of imports, the decline underscores the strain.

A weaker rupee is rippling through the domestic economy.

Manufacturers and food processors, many dependent on imported raw materials priced in dollars, are seeing costs surge.

Smaller firms often lack the ability to hedge currency risks.

In Kerala’s cashew industry, which mostly imports raw nuts from Africa, the impact has been acute.

“Imports have become far more expensive for the local market,” said Rajmohan Pillai, who runs a cashew firm, adding buyers can now afford only about 90 percent of last year’s volumes.

He estimates more than 80 percent of processing units have shut in recent years, with rupee volatility a contributing factor.

‘LAST STRAW’

India’s currency decline has also hit students looking to study abroad.

Education consultants say studying in the United States now costs more than one million rupees ($10,450) extra compared with a year ago.

“This is the last straw,” said Meghna Sen, a 17-year-old aspiring psychology student.

“Now we have to track (the rupee) movement to check how much we need for our grocery budgets.”

The depreciation has punctured India’s ambition to become the world’s third-largest economy.

Modi, who once criticised his predecessors over currency weakness, has seen India’s global economic ranking dented because GDP comparisons are measured in dollars.

The country has slipped behind the United Kingdom to the sixth place according to IMF data, largely due to the rupee’s fall.

Nomura analysts warn more drastic measures may be on the anvil.

These include possible fuel price hikes, tighter controls on overseas remittances and steps to attract dollar deposits from non-resident Indians -- a playbook used in past crises.

Still, economists caution that intervention can only smooth volatility, not reverse underlying pressures.

“Fundamental factors” remain to be resolved, Nim said, adding “I would not even rule out an interest rate hike which squarely targets future inflation”.

The Reserve Bank of India knows what its options are, he said.

“All that remains is to see what it decides to choose.”

Royal Footwear Limited, a footwear manufacturing and export-oriented company, is planning to raise Tk12 crore from the capital market through the SME platform to support its business expansion and meet rising export demand.

The company has recently re-submitted its application to the Bangladesh Securities and Exchange Commission (BSEC) to issue 1.2 crore shares under the fixed-price method through an Initial Qualified Investor Offer (IQIO).

Earlier, in 2024, Royal Footwear had applied for the same fundraising plan. However, the company later withdrew its Initial Qualified Investor Offer (QIO) proposal, citing political uncertainty, the ongoing economic slowdown, and an overall unstable business environment that was not favourable for expansion at that time.

As the business climate has improved now, the company has decided to revive its fundraising plan and move forward with the application again to support its expansion and take advantage of growing export opportunities.

As a synthetic shoe manufacturer, Royal Footwear intends to utilise the funds for business expansion, working capital, and loan repayment.

Specifically, the allocation includes, Tk2 crore for purchasing raw materials and packing materials, Tk1.67 crore for the purchase of spare parts, Tk8 crore for loan repayment, and Tk0.33 crore for IQIO expenses.

Royal Footwear Limited shares some common directors with Al-Madina Pharmaceuticals, a publicly listed company on the SME platform. In February 2023, Al-Madina Pharmaceuticals raised Tk5 crore through the SME platform to support business expansion. In FY25, the company declared a 12% cash dividend for its shareholders.

According to Royal Footwear, the company—incorporated in 2014—plans to enter the capital market to expand its operations and strengthen compliance standards. The management says that some of its international buyers have encouraged listing in the capital market, believing it would improve governance, compliance practices, and alignment with global standards.

The company mainly exports to European and Asian markets, where demand for its products continues to grow steadily. In addition, the management views capital market financing as a more sustainable long-term growth option compared to relying heavily on bank borrowing.

In FY25, Royal Footwear Limited reported revenue of Tk52.91 crore, up from Tk52.34 crore in the previous fiscal year. Its profit after tax stood at Tk2.78 crore, which was Tk3.19 crore a year ago.

Earnings per share (EPS) reached Tk0.82, which was Tk0.94 a year ago. Its net asset value (NAV) per share, after revaluation, was Tk27.54.

Prime Bank Investment Limited is acting as the issue manager for the IQIO.

According to the company prospectus, the footwear industry in Bangladesh is growing rapidly due to increasing domestic and international demand, competitive production costs and favourable government policies.

Opportunities lie in export expansion, modern technologies, and sustainable practices. However, challenges such as quality control, compliance with international standards, and workforce development persist.

Major competitors of Royal Footwear include Apex Footwear, Bata Shoe Company (Bangladesh), Bay Emporium, Lotto BD, Jenny's Shoes, Craftsman Footwear and Accessories, and MK Footwear PLC.

To remain competitive, companies are adopting advanced technologies such as CAD/CAM systems and automated machinery to enhance efficiency and quality. Many firms are also obtaining global certifications, such as the Leather Working Group (LWG) certification, to boost credibility.

Despite obstacles like limited access to finance, infrastructure gaps, and labour shortages, the industry is making strides in environmental sustainability.

Investments in eco-friendly production methods and effluent treatment plants are helping to address environmental concerns and align with international standards, further strengthening the industry's growth potential.

The government has approved a Nationwide Telecommunication Transmission Network (NTTN) licence for Bangla Phone, marking the first major telecom infrastructure licence approval since the formation of the new government. The company’s earlier bid was rejected by the interim government.

This makes Bangla Phone the seventh company in the country to receive this licence.

According to official documents, the approval was granted on May 13 after the Bangladesh Telecommunication Regulatory Commission (BTRC) sought government clearance on May 10.

Under existing guidelines, the licence allows operators to build, maintain and manage nationwide fibre-optic transmission networks and share infrastructure with telecom operators and internet service providers.

BTRC requires prior approval from the Ministry of Posts, Telecommunications and Information Technology before issuing such licences. In May last year, the regulator sought approval, but the interim government rejected the proposal.

After the new government took office, BTRC again sought approval from the ministry.

It remains unclear under which guideline the licence was approved, as there is no separate NTTN category in the telecom licensing policy.

The policy, approved by the BTRC and later endorsed by the interim government, is now under review by the current administration.

Under the licensing policy, NTTN falls under the category of National Infrastructure and Connectivity Service Provider (NICSP).

Major General (retd) Md Emdad Ul Bari, chairman of the BTRC, said the licence was issued under the legacy framework.

“When the licensing regime changes, the licence will be migrated accordingly,” he said.

Explaining why the BTRC recommended the licence for Bangla Phone, Bari said an inspection team found that the company, which has been operating in Bangladesh since 2004, already has a fibre-optic transmission network spanning more than 13,000 kilometres.

“As the country needs more transmission network infrastructure and the operator already has an extensive fibre network, the regulator recommended issuing the licence following its application and investigation,” a BTRC official said.

Bangla Phone first applied for the licence in June 2011, but the ministry rejected it in July 2014. After the company filed a writ petition, the High Court directed a review, although the ministry upheld its decision in June 2016.

The company reapplied in September 2024, prompting the BTRC to form a committee in January 2025 to assess the request.

The committee cited the need to expand affordable transmission networks nationwide, particularly in remote areas.

Considering the limitations of the country’s existing transmission network and Bangla Phone’s previously permitted infrastructure, the committee recommended issuing a new NTTN licence, according to the documents.

As per BTRC documents, the country’s other six NTTN operators currently manage a combined 148,000 kilometres of optical fibre network.

The country’s first NTTN licence was awarded to Fibre@Home in 2008, and the company now operates around 50,000 kilometres of network infrastructure.

Summit Communications operates approximately 40,000 kilometres of network, while Bahon Limited has 7,817 kilometres. Bangladesh Telecommunications Company Limited manages around 40,000 kilometres, and Power Grid Company of Bangladesh operates roughly 8,500 kilometres. Bangladesh Railway, meanwhile, has about 3,800 kilometres of optical fibre infrastructure.

In addition, the government has laid nearly 35,000 kilometres of optical fibre under projects such as Info-Sarker 3 and Connected Bangladesh, while mobile operators collectively operate around 8,200 kilometres of fibre infrastructure

Last year, Amjad H Khan, chairman of Bangla Phone, told The Daily Star that the company’s four licences, including an International Internet Gateway (IIG) licence, were cancelled during the previous government’s tenure.

He said the country still lacks adequate telecom infrastructure, creating opportunities for more players to contribute.

New Zealand will continue duty-free and preferential market access for Bangladeshi goods after the country graduates from the least developed country (LDC) category, David Pine, New Zealand’s non-resident high commissioner in Dhaka, said yesterday.

New Zealand has been giving special importance to ensuring market access for Bangladeshi goods after the graduation, he said at a meeting with Commerce Minister Khandakar Abdul Muktadir at the secretariat in Dhaka, according to a ministry press statement.

He said that given the current global scenario, export market diversification is important, but so is diversifying import sources, adding that both countries stand to benefit from expanded bilateral trade.

New Zealand goods, he added, are known for reliability, high standards, food safety, and being free of genetically modified organisms, and the country is interested in establishing a stable, long-term trade structure.

Bangladesh exported $99.73 million worth of goods to New Zealand in fiscal year 2024-25, around 90 percent of which were garment items, according to the Export Promotion Bureau. In the July–April period of the current fiscal year, the figure stood at $78.93 million.

Both sides also expressed interest in exploring a trade deal such as a free trade agreement, to boost investment and bilateral trade, states the ministry statement.

Meanwhile, minister Muktadir said employment generation, and rapid growth of investment are important for Bangladesh’s sustainable LDC graduation.

He also noted that it is important to maintain the competitiveness of garment exports and ensure preferential market access for the country’s major apparel items.

The minister also asked the high commissioner to encourage entrepreneurs from his country to choose Bangladesh as an investment destination, as the Bangladesh government has taken many measures to ease doing business.

Bangladesh is scheduled to graduate from the LDC category on November 24 this year, though it has applied to the UN for a three-year deferment to 2029.

Some countries such as the UK, Canada, and Australia have already assured that they will continue preferential market access for Bangladeshi goods even after LDC graduation.

At the same time, Bangladesh has also been lobbying some of its trading partners to sign trade deals to retain duty-free market access in the post-LDC period.

Bangladesh risks losing $17.5 billion worth of exports annually after LDC graduation, as nearly 75 percent of its exports are LDC-induced.

Rapid expansion of Bangladesh’s liquefied petroleum gas sector without adequate safety compliance, technical oversight and trained manpower is increasing the risk of fires and explosions in homes, industries and transportation systems, experts and regulators warned yesterday.

They said most LPG-related accidents are preventable, but negligence, weak enforcement, poor maintenance and lack of safety awareness continue to expose consumers and workers to serious hazards.

The observations came at a roundtable titled “Bangladesh’s LPG Sector Faces Rising Safety and Regulatory Challenges”, jointly organised by the Bangladesh Energy Regulatory Commission, LPG Operators Association of Bangladesh, and Energy and Power magazine at the BERC conference room.

BERC Chairman Jalal Ahmed said, “Use of LPG is increasing day by day, but safety measures are not being taken properly even though it should be the first concern.”

Presenting the keynote paper, Prof Md Easir Arafat Khan of the Department of Chemical Engineering at BUET said LPG remains a safe, clean and reliable fuel only when handled properly.

He said improper handling, negligence and non-compliance with safety regulations were the primary causes of most major LPG accidents.

Prof Arafat said many facilities still lack certified gas detectors, emergency shutdown systems, alarms and adequate fire protection measures.

“In fire hazards, fuel, oxygen and ignition sources are required. Since LPG itself is the fuel and oxygen already exists in the atmosphere, preventing gas leakage and accumulation becomes the key safety priority,” he said.

“Delay in leak detection and emergency response can allow gas accumulation, which may eventually lead to catastrophic explosions or fires,” he warned.

“Weak regulatory enforcement and oversight are also contributing to the risks,” he added.

Prof Arafat said around 90 percent of autogas stations are reportedly operating without valid licences from the Department of Explosives, indicating major gaps in safety verification and regulatory compliance.

He warned that unauthorised and unlicensed LPG road tankers are contributing to unsafe transportation practices.

Mohammad Serajul Mawla, president of the Bangladesh LPG Autogas Station and Conversion Workshop Owners’ Association, said operators are struggling with growing safety and regulatory problems while continuing operations without proper licences and compliance.

“Non-standard equipment, lack of proper training and low awareness about safe use are major concerns,” Mawla said.

He also criticised the LPG regulations introduced in 2016, saying stakeholders were not adequately consulted about practical complications during policy formulation.

He demanded more realistic and enforceable amendments to the policy.

Muhammad Mehedi Islam Khan, assistant inspector at the Department of Explosives, said limited manpower makes it difficult to oversee explosives, gas and flammable liquids across the country.

Iqbal Bahar Bulbul, assistant director of Bangladesh fire service, said many domestic accidents occur after gas accumulates overnight inside enclosed kitchens because the cooker is not properly turned off at night.

Later, all it takes is a spark to cause an explosion, he said.

He recommended keeping fire extinguishers and fire blankets in kitchens as preventive measures.

Syeda Sultana Razia, member for petroleum at BERC, questioned the effectiveness of transportation safety oversight.

“Authorities should inspect not only licences but also emergency valves, firefighting systems and vehicle safety conditions,” she said.

She also questioned whether the BRTA is handling transportation oversight strongly enough.

Razia expressed concern over irregular propane-butane composition in LPG cylinders available in the market, warning that incorrect composition can alter cylinder pressure and create additional safety risks.

AKM Fazlul Hoque, joint secretary to the Power, Energy and Mineral Resources Division, acknowledged loopholes in existing regulations and said amendments are being prepared.

LOAB President Mohammed Amirul Haque urged all stakeholders to work together to improve safety standards.

For over a decade, governments have been allocating a disproportionately low share of the budget to renewable energy despite ambitious pledges, with nearly all power and energy allocations going to fossil fuel projects, a Centre for Policy Dialogue (CPD) study has found.

The study, unveiled at an event jointly organised by CPD and Dhaka Stream at Pan Pacific Sonargaon Dhaka yesterday, comes just weeks before the BNP-led government, which has signalled a push toward clean energy, is set to unveil its first full budget. The study was co-authored by Khondaker Golam Moazzem, research director of CPD.

Presenting the findings, Khalid Mahmud, programme associate at CPD, said the allocation trend from fiscal year 2015-16 (FY16) to FY26 shows fossil fuel projects consistently capturing over 90 percent of power and energy development spending.

The budget for the ongoing FY26 showed marginal improvement, with renewable energy receiving 4.6 percent, yet fossil fuel-based projects still dominated at over 95 percent, reflecting what he called limited structural rebalancing, he said.

Mahmud added that the FY26 budget also dropped a Tk 100 crore allocation for renewable energy that had been included the previous year, and introduced no new incentives for solar or other clean technologies.

Bangladesh’s total installed renewable energy capacity stands at approximately 1,745 MW as of May 11, with solar unit accounting for over 83 percent of that. In total, renewables represent just 5.4 percent of total installed capacity, well short of a target set years ago to reach 10 percent by 2021.

The compound annual growth rate of renewables from 2016 to May 2026 is 15.78 percent. Of 42 active development projects, only three focus on renewable energy.

Despite the wind energy potential in the coastal region, wind power installation remains very low, accounting for only about 62 MW, said Mahmud, noting that renewables in Bangladesh continue to remain constrained within the national budget framework.

“The national budget must treat renewable energy not as a sub-line within the Power Division, but as a strategic national investment priority deserving its own fiscal instrument,” said Mahmud.

The government should restore and progressively scale up ADP allocations for renewables from FY27 onward, pegged to annual MW deployment targets, he added.

Also speaking at the event, Rashed Al Mahmud Titumir, finance and planning adviser to the prime minister, said the energy sector is caught in a vicious cycle that is difficult to escape.

He also pointed out that the wide gap between installed generation capacity and actual utilisation has led to significant waste through capacity charges.

“This mismatch is leading to a significant waste of public resources, most notably through capacity charges. While capacity is built to meet expected future demand, much of it remains underutilised in practice, an issue clearly reflected in Bangladesh’s experience,” he said.

“Many of the contracts in this sector were not concluded in full compliance with established rules and procedures, yet they have been given legal protection. This raises serious concerns from the perspective of transparency and fairness,” he added.

The PM’s adviser went on to point out that instead of transitioning toward a sustainable system, the country has largely continued to rely on a fossil fuel–dependent structure. “Together, these three issues form the core structural challenges of the sector.”

Without addressing these deep-rooted problems, it will not be possible to break free from the current cycle, he said, adding that resolving the crisis will require collective and coordinated action.

Rehan Asad, the PM’s adviser on telecom and ICT, said land scarcity is a major constraint on large-scale renewable deployment, citing risks to crop production from ground-mounted solar.

Hence, he said the government is prioritising rooftop solar solutions. “The government is taking a broader approach, planning renewable energy development in line with the overall energy ecosystem.”

Iftekhar Mahmud, editor-in-chief at Dhaka Stream, raised concerns about the sector’s integrity, saying large-scale renewable projects are increasingly being dominated by groups linked to the fossil fuel industry, including individuals accused of land grabbing and money laundering.

Local innovators and specialist institutions are being sidelined, while genuine entrepreneurs must navigate approvals from as many as 32 government departments, he added.

He said this difficult process discourages real investors and creates opportunities for influential groups more interested in land acquisition and bank loans than energy production.

The cost of the project to build transmission infrastructure for supplying electricity from the Rooppur Nuclear Power Plant (RNPP) has been reduced by Tk 23.30 billion under a revised proposal after some expensive components were removed from the original design, officials said.

The project, titled "Development of Transmission Infrastructure for Power Evacuation of Rooppur Nuclear Power Plant", will now cost Tk 86.52 billion, down from the original estimate of Tk 109.82 billion.

At the same time, the implementation deadline for the project has been extended until June 2026.

The Planning Commission has recommended approval of the first revised proposal at a meeting chaired by Dr Nurun Nahar Chowdhury, member (secretary) of the Industry and Energy Division of the Planning Commission.

According to officials, the revised cost represents a 21.22 per cent reduction from the original estimate, resulting in significant savings for the government.

The project is being implemented by Power Grid Bangladesh PLC.

Under the revised financing plan, Tk 60 billion will come from the Indian line of credit (LOC), Tk 14.57 billion from the government of Bangladesh and Tk 11.71 billion from PGCB's own funds.

Officials said the sharp reduction in project cost was mainly achieved by dropping several costly components from the original project design.

One of the major changes was the exclusion of a planned 20-kilometre river-crossing transmission line over the Padma and Jamuna rivers after its estimated cost became exceptionally high during the bidding process.

The component will now be implemented separately under a domestic project.

In addition, delays in land acquisition and GIS substation construction led to the removal of the 230kV Dhamrai substation expansion from the Indian LOC funding package.

Despite the reduction in overall project cost, officials said the revised budget had to absorb higher foreign exchange costs during implementation.

The original project proposal in 2018 was prepared based on an exchange rate of Tk 80.83 per US dollar, while the revised budget considered an average exchange rate of Tk 103.79 per dollar.

Officials noted that although the project cost in dollar terms declined due to the removal of several components, the depreciation of the local currency offset part of the savings.

The extension of the project deadline will allow Power Grid Bangladesh PLC to complete the remaining high-voltage transmission lines, including the 150km Rooppur-Dhaka line and the 155km Rooppur-Gopalganj line, ensuring smooth transmission of nuclear power to the national grid.

Stocks opened the week on a negative note as renewed selling pressure dragged down key indices on the Dhaka Stock Exchange (DSE) today (17 May), reversing gains from the previous three sessions amid the absence of strong market catalysts.

The benchmark DSEX index plunged 19 points to settle at 5,226, while the blue-chip DS30 index declined 11 points to close at 1,970.

Market breadth remained negative, with 228 issues declining compared to 119 advancing and 45 remaining unchanged, reflecting a broadly bearish sentiment among investors.

Turnover also took a hit, dropping by 13% to Tk868 crore, indicating reduced participation as cautious investors opted to stay on the sidelines.

According to EBL Securities PLC, the market retraced into correction territory after a brief recovery phase, as sustained selling in major stocks continued to weigh on overall sentiment.

The session began on a relatively stable note, with indices hovering near the flatline in early trading. However, as the day progressed, selling pressure intensified across large-cap stocks, pushing the market into negative territory and extending the weakness observed toward the close of the previous session, it added.

Market analysts pointed to the lack of a decisive trigger to sustain the recent upward momentum in the selective stocks, leading investors to book profits and adopt a more defensive stance.

Heavyweight stocks such as Beximco Pharmaceuticals, Eastern Bank, BAT Bangladesh, NCC Bank and City Bank emerged as major index draggers, contributing significantly to the day's decline.

On the sectoral front, pharmaceuticals dominated turnover, accounting for 14.5% of total market activity, followed by general insurance at 14.2% and engineering at 12.7%.

Despite this activity, most sectors posted negative returns. Services suffered the steepest decline, falling 2.0%, followed by IT, which dropped 1.2%, and life insurance, which lost 1.1%.

In contrast, a few sectors managed modest gains, with non-bank financial institutions rising 4.2%, jute advancing 0.8%, and travel edging up 0.5%.

Among individual stocks, NCC Bank, Bangladesh National Insurance, Dominage Steel, Asiatic Laboratories and Techno Drugs topped the turnover chart, reflecting active investor participation in these counters.

The day's top gainers included Global Heavy Chemicals, which surged 10%, followed by Investment Corporation of Bangladesh, National Feed Mill, SK Trims, and Appollo Ispat, all posting notable gains of over 9%.

On the losing side, Apex Spinning led the decline with an 8.72% drop, followed by Apex Tannery, GSPO Finance, Peoples Leasing and Fareast Finance, all registering significant losses.

Meanwhile, the Chittagong Stock Exchange (CSE) also ended in the red. The CSCX index fell 33 points to 9,031, while the broader CASPI index declined 39 points to settle at 14,675. Turnover at the port city bourse stood at Tk32 crore, mirroring the subdued trading activity seen in Dhaka.

The government is planning to form a capital market reform commission to bring transparency and restore investor confidence, according to officials at the Ministry of Finance.

The decision was taken at a recent budget-related meeting. It forms part of the ruling BNP’s broader commitment to reviving the capital market, which featured in the party’s election manifesto.

Ministry officials said the commission will work toward overall market reform, with the government also planning to focus on building a stronger bond and equity market.

Besides, the government is also planning to take steps towards ensuring the use of blockchain technology, create an investment gateway for non-resident Bangladeshis, and attract greater foreign investment.

The meeting was informed that Dhaka Stock Exchange’s (DSE) market capitalisation has dropped by Tk 33,000 crore, or 4.4 percent, between January 2024 and February 2026.

The bourse’s benchmark index, the DSEX, fell from 6,153 to 5,600 points in the same period.

The move follows reform efforts under the interim government, which had formed a five-member taskforce to recommend changes to the stock market.

The taskforce, after extensive stakeholder consultation, proposed amendments to several securities rules, many of which the Bangladesh Securities and Exchange Commission (BSEC) has since adopted.

In a successor note before leaving office, former finance adviser Salehuddin Ahmed said the BSEC was restructured after the interim government assumed office, and an external investigation committee was formed to look into 12 irregularities from the previous regime.

A taskforce was also formed that worked on reforming three major rules regarding margin loans, mutual funds and public offering issuance, he added.

Apart from these, another committee was formed to strengthen the BSEC and improve the capital market which also submitted a report including recommendations.

The recommendations were sent to relevant ministries to implement, Ahmed added in the note.

Bangladesh Bank (BB) has introduced a monthly performance review system to strengthen the implementation of the Bangladesh Bank Service Standard, aiming to improve efficiency, accountability, and service delivery across all operational units.

The decision was taken at the inaugural performance review meeting held on Sunday with Governor of Bangladesh Bank Md Mostaqur Rahman in the chair. Deputy governors and executive directors attended it.

The service standard framework sets mandatory timelines for processing and resolving cases across all departments and branch offices, serving as a key benchmark for operational efficiency and service quality.

During the review, 90 departments and branch offices were assessed based on compliance with service standard timelines. The findings showed that 41 units (45.56 percent) achieved 100 percent compliance, while 32 units (35.56 percent) maintained around 90 percent compliance.

In addition, 11 units recorded compliance between 80 and 89 percent, and 6 units fell within the 67 to 79 percent range.

Overall, more than 81 percent of the evaluated units were found to be performing at a high compliance level, although around one-fifth of the offices demonstrated notable efficiency gaps requiring targeted intervention.

The Governor directed that performance reviews be conducted on a monthly basis under his direct supervision to ensure continuous monitoring and timely corrective measures.

He instructed all departments and branch offices to strictly adhere to service standard guidelines and ensure that all cases are processed within the prescribed timeframe, emphasizing that 100 percent compliance should be the institutional benchmark.

At the same time, he assured full institutional support to units facing difficulties, particularly in addressing procedural and operational bottlenecks affecting service delivery.

BB said the combined approach of strict accountability and supportive intervention is expected to enhance overall institutional performance and improve public service delivery standards.

The UAE is to fast-track construction of a new oil pipeline bypassing the Strait of Hormuz, official media said on Friday, after the Middle East war crippled exports through the vital waterway.

The West-East Pipeline will double state oil giant ADNOC’s capacity through Fujairah port and is expected to become operational next year, the Abu Dhabi Media Office said.

Abu Dhabi Crown Prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan “directed ADNOC to accelerate delivery of the project”, the report said.

An existing, 360-kilometre (224 miles) pipeline from the Habshan oil fields to Fujairah has a capacity of 1.8 million barrels per day, according to the Port of Fujairah website.

The UAE, which made waves by quitting oil cartel OPEC at the start of this month, has plans to raise production capacity to five million barrels a day by next year.

Oil facilities in Fujairah have been repeatedly struck during the Middle East war. Three Indian nationals were wounded in the latest attack on May 4.

Dhaka Stock Exchange and Swisscontact Bangladesh have signed a memorandum of understanding (MoU) to promote sustainable and inclusive economic development through Bangladesh’s capital market system, with a special focus on SMEs and sustainable financing instruments.

The agreement was signed on Saturday at the DSE premises by Managing Director Nuzhat Anwar and Swisscontact Bangladesh Country Director Helal Hossain in the presence of senior officials from both organisations.Geographic Reference

Under the partnership, the two organisations will jointly work to strengthen SME access to capital markets, improve corporate governance and compliance standards, and promote sustainable financing initiatives in Bangladesh.

The collaboration will focus on strategic sectors including ready-made garments (RMG), healthcare and agriculture, while also supporting initiatives related to environmental, social and governance (ESG) practices, sustainability reporting, financial inclusion, climate resilience, entrepreneurship development, trade facilitation and skill enhancement, says a press release.

Speaking at the signing ceremony, Ms Anwar said the initiative was implemented quickly through strong coordination and clear planning between the two institutions.

“This initiative has been materialised within a short period because of mutual coordination and a shared vision,” she said.Bangladesh trade analysis

She noted that small and medium enterprises require extensive support in capacity building, governance practices and regulatory compliance to enhance their participation in the capital market.

“SMEs are one of the key drivers of the economy, but many of them still lack the institutional preparedness required to access long-term financing from the capital market,” Ms Anwar said.

She added that the partnership would help create a stronger ecosystem for SMEs by offering training, advisory services and awareness programmes aimed at improving financial literacy and governance standards.

Mr Hossain of Swisscontact Bangladesh said SMEs remain a vital pillar of Bangladesh’s economy, although they continue to face challenges in financing, competitiveness and compliance.

“In the current economic context, creating opportunities for SMEs to raise alternative financing and equity-based capital is extremely important,” he said.Global economy forecast

He expressed optimism that the collaboration with DSE would help promising SMEs gain access to the capital market and reduce their dependence on traditional bank financing.

According to officials, the partnership will also facilitate joint capacity-building programmes, incubation support, workshops and advisory services to encourage wider participation in the capital market ecosystem.

The two organisations will additionally cooperate in developing sustainable financing products, including green bonds, sustainability-linked bonds, sukuk and blended-finance models to support environmentally and socially responsible investments.

Market analysts say the collaboration comes at a time when Bangladesh’s capital market is seeking to diversify financing sources and deepen participation from SMEs and sustainable enterprises.

They believe the initiative could help strengthen the country’s sustainable finance framework and support long-term economic resilience through broader access to capital market financing.

Dhaka division received nearly half of Bangladesh's total remittance inflows in March 2026, ahead of Chattogram and Sylhet divisions, according to a Bangladesh Bank (BB) report.

The division accounted for $1.85 billion, or 49.55 percent of the $3.75 billion that flowed in during the month — up $456.58 million, or 13.85 percent, from March 2025.

Chattogram division ranked second with $1.16 billion (31.03 percent), followed by Sylhet at $301.10 million (8.02 percent), according to BB’s Monthly Report on Workers' Remittance Inflows.

BB noted that inflows typically rise during religious festivals, at the end of the fiscal year in June, and at the close of the calendar year in December.

At the district level, Dhaka topped the list with $1.35 billion, ahead of Chattogram ($413.04 million), Cumilla ($243.40 million), and Sylhet ($161.13 million).

Bangladesh’s ambition to become a $1 trillion economy by 2034 is bold, inspiring and politically powerful. It reflects confidence in the country’s development journey and its desire to emerge as a major economic force despite evolving challenges. For a nation transformed through decades of resilience, the goal naturally captures the public imagination. Yet while the slogan is compelling, the economics behind it are more complex.

The economy is currently valued at about $470 billion. To reach $1 trillion within a decade, Bangladesh needs close to 10 percent annual GDP growth in dollar terms. That is where the difficulty lies. GDP measured in US dollars depends not only on domestic production growth, but also on inflation and exchange rate stability.

The distinction matters. If Bangladesh achieves 5 percent real growth and 7 percent inflation, the economy could expand by roughly 12 percent in nominal taka terms. But if the taka loses 3 percent of its value against the dollar each year, dollar-based GDP growth falls to about 9 percent, below what is required. In simple terms, Bangladesh may grow strongly at home yet still struggle to hit the trillion-dollar target if currency depreciation continues.

This makes the exchange rate policy central to the debate.

The Bangladesh Bank (BB) is already navigating a delicate balancing act. It must rebuild foreign exchange reserves after they fell sharply from $48 billion in 2022, while preserving export competitiveness. A weaker taka helps exporters, particularly the ready-made garments sector, remain competitive. But the same weaker currency reduces the economy’s size in dollar terms.

This creates a policy trilemma. Bangladesh cannot fully maximise three objectives at once: a strong currency, export competitiveness and reserve accumulation. A stronger taka may lift GDP in dollar calculations, but would hurt exports. A weaker taka supports exports and reserve rebuilding but delays the trillion-dollar milestone. At any given time, policymakers can effectively prioritise only two.

Global conditions further complicate matters. Rising geopolitical tensions and volatile oil prices increase import costs, strain reserves and fuel inflation. As an energy-importing economy, Bangladesh remains exposed to external shocks that can weaken the taka and disrupt growth projections.

None of this makes the trillion-dollar goal unrealistic. It does mean the path must rest on structural reform rather than political arithmetic.

The real route to a trillion-dollar economy lies in productivity growth. Bangladesh must diversify beyond garments into sectors such as pharmaceuticals, IT services, electronics, light engineering and higher-value services. Greater industrial depth, stronger foreign direct investment and technological upgrading are essential. Without this transformation, growth may continue, but not at the scale or quality required.

Human capital is equally important. Skills development, better education and higher labour productivity must become national priorities. A larger economy is not built by numbers alone; it is built by a more capable workforce.

Macroeconomic discipline will also matter. Inflation control, stable fiscal management and a predictable exchange rate policy are crucial. Gradual and manageable depreciation may prove wiser than abrupt adjustments or artificial currency support.

Ultimately, the trillion-dollar question is not simply whether Bangladesh can reach a number by 2034. It is whether the country can build an economy strong enough to make that number inevitable.

If Bangladesh sustains solid growth, preserves stability and implements meaningful reforms, it could approach $900 billion by 2034 and cross $1 trillion soon after. Reaching the milestone in 2035 instead of 2034 would not be a failure; it would be economic realism.

The true success of Bangladesh’s strategy will not be measured by a political deadline alone, but by whether it builds productive strength, resilience and institutional capacity, alongside a governance model capable of sustaining prosperity long after the trillion-dollar headline is achieved.

The writer is an economic analyst and chairman at Financial Excellence Limited

G7 finance ministers gathering in Paris on Monday will try to find common ground on tackling global economic tensions and coordinating critical raw material supplies, even as geopolitical differences threaten to test the group's cohesion.

The two-day meeting follows a summit between US President Donald Trump and Chinese President Xi Jinping in Beijing that yielded few concrete economic breakthroughs, as tensions over Taiwan and trade simmered beneath a display of diplomatic cordiality.

At the core of the Paris agenda will be what French Finance Minister Roland Lescure described as deep-seated global economic imbalances that are fuelling trade friction and risk a turbulent unwinding in financial markets.

"The way the global economy has been developing for the past 10 years or so is clearly unsustainable," he said, pointing to a pattern in which China under-consumes, the United States over-consumes and Europe under-invests.

Update from US-China summit

Lescure, who will host the talks, said the G7 offered an opportunity for frank dialogue among allies at a time of widening disagreements with Washington.

"These discussions are not easy. I'm not going to tell you that we agree on everything, including, of course, first and foremost with our American friends," he told journalists ahead of the meeting.

Finance ministers will be looking for an update on US-China relations following the Trump-Xi summit and the latest US efforts to re-open the Strait of Hormuz, as the Trump administration allowed a sanctions waiver on Russian seaborne oil to lapse on Saturday.

Merely agreeing each side bears some responsibility for the trade and capital flow imbalances would be a success, French officials involved in preparations said, though the US side is likely to be reluctant.

Fallout from Mideast conflict

"I'd be shocked if they're going to sign on to the idea this is the US's fault in some way," said Philip Luck, director of the economics programme at Washington's Center for Strategic and International Studies.

Ministers are also due to discuss the economic fallout from the Mideast conflict and volatility on global bond markets, which are of particular concern to Japan.

Britain's finance ministry said Rachel Reeves would "press for coordinated action to limit inflation and supply chain pressures, and restore freedom of navigation through the Strait of Hormuz" at the meeting, and also reassert the government's desire to reduce trade barriers between Britain and the European Union.

Divisions within the G7 complicate efforts to project unity as ministers prepare for a 15-17 June leaders summit in the spa town of Evian.

Critical mineral dependence

A second priority will be critical minerals and rare earths, where G7 governments are trying to coordinate efforts to reduce reliance on China, which dominates supply chains vital for technologies such as electric vehicles, renewable energy and defence systems.

Lescure said the G7 would push for stronger coordination to monitor markets, anticipate disruptions and develop alternative supplies, including through joint projects spanning allied economies. The aim is to ensure that "no country can ever again have a monopoly" over such materials, he said.

G7 countries are trying to agree on a common toolbox of measures to stabilise markets and encourage domestic investment, possibly through price floors for producers, pooled purchases and also tariffs.

Nonetheless, the initiative is a long-term project that would yield little at the finance ministers' meeting, said Luck, who worked on the issue in the Biden administration.

"We are in the very early innings of figuring this out," he said. "I don't think there's agreement on a strategy even within the US government, let alone being able to articulate that in a convincing way to our partners in order to get them to sign on."

Bangladesh’s next national budget should focus on strengthening economic resilience rather than increasing spending, said Zahid Hussain, former lead economist at the World Bank’s Dhaka office.

He warned that weak fiscal buffers, high inflation, and serious vulnerabilities in the financial sector have left little room for a large or expansionary budget.

In an interview with The Daily Star, Hussain said the economy is facing prolonged external pressures stemming from elevated global fuel, fertiliser, and commodity prices, limiting Bangladesh’s ability to absorb further shocks.

“The economy is now facing a global trade shock,” he said, noting that import costs have risen sharply while access to essential goods has become increasingly difficult. Even if geopolitical tensions ease, prices are unlikely to return to pre-war levels anytime soon, he added.

Hussain explained that Bangladesh is paying more for imports but receiving less in return, resulting in a net income loss. “The key question is how we will absorb these losses,” he said.

He added that policy choices are increasingly constrained by limited fiscal space.

“Except for foreign exchange reserves, most buffers are nearly exhausted,” he said, noting that inflation remains above 9 percent and the banking sector is under severe stress.

He said the economy is now facing stagflation -- high inflation, low growth and weak shock absorption capacity -- while election promises and the new government’s budget plans are increasing pressure to raise spending.

“How do we balance these conflicting pressures?” he asked.

LIMITED SPACE FOR EXPANSIONARY BUDGET

Hussain said printing money is not a viable option because inflation is already high and could rise further.

“If inflation were very low, money financing might have been considered, but that is not the case,” he added.

He also said domestic borrowing is constrained as interest rates are already high, with businesses facing double-digit lending rates. Higher government borrowing would push rates up further and restrict private credit.

A large portion of the budget is already locked into mandatory spending.

IMF projections suggest interest payments could reach Tk 1.7 lakh crore in FY27. In FY26, salary expenditure is close to Tk 85,000 crore, while pension payments exceed Tk 35,000 crore.

“These are mandatory costs that are difficult to reduce,” he said, adding that many development projects are already in advanced stages and cutting them would waste past investment.

World Bank studies show that 70 to 80 percent of Bangladesh’s public spending is pre-committed, compared to 50 to 60 percent in other lower-middle-income countries and 40 to 50 percent in better-governed Asean economies.

With inflation eroding purchasing power and weak real wage growth, Hussain said tax revenue cannot rise sharply. Bangladesh typically struggles to collect even Tk 4.5 lakh crore.

Given the constraints, he said, “If we respect these constraints -- no money printing, limited domestic borrowing, large fixed expenditures, and rising interest costs -- then a realistic revenue target would be around Tk 5 lakh crore, with a deficit of about Tk 3 lakh crore.”

“That would put the maximum feasible budget size at roughly Tk 8 lakh crore.”

He warned that financing even this deficit would be challenging. Domestic borrowing needs could exceed safe limits unless external financing rises significantly.

Net external financing may need to reach Tk 1.1 lakh crore, while domestic borrowing of around Tk 1.9 lakh crore would still pressure financial stability.

“For this reason, the overall budget size would need to remain tighter,” he said.

He added that concessional financing from the World Bank, ADB, IMF, JICA and other development partners could allow a slightly larger budget without stressing domestic banks.

“Even so, under realistic assumptions, I do not see the government implementing a budget much beyond Tk 7.5 to Tk 8 lakh crore,” he said.

STRUCTURAL REFORMS OVER SPENDING PUSH

On the IMF programme, Hussain said challenges go beyond subsidy cuts or electricity price adjustments.

Key reforms in tax policy, exchange-rate management, banking sector restructuring, Bangladesh Bank governance, and separating the National Board of Revenue remain incomplete.

“I don’t think simply increasing electricity prices will bring the IMF programme back on track,” he said.

Hussain said Bangladesh no longer has the option to prioritise either inflation control or growth.

The problem, he said, is supply-side constraints rather than weak demand.

“If you don’t have diesel, LNG, or fertiliser, higher government spending will not increase growth,” he said. “Instead, it will mostly lead to higher prices or exchange rate pressure.”

He said the budget should prioritise resilience by protecting food security, energy security, healthcare, and social protection.

“You cannot cut spending on vaccinations, medicines, schools, or support for the poor and vulnerable,” he said.

However, he warned against broad subsidies that often benefit higher-income groups more than those in need.

Hussain said low tax collection is mainly due to a complex tax system and weak administration.

Multiple VAT and customs duty rates, he said, create corruption risks and revenue leakage.

“If the rate structure is simplified and the tax system is automated, revenue can increase without adding pressure on taxpayers,” he said.

He called for urgent reforms in energy, banking, ports, regulation and skills development.

Bangladesh has around 30,000 megawatts of installed power capacity, while peak summer demand is about 18,000 megawatts.

“The problem is not power generation capacity,” he said. “The real issues are fuel supply and limitations in the transmission grid.”

He also highlighted inefficiencies in ports, complex regulations, and weak vocational training.

“Bangladesh exports labour but imports skills,” he said.

Hussain said structural reforms, rather than higher spending, now offer the most practical path to improving investment, lowering costs, and stabilising the economy.

He said Bangladesh is still facing a global trade shock, with both import prices and volumes under pressure.

“Prices have increased, and even if you are willing to pay more, it is still difficult to get the required quantities, especially as global supply chains remain strained,” he said.

He concluded that Bangladesh needs a more productive economy driven by reforms, not a larger budget based on fragile borrowing.

“Without such reforms, the economy could remain stuck in repeated crisis management, while private investment confidence continues to weaken,” he said.