Japan is looking to increase imports of garment products from Bangladesh, with Japanese companies seeking local business partners to strengthen sourcing under the Economic Partnership Agreement (EPA) signed between the two countries.

The interest was expressed at a meeting held yesterday between leaders of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and representatives of Japanese businesses, including officials from the Japanese Commerce and Industry Association in Dhaka (JCIAD), the Japan External Trade Organization (Jetro) Dhaka office, and the Japan-Bangladesh Chamber of Commerce and Industry (JBCCI).

The chairman and chairman-elect of the Apparels and Textiles Committee of JCIAD also attended the meeting to discuss potential sourcing opportunities from Bangladesh.

Both BGMEA and Japanese entrepreneurs are keen to deepen engagement between businesses in the two countries and strengthen partnerships to source more apparel products from Bangladesh, said Kazuiki Kataoka, country representative of Jetro Dhaka, over the phone after the meeting.

This was the first meeting between Japanese apparel entrepreneurs and BGMEA leaders. It is expected to pave the way for expanded business ties between Bangladesh and Japan, particularly through the proposed committee, Kataoka said.

“We would like to collaborate in identifying factories capable of meeting requirements to export to Japan,” the Jetro country representative said.

Suitable manufacturing facilities are needed to supply the right products and expand Bangladesh’s apparel exports to Japan, he said, adding that the country currently exports more than $1.4 billion worth of garment products to Japan annually.

Of Bangladesh’s total exports to Japan, around 80 percent comprise garment products, while the remaining 20 percent consists of other goods, he said.

Entrepreneurs from both countries are eager to see the EPA, signed on February 6 this year, implemented to elevate bilateral trade and investment, Kataoka added.

The membership of JCIAD has been growing steadily, reaching 163, reflecting Japanese businesses’ confidence in expanding operations in Bangladesh, he said.

Meanwhile, the Special Economic Zone (SEZ), dedicated to Japanese entrepreneurs in Araihazar, Narayanganj, has already become operational and is expected to accommodate more Japanese companies in the future. Japanese investors are seeking to expand or relocate operations to Bangladesh under Japan’s China Plus One strategy, adopted in 2008.

JBCCI President Tareq Rafi Bhuiyan Jun said a committee named Market Strategy for Development of Japan Markets has been formed to help expand trade and business relations between the two countries.

Japan could serve as an important market for Bangladesh as the country seeks to offset the slowdown in garment exports in recent months. Bangladesh is also looking to expand exports to Asian markets amid volatility in global supply chains. The newly formed committee and BGMEA discussed preparing a model list of BGMEA-affiliated supplier companies, he said.

Under the EPA, Bangladeshi garment products will continue to enjoy duty-free access to the Japanese market from the date of implementation. At present, Bangladeshi apparel exports benefit from preferential market access under the least developed country (LDC) category, and Japan has already extended these facilities until 2029 following Bangladesh’s graduation from LDC status.

BGMEA President Mahmud Hasan Khan said the association aims to increase garment exports to Japan to $3.0 billion from the current $1.4 billion within the next one to two years, with Asian markets such as Japan, South Korea and Turkey now receiving greater focus as part of export market diversification efforts.

During the first 10 months (July-April) of FY26, the current account recorded a deficit of $1.07 billion, compared with a deficit of $1.64 billion during the same period of the previous fiscal year. As a result, the deficit narrowed by $563 million.

The Bangladesh Bank released the latest balance of payments data today (8 June).

Experts say remittances were the main factor behind the improvement in the current account. Despite the trade deficit widening by more than $4 billion, robust remittance inflows helped offset the impact and reduce the overall deficit.

Economists note that the current account is one of the most important indicators within the balance of payments. An economy generally performs better when the current account is in surplus. However, despite strong remittance growth, the current account remains in deficit because of the country's large trade gap.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said, "Although the trade deficit has increased, higher remittance inflows have prevented a deterioration in the current account. Remittances have risen by more than $5 billion. Achieving a current account surplus would strengthen the economy."

He added, "Even with robust remittance inflows, we are unable to turn the current account positive. This reflects a structural weakness. The economy needs to improve through stronger current account balances, but we have not been able to reach that stage. The persistent trade deficit is preventing us from breaking out of this trend."

The current account is a key component of a country's balance of payments, covering net trade in goods and services, income from abroad, and current transfers such as remittances.

According to Bangladesh Bank data, remittance inflows during the first 10 months of the current fiscal year increased by 19.5% compared with the same period a year earlier. Expatriate Bangladeshis sent $29.33 billion during July-April of FY2025-26, up from $24.54 billion during the corresponding period of FY2024-25.

Trade deficit widens as exports decline
Bangladesh Bank data show that the trade deficit widened to $22.21 billion during the first 10 months of FY2025-26, compared with $18.23 billion during the same period of the previous fiscal year.

Economists identify weak export performance as the main reason behind the widening trade gap.

Exports during the first 10 months of the current fiscal year totalled $36.02 billion, down from $36.57 billion a year earlier. This represents a decline of about 1.5%.

Meanwhile, imports increased by nearly $4 billion. Imports reached $58.23 billion during the period, compared with $54.80 billion during the same period of the previous fiscal year.

Mustafizur Rahman said, "The trade deficit has widened because imports have increased by nearly $4 billion, while exports have not grown and have instead declined."

He added, "Exports are not increasing at the same pace as imports. The slowdown in export growth is contributing to the widening trade deficit. Imports are likely to increase further in the future, which will add pressure. Unless exports rise, the trade deficit will continue to expand."

He noted that higher imports are generally positive for the broader economy, but stressed that greater efforts are needed to boost exports.

Financial account records surplus
According to Bangladesh Bank data, the financial account posted a surplus of $4.47 billion during the first 10 months of FY2025-26, compared with $1.13 billion during the same period of the previous fiscal year.

Economists said the improvement was mainly driven by a positive trade credit position.

Trade credit stood at a positive $3.57 billion during July-April of the current fiscal year, compared with a deficit of $1.47 billion a year earlier.

Trade credit refers to goods or services received with payment deferred to a later date. In balance of payments accounting, it is treated as a short-term capital flow under the financial account because it finances imports.

Overall balance of payments position improves
During the first 10 months of FY2025-26, the overall balance of payments recorded a surplus of $3.74 billion, compared with a deficit of $655 million during the same period of the previous fiscal year.

The improvement was primarily driven by the stronger performance of the financial account, which helped significantly improve the country's overall balance of payments position.

Zahid Hussain, former lead economist, World Bank Dhaka office said, "We are beginning to see the impact of the global price increases due to the [Iran] war on our trade balance.

"The trade deficit increased as import payments rose significantly, largely due to hefty increase in payments for the import of crude oil, refined oil and fertiliser. Despite strong remittances, the current account deficit almost doubled in April relative to March largely due to increased trade deficit."

Thanks to surplus in the financial account, surplus in the overall balance of payments has increased, he said.

"This is primarily due to increased trade credit which predominantly reflects the growth of import payments. Since trade credit is very short term, the rise we are seeing now cannot be sustained. This means the financial account will face pressure going forward unless other items, especially MLT disbursements pick up," the economist explained.

Overall the BOP shows some resilience to heightened external pressure, thanks largely to remittances, but this cannot be taken for granted, Zahid Hussain added.

Bangladesh has set itself an ambitious objective: developing a creative economy that can generate jobs, exports and investment through media, entertainment and digital content.

Policymakers increasingly recognise that film, television, streaming platforms and digital creators can become important drivers of economic growth, employment and global reach of Bangladeshi content.

For this ambition to succeed, Bangladesh must also address a growing challenge that threatens the long-term sustainability of the media and entertainment ecosystem.

A creative economy can only thrive when creative assets have value.

When intellectual property is routinely copied, redistributed and consumed without authorisation, the incentives that drive investment, innovation and content creation begin to erode.

Piracy is therefore no longer merely a copyright issue -- it is a direct challenge to Bangladesh's creative economy ambitions.

In Bangladesh today, illegal access to broadcast and entertainment content is no longer confined to obscure websites. It is becoming increasingly normalised.

What is often described as “piracy” reflects a broader shift in content distribution.

Content is increasingly accessed through a mix of illicit streaming services, social media streams and unlicensed platforms that carry broadcast signals over IP-based networks outside established licensing frameworks.

It is the emergence of an unregulated digital distribution layer operating alongside, and increasingly replacing the formal system.

As internet penetration rises and streaming becomes mainstream, piracy is expanding rapidly.

Bangladesh, with its growing appetite for sports, entertainment and digital content, is entering a critical phase where piracy risks becoming deeply entrenched across the content ecosystem.

While the immediate impact falls on broadcasters, rights holders and content distributors, the broader implications extend across the creative economy.

For a country seeking to expand the global reach of its content and attract investment into media and entertainment, ensuring that those who create, distribute and invest in content can capture its value becomes increasingly important.

Every successful creative economy is ultimately built on intellectual property.

Whether through long-form, short-form or creator-led content, the underlying asset is content that can be licensed, monetised and exported.

That value chain also depends on broadcasters, Pay TV operators, streaming platforms and licensed distribution networks that invest in acquiring, distributing and monetising local and international content.

Piracy directly undermines this model.

When it becomes widespread, legitimate revenues decline, weakening incentives to invest in new content and reducing the broader economic contribution of the formal media ecosystem.

Investors become more cautious, content budgets shrink, and creators struggle to capture the value of their work.

The consequence is not merely lost revenue today but less content, less innovation and fewer opportunities tomorrow.

Over time, this can also limit job creation across the broader media and entertainment value chain, from production and distribution to creative and technical professions.

Ambitions to increase the global reach of Bangladeshi films, television programmes and digital content will be strengthened by a regulatory environment that gives creators, investors and distributors confidence that intellectual property rights are effectively protected. Bangladesh already has a legal framework.

The Copyright Act 2023 prohibits unauthorised distribution and retransmission of broadcast content, including digital distribution over IP networks.

The law provides both civil and criminal remedies against infringement. Yet piracy continues to thrive because the challenge is not legal absence but enforcement.

As broadcast and internet-based distribution increasingly converge, regulatory responsibilities are spread across multiple authorities, including the Ministry of Information and Broadcasting (MoIB), the Bangladesh Telecommunication Regulatory Commission (BTRC) and relevant authorities responsible for digital governance and cybersecurity.

Addressing piracy in its current form therefore requires coordinated enforcement rather than isolated action.

Piracy itself is evolving as content distribution becomes increasingly digital and interconnected.

It increasingly occurs through digital and IP-based platforms operating outside established licensing and regulatory frameworks, creating new challenges for enforcement. The implications extend beyond lost revenue.

These networks often operate outside regulatory visibility, relying on foreign-hosted infrastructure and opaque payment channels, while exposing consumers to cybersecurity risks and weak protections.

Piracy is therefore not only a content issue but also a broader question of digital governance and ecosystem integrity.

Digitalisation is often presented as an important solution to piracy, but not all digital systems are equal.

To be effective, digitalisation must be supported by technologies and systems that enable traceability, content protection, compliance and accurate subscriber reporting.

Without these safeguards, digital platforms can simply make unauthorised redistribution more efficient. Effective digitalisation should strengthen visibility, accountability and enforcement.

The challenge facing Bangladesh is therefore not one of legislation but of execution.

Two priorities stand out. First, more effective enforcement of existing laws, supported by stronger coordination between broadcasting, telecommunications and digital governance authorities to address increasingly complex digital distribution models.

Second, a structured approach to digitalisation that prioritises transparency, traceability and system-wide accountability.

As Bangladesh seeks to strengthen its position in media and entertainment, the protection and commercialisation of creative assets will become increasingly important to attracting investment, supporting innovation and fostering sustainable growth.

In this context, piracy should be viewed through a broader lens of economic competitiveness and digital governance.

Bangladesh's creative economy will increasingly depend on its ability to create, monetise and export intellectual property.

As media, entertainment and digital content become more important drivers of growth, ensuring that creators and investors can realise the value of their work will be essential.

Ultimately, the success of the creative economy will depend not only on producing more content, but also on creating the conditions that allow that content to generate lasting economic value.

While an established legal framework exists, the opportunity now lies in strengthening enforcement, improving coordination across institutions and building a digital ecosystem that supports innovation, investment and accountability.

Doing so can help create the conditions for a more vibrant media and entertainment sector and support the continued growth of Bangladesh's creative economy.

The country’s steel manufacturers yesterday urged the government to reverse the recent electricity tariff hike, warning that it will increase production costs, push up steel prices and slow economic activity.

The government raised electricity tariffs for industrial consumers by about 17 percent, effective from June. Industry leaders said the move comes at a time when steelmakers are already struggling with weak demand, high borrowing costs, a weaker taka, gas shortages and difficulties in opening letters of credit.

“The new tariff alone will increase steel production costs by around Tk 1,785 per tonne,” said Mohammad Jahangir Alam, president of the Bangladesh Steel Manufacturers Association (BSMA), at a press conference at the Jatiya Press Club in Dhaka.

He added that when VAT, port charges, fuel, transport costs and higher raw material prices are included, the total additional cost could reach Tk 3,560 per tonne, while overall production costs have already increased by nearly Tk 5,000 per tonne.

Industry leaders also called for a review of capacity payments, power contracts and reserve margins, saying lower electricity costs, better energy efficiency and diversified energy sources are essential for sector growth and competitiveness
Alam warned that the price of 60-grade MS (mild steel) rod, the most widely used steel product in construction, is currently Tk 91,000 to Tk 92,000 per tonne at the retail level and could rise to at least Tk 97,000 per tonne.

“The burden will fall directly on the construction and infrastructure sectors. Higher project costs could slow both public and private investment and ultimately weigh on overall economic growth,” he said.

The BSMA said the sector has attracted over Tk 1 lakh crore in investment and employs around 10 lakh people.

It added that Bangladesh has about 40 modern steel mills and over 150 re-rolling mills, with a combined annual production capacity of around 1.22 crore tonnes, while domestic demand is only about 50 lakh tonnes a year, meaning mills are operating at less than half of their installed capacity.

Alam also said steelmakers have made significant investments in their own power infrastructure, including 230kV, 132kV and 33kV substations, allowing them to receive electricity directly and avoid adding to distribution losses.

Referring to a recent public hearing by the Bangladesh Energy Regulatory Commission, he said the Bangladesh Power Development Board admitted that high-voltage consumers like steel mills face almost no system losses and are profitable customers.

Despite this, electricity tariffs have increased by around 60 percent to 70 percent over the past five years.

Alam urged the government to withdraw the latest tariff hike and gradually reduce annual capacity payments of Tk 40,000 to Tk 50,000 crore, warning that further cost increases could threaten the sustainability of the steel industry.

BSMA Secretary General Sumon Chowdhury also called for a review of recent electricity price hikes and a reduction in capacity payment burdens, saying these measures are weakening the competitiveness of local industries.

“Reducing electricity costs is essential for sustaining industrial growth,” he said.

According to Chowdhury, capacity payments to power producers rose from Tk 32,000 crore in the fiscal year (FY) 2023-24 to nearly Tk 42,000 crore in FY2024-25.

He suggested reviewing these costs and renegotiating power contracts to reduce pressure on both industries and consumers.

Chowdhury also proposed revising or cancelling costly power sector agreements, phasing out expired rental and quick-rental power plants, and reducing the country’s reserve generation margin to below 25 percent.

He further called for greater energy diversification, including higher investment in renewable energy and reduced dependence on imported fuels and LNG.

He also urged greater transparency in public spending and stronger engagement between policymakers and business leaders to support industrial growth and protect the economy.

BSMA Vice President Maruf Mohsin said ferroalloy is a key raw material used in steel production and has been manufactured locally for the past 17 years, helping the country save millions of dollars in foreign exchange by reducing import dependence.

He said the production process is highly electricity-intensive, and any further rise in power costs would significantly reduce profitability, putting ferroalloy producers under severe financial pressure and potentially forcing some plants to shut down.

Former BSMA president Manwar Hossain, former vice president Sk Masadul Alam Masud, and BSRM adviser Kazi Anwar Ahmed were also present at the conference.

The Bangladesh Securities and Exchange Commission (BSEC) has withdrawn the floor price - the minimum price limit - imposed earlier on shares of Beximco Limited and Islami Bank Bangladesh PLC, paving the way for a return to normal market-based trading.

The decision was made at a special commission meeting held today (8 June) and subsequently formalised through an official circular.

With effect from tomorrow, both stocks will trade freely without any minimum price restriction, ending a prolonged period of regulated pricing that had limited natural market movement.

BSEC spokesperson Abul Kalam confirmed that the removal of the floor price will come into effect from tomorrow.

He said the last floor price levels stood at Tk110.10 for Beximco Limited while Tk32.60 for Islami Bank Bangladesh PLC.

Both the two stocks had been trading at these fixed levels for an extended period, leading to a virtual stagnation in market activity.

Market participants believe the decision will help restore a more realistic price discovery mechanism in the capital market.

However, they also warned that short-term selling pressure and volatility may increase in these two counters once trading resumes without restrictions.

The move comes after the new commission had already indicated plans to gradually withdraw floor prices as part of broader capital market reforms.

Earlier yesterday (7 June), during a meeting with the Dhaka Stock Exchange (DSE) delegation, the commission signaled its policy direction regarding market liberalisation and structural improvements.

Discussions also covered investor confidence building, deregulation, automation, modernised surveillance systems, simplified IPO approvals, and strengthening the autonomy of stock exchanges.

The floor price mechanism was first introduced on 19 March 2020 during the Covid-19 pandemic, when global markets faced severe volatility.

It was designed to prevent panic selling and sharp declines by setting a minimum allowable price based on the average of the previous five trading days. While it initially helped stabilize the market, prolonged use later created unintended consequences.

In 2022, against the backdrop of mounting global economic uncertainty - fuelled by the Russia-Ukraine war, acute dollar shortages, rising inflationary pressure, and a prolonged domestic market downturn - the regulator reintroduced floor prices across most listed securities.

The move, however, came at a significant cost. A large portion of the market became effectively inactive, as stocks could not trade below their set minimum limits, severely restricting liquidity and hampering the natural process of price discovery.

The regulator had defended the mechanism, arguing it was necessary to prevent excessive price declines, shield retail investors from panic-driven selling, and preserve overall market stability during a period of acute crisis.

Market experts, however, have long pushed back against the measure, contending that it distorted natural price formation and eroded the efficiency of the capital market over time.

Although most listed stocks were gradually freed from the floor price system, Beximco and Islami Bank remained exceptions due to their specific financial and operational challenges.

Market analysts noted that both companies were facing significant stress, including debt concerns and profitability pressure, raising fears of sharp corrections if restrictions were removed abruptly.

Experts now expect that lifting the floor price will lead to increased volatility in the short term, particularly in these two stocks.

However, in the long run, the move is expected to strengthen market-based pricing, improve transparency, and enhance liquidity across the market.

Globally, most developed and emerging markets do not use long-term floor price systems. The United States relies on circuit breakers to temporarily halt trading during extreme volatility.

India and China use daily price bands to limit excessive fluctuations, while Pakistan and Sri Lanka also apply temporary control mechanisms.

However, prolonged price freezing as seen in Bangladesh is rare internationally.

Market analysts view this decision as more than just a technical adjustment for two stocks. It is widely seen as a significant step toward a more liberal, efficient, and internationally aligned capital market structure in Bangladesh, where price discovery can function freely and investor participation can return to normal levels.

As part of broader efforts to support domestic industries and ease the tax burden on consumers, the government may reduce VAT rates, extend tax concessions and adjust import duties across several sectors in the upcoming budget, according to National Board of Revenue (NBR) sources.

Under the proposals, VAT at the production stage for air conditioners and refrigerators may be reduced from 15% to 7.5%, with the concession potentially extended until 2030.

Import duty exemptions may also be granted on raw materials used in the production of 68 types of medicines. In addition, reduced import tax benefits for raw materials used in the emerging semiconductor industry may be extended until 2031.

On the revenue side, VAT on mobile SIM card sales may be shifted from a fixed Tk300 to 15% of the sale price.

The import duty on raw materials used in infant food preparation may be reduced from 15% to 10%, which could lower the price of infant formula in the local market. The government may also withdraw the existing 5% regulatory duty on date imports, potentially easing consumer prices.

VAT at the import stage may be removed on more than 30 raw materials used in pesticide and crop protection chemical manufacturing. The duty on zinc ash, the main raw material for zinc sulphate fertiliser, may also be fully withdrawn.

A senior NBR official involved in budget preparation told TBS that the government is seeking to ease the tax burden on marginal taxpayers while also extending tax, VAT and duty concessions up to 2030, and in some cases up to 2035, to encourage investment and employment.

The official added that livestock, poultry and fish products may be included in the list of goods under a reduced source tax of 0.5%, expanding the coverage beyond the current 27 agricultural and food items. These additional 33 products currently face source taxes ranging from 1% to 5%, and the change could help reduce consumer prices.

Locally manufactured AC, refrigerator prices may decline

In last year's budget, the reduced VAT regime for refrigerator and air-conditioner manufacturing was withdrawn and replaced with a 15% VAT rate.

Industry stakeholders say the sectors had long benefited from tax incentives aimed at reducing import dependence, which helped build local manufacturing capacity.

Although the VAT was doubled to 15% in the FY26 budget as part of a gradual withdrawal of incentives, manufacturers are allowed to claim input tax rebates under the higher rate — a facility not available under the 7.5% regime, making the effective burden lower than the nominal rate.

However, NBR officials said imports of refrigerators and air conditioners have risen compared to domestic sales following the VAT increase. One official said imports grew by more than 10% in a year and could rise further if current conditions persist.

He added that the government is considering extending the incentive for another four years, with an announcement likely in the budget scheduled for 11 June.

If approved, prices of locally manufactured refrigerators and air conditioners may decline.

Gold, mobile phones, healthcare items may get cheaper

Gold and gold jewellery are also among products that may see price reductions.

Currently, a 5% VAT on gold sales translates to about Tk12,500 per bhori. The government may replace this with a specific VAT of Tk2,500 per bhori. Source tax on gold jewellery sales may also be reduced from 5% to 0.5%.

If global gold prices remain stable, retail prices in Bangladesh could fall.

Advance income tax on imports of 22 categories of raw materials used in local mobile phone manufacturing may be reduced from 5% to 2% or 1%, potentially lowering handset prices.

Tax benefits for appliances such as washing machines, dishwashers, geysers, blenders and juicers may be extended, helping stabilise prices. Duties on laptop and computer components may also be reduced.

Healthcare-related imports, including cardiac stents, eye lenses and kidney dialysis equipment, may see lower VAT and taxes, potentially reducing treatment costs.

Other products likely to benefit from tax reductions include float glass, lipstick, locally produced edible oil, solar equipment, electric vehicles, EV charging systems, packaging materials, imported fabrics for domestic use, live fish and animals, and key raw materials for pharmaceuticals and semiconductor industries.

Items that may become more expensive

Some products may see higher taxes.

Prices of tobacco products, including bidis and cigarettes, may increase by around 15%, with cigarette prices possibly rising by Tk1 to Tk3 per stick.

Supplementary duty on nicotine pouches may increase by 40%, while domestically produced alcoholic beverages may face a VAT of Tk500 per litre.

VAT on steel products, including rods, may rise from Tk150 to Tk350.

Import duty on cashew nuts may rise from 5% to 25% to encourage local production.

Bangladesh could face a potential loss of $17.5 billion in exports after graduating from the least developed country category due to the loss of preferential market access in developed economies, Commerce Minister Khandakar Abdul Muktadir told parliament today (8 June).

Replying to a question from Chattogram-11 lawmaker Jasim Uddin Ahmed during the second day of the second session and first budget session of the 13th Jatiya Sangsad, the minister said the government had already launched a series of trade and market diversification initiatives to address the challenges arising from the country's transition to developing nation status.

"Bangladesh will soon graduate from the LDC category. As a result, the country will lose preferential market facilities currently available under various trading schemes offered by developed countries, which may adversely affect exports worth around $17.5 billion," he said.

To mitigate the impact, Bangladesh has already concluded an Economic Partnership Agreement with Japan, while negotiations for a Comprehensive Economic Partnership Agreement with South Korea are underway, the minister said.

He said that the government has also initiated efforts to sign EPA, CEPA or Free Trade Agreements with the European Union, the Regional Comprehensive Economic Partnership, the United Arab Emirates, Singapore, Indonesia, China and other potential export destinations.

The minister attributed the country's widening trade deficit partly to policy failures of the previous government and partly to global economic factors, including the energy crisis, the Russia-Ukraine war, rising commodity prices, dollar shortages and adverse international market conditions.

He said that higher import costs for fuel, food and industrial raw materials, coupled with slower export growth, had contributed significantly to the trade imbalance.

According to data presented in the JS, Bangladesh's trade deficit widened to $24.16 billion in the financial year 2024-25 from $21.50 billion in FY2023-24.

Exports stood at $55.19 billion against imports worth $79.35 billion during the period.

The minister said that despite exporting goods to 202 countries and territories in FY2024-25, the readymade garment sector still accounted for 84 per cent of the country's export earnings.

He said that to reduce dependence on a single sector, the government has undertaken initiatives to extend facilities similar to those enjoyed by the garment industry to other promising export sectors.

Partial exporters in eight sectors, leather and leather goods, jute and jute products, agricultural products, pharmaceuticals, ICT and software services, light engineering products, frozen foods and fish, and plastic products, have already been granted bonded warehouse facilities against bank guarantees, the minister said.

Muktadir said that the government was also supporting entrepreneurs in eight priority sectors through the Business Promotion Council and had formulated the Export Policy 2024-2027 to strengthen Bangladesh's position in global trade through sustainable export growth.

To expand market access and remove trade barriers, Bangladesh is continuing engagement through various bilateral platforms, including trade and investment arrangements with Australia, the United Kingdom, Vietnam, Thailand, Uzbekistan, Belarus and Canada, he said.

The minister said that efforts were also underway to explore new export markets in Latin America, Africa and the Commonwealth of Independent States through trade missions comprising government and private sector representatives.

Other measures include strengthening economic diplomacy through Bangladesh missions abroad, providing foreign currency loans from the Export Development Fund for raw material imports, and creating a Tk5,000 crore low-interest pre-shipment loan fund for export-oriented industries through Bangladesh Bank.

commerce minister said that the government had declared paper and packaging products as the Product of the Year 2026 in a bid to diversify exports, create employment and promote women's economic empowerment, he added.

Replying to a separate question from Bagerhat-4 lawmaker Abdul Alim, the minister outlined Bangladesh's ongoing efforts to strengthen trade ties within South Asia.

He said Bangladesh and Bhutan signed a PTA in December 2020, under which 100 Bangladeshi products and 34 Bhutanese products enjoy duty-free market access.

Negotiations on PTAs with Nepal and Sri Lanka are progressing, while Bangladesh is also preparing for further negotiations with India on a proposed Comprehensive Economic Partnership Agreement.

Muktadir said Bangladesh was prioritising bilateral, regional and multilateral trade agreements with key economic blocs and countries in Asia, Europe, Africa and the Middle East to strengthen export competitiveness and attract investment after LDC graduation.

In response to another question from reserved-seat lawmaker Selina Sultana, the minister said that Bangladesh continued to face trade deficits with several SAARC countries, particularly India.

In the FY2024-25, Bangladesh recorded a trade deficit of $7.86 billion with India, the largest among SAARC member states.

The country also posted trade deficits with Afghanistan, Bhutan and Sri Lanka.

The biggest oil supply shock in decades has entered its fourth month – with no resolution in sight as neither the US nor Iran appears willing to budge - yet the market remains surprisingly calm. This disconnect reflects an uncomfortable reality: the biggest drivers of today’s energy market are a host of unknowns.

The renewed strikes between Iran and Israel over the weekend have sent oil prices up over 4 percent to $98 a barrel on Monday, but Brent ​crude remains well below levels seen only a few weeks ago and comfortably within the range of the past two decades.

This has happened even though the Strait of Hormuz – the world’s most critical oil chokepoint – has remained largely ‌shut for more than three months, disrupting flows equivalent to roughly 13 percent of global supply.

A large part of the market’s sanguine mood reflects expectations that conditions in the Gulf could change overnight. US President Donald Trump’s repeated assertions in recent weeks that a deal with Iran is imminent have helped cool prices.

Yet there is little evidence that Washington and Tehran are moving closer to a durable agreement, with both sides continuing to strike targets across the region.

Even if a formal reopening of Hormuz occurs in the next few weeks – a scenario that is hardly the base case – this would not instantly translate into a full recovery of ​flows. Shipping is governed as much by risk assessments as by geopolitics. Tanker operators, insurers and traders are likely to remain cautious about re-entering the Gulf, fearing vessels could once again become stranded in the event of renewed hostilities.

While there are ​increasing indications that more cargoes have been leaving the Gulf in recent weeks using stealth channels, these are short-term solutions being employed by desperate operators, not a long-term strategy for the world’s largest energy companies.

What’s more, this opacity speaks to the larger problem. Oil traders are mostly operating in the dark, regarding both supply and demand, raising the risk of a nasty surprise if their assumptions prove faulty.

HOW LONG CAN STOCKS GO?

The first major unknown is exactly how ​long global inventories can last. Governments and companies have tapped commercial stocks and strategic reserves at an unprecedented pace since the conflict broke out on February 28.

Global crude and fuel stocks fell at a pace of 5.27 million barrels per day in March, accelerating to 8.62 million ​bpd in April and likely approaching 9 million bpd in May, according to the US Energy Information Administration. Draws could rise further to around 11 million bpd in June as seasonal demand increases ahead of the Northern Hemisphere summer.

These are extraordinary numbers – equivalent to running down Saudi Arabia’s pre-war production every single day.

The United States offers a stark illustration. Total US crude inventories, including the Strategic Petroleum Reserve, have fallen by roughly 10 percent this year to 1.5 billion barrels – the lowest since 2004.

At Cushing, Oklahoma – the delivery point for West Texas Intermediate futures – stocks have dropped to 22.4 million barrels, the lowest since January. If ​draws continue at the recent average pace, inventories could soon fall below 20 million barrels, a level widely seen as the minimum operational threshold needed to keep the hub functioning smoothly.

The market has proven remarkably adaptable in recent months and could continue to find workarounds, ​but storage systems are not infinitely flexible. Once those “tank bottoms” are approached, prices would typically be expected to shoot up to reflect scarcity.

THE CHINESE ENIGMA

Another key unknown is China.

The world’s second-largest oil consumer has sharply reduced its seaborne crude imports in response to higher prices, with imports falling in ‌May to 6.36 million bpd, the lowest level in nearly a decade.

That decline has provided significant relief to other importers by easing competition for scarce cargoes. But it has also introduced a new layer of uncertainty.

First, China could decide to go back into the market at any moment.

China does not publish timely or comprehensive consumption data, leaving the market largely in the dark about how much demand has actually been affected.

Chinese refiners may have drawn on commercial inventories to offset lower imports, or Beijing may have begun to tap its vast – but opaque – strategic reserves.

If the latter is true, global supply could be tightening more than traders currently estimate. If not, the drop in imports may signal a sharper-than-expected slowdown in demand.

Either way, this lack of clarity regarding a fundamental driver of the global supply-demand balance at such a precarious moment ​is troubling – and could leave some suddenly finding themselves on the ​wrong side of a trade.

THE INVISIBLE BALANCING FORCE

The difficulty of gauging China points to a broader problem: demand is inherently harder to measure than supply.

While the industry has developed increasingly sophisticated tools to track crude production, refining activity and tanker movements – often in near real time – consumption remains fragmented across billions of users and is often only reported with significant delays. In some cases, such as China, it is not reported at all.

As a result, estimating the level ​of demand destruction caused by the current supply shock has become an exercise in inference. In theory, the mechanism is straightforward: tightening supply depletes inventories, higher prices follow, and demand is gradually destroyed. ​In practice, that process is messy, uneven and difficult to observe in real time.

The International Energy Agency last month revised its global demand outlook dramatically, forecasting it to contract by 420,000 bpd in 2026, compared with a pre-war expectation of 1.3 million bpd in growth. Consumption is expected to fall by 2.45 million bpd in the second quarter alone.

Some analysts and trading houses are more bearish, estimating that demand could have declined by as much as 5 million bpd in May.

Whichever figure is correct, the longer the Hormuz disruption persists, the greater the drag on economic activity and fuel demand.

The oil market today appears remarkably relaxed in ​the face of a prolonged and unprecedented disruption.

Part of that may be fatigue after months of volatility, but it also may reflect how little anyone currently ​knows about the true state of the oil market – including the experts – and how much pricing is based on sentiment and expectations.

That is a precarious foundation.

Bangladesh Bank (BB) on Sunday launched a Tk 30 billion (Tk 3,000 crore) export diversification refinance scheme aimed at strengthening production capacity and expanding the country’s export base beyond the ready-made garments (RMG) sector.

The Sustainable Finance Department of the central bank issued a circular in this regard, saying the scheme has been introduced to address product and market concentration risks arising from Bangladesh’s heavy dependence on RMG exports and to support the development of high-potential export sectors.

According to the circular, the refinance fund will be formed from the excess liquidity of scheduled banks and will operate as a revolving fund.

Bangladesh Bank will provide refinancing to participating financial institutions (PFIs) at an interest rate of 4 percent, while exporters will receive financing at a maximum rate of 7 percent.

The tenure of the facility has been fixed at three years, including a grace period of up to six months, with interest calculated under the reducing balance method.

The central bank said the scheme is designed to enhance export competitiveness, increase foreign exchange earnings, improve the country’s trade balance and create employment opportunities through the expansion of non-traditional export sectors.

Financing under the scheme will be available to industries identified as “Highest Priority” and “Special Development” sectors under the Export Policy 2024-27.

Preference will be given to exporters using locally sourced raw materials, while sectors such as jute and leather have been highlighted as key areas for export diversification.

The circular stipulates that exporters classified as loan defaulters in Credit Information Bureau (CIB) reports, businesses with overdue export proceeds and entities with a history of loan write-offs will not be eligible for financing under the scheme.

Banks and financial institutions willing to participate must sign a Participation Agreement with Bangladesh Bank’s Sustainable Finance Department.

Islamic banks will also be eligible to provide financing through Shariah-compliant investment modes, subject to compliance with the scheme’s pricing and tenure requirements.

To obtain refinancing, PFIs will have to submit applications for each disbursement within 90 days along with required documents, including demand promissory notes, letters of continuity, debit authority letters and updated CIB reports.

A minimum debt-equity ratio of 70:30 will be maintained for all investments financed under the facility.

The central bank has also introduced strict monitoring and accountability measures. PFIs will be required to submit quarterly reports within 15 days of the end of each quarter, while Bangladesh Bank will conduct regular inspections to ensure proper utilization of funds.

Under the penalty provisions, PFIs found providing false information or allowing misuse of funds will be charged a five percent penalty interest in addition to the normal refinance rate.

The amount will be recovered directly from the institution’s current account maintained with Bangladesh Bank.

The circular further states that if a borrower becomes classified as a defaulter, the concerned PFI must immediately inform the central bank.

In such cases, Bangladesh Bank may recover the entire outstanding refinance amount from the institution’s current account through a one-time deduction.

The scheme has been introduced under the powers conferred by Section 45 of the Bank Company Act, 1991, as amended in 2023, and has come into effect immediately.

Oil ​prices fell on Friday as traders gained confidence that renewed conflict between the US and Iran ‌was growing less likely.

Brent crude futures settled at $93.09 a barrel, down $1.94 or 2.04 percent. The previous session, Brent settled 2.84 percent lower.

US West Texas Intermediate crude finished at $90.54 a barrel, down $2.50, or 2.69 percent, following a 3.1 percent loss on Thursday.

“The market is not seeing ​escalation between the parties,” said Phil Flynn, senior analyst at Price Futures Group. “Even though we don’t ​have a deal, it seems the market is seeing a de-escalation.”

Petroleum Development Oman said operations at Mina al Fahal port were unaffected after three sources told Reuters that oil loading had been ​suspended following an explosion near its mooring berths. Oman exports 800,000 to 900,000 barrels per day of crude from the ​terminal.

Both contracts still looked set to post their first weekly gains in three weeks, with Brent up 1.18 percent and WTI around 3.64 percent.

The contracts rose earlier in the week after fighting flared in the Middle East as US-Iran war peace talks dragged ​on while traffic in the Strait of Hormuz, where a fifth of the world’s oil passes, remained limited.

“As ​hopes for an agreement between the US and Iran were dashed once again, the price of Brent crude and European ‌natural gas rose slightly this week,” Commerzbank analysts said on Friday.

However, Brent’s gains have been capped by oil inventories lasting longer than expected, rerouted exports and falling demand, Commerzbank added.

Hezbollah leader Naim Qassem rejected on Thursday a US-brokered agreement between Israel and the Lebanese government to halt the fighting. Iran has made a ceasefire in Lebanon a ​condition for any peace deal ​with Washington.US President Donald ⁠Trump said on Thursday he believed progress was being made between Israel and Lebanon and that Lebanon deserved to have peace.

“Any optimism remains heavily clouded by a ​tangled web of headlines and counter-headlines,” IG market analyst Tony Sycamore said in ​a note.

Opec is ⁠sticking to its oil demand growth forecast of 1.2 million bpd for this year, Secretary General Haitham Al Ghais said on Thursday, despite the Middle East conflict and closure of the Strait of Hormuz.

Iranian oil exports have fallen to their ⁠lowest level ​in six years mainly due to the US naval blockade, according ​to shipping data, although weak demand in China has depressed prices for the oil.

Bitcoin dropped below $60,000 on Friday, its lowest level since October 2024, just before Donald Trump’s election, which propelled it to a record high.

The currency fell by about 6 percent around 1615 GMT, to $59.7709, before paring its losses slightly.

The election of Trump, a staunch advocate of cryptocurrencies, to the White House for a second term in November 2024 sparked a wave of enthusiasm in the sector, sending the price of bitcoin soaring to nearly $110,000.

The current dip has been caused by factors including one corporate selloff, according to Emma Bernuau, a consultant at Eurosagency.

A surprise sale by Strategy -- one of bitcoin’s most prominent corporate holders -- rattled confidence. The firm revealed it had sold 32 BTC from its reserves, the first such disposal in several years.

“Although the amount was minimal, the symbolic significance is considerable,” Bernuau said.

“The market had generally considered that Strategy had no intention of selling its bitcoin and would continue accumulating regardless of market conditions.”

Bernuau said long-term investors could view the dip as a buying opportunity, and flagged several potential tailwinds including progress on US legislation to support the sector.

The benchmark index of the Dhaka Stock Exchange (DSE) rose sharply in early trading today (7 June), following the appointment of the new chairman of the Bangladesh Securities and Exchange Commission (BSEC), who assumed office on Thursday.

During the opening session up to 10:10am, the DSEX gained 73 points to reach 5,548, its highest level in the past three months.

The blue-chip DS30 index also posted strong gains, rising 29 points to 2,097.

Of the traded securities, 298 advanced, while 34 declined and 34 remained unchanged.

Turnover during the session stood at Tk213 crore.

Market insiders attributed the rally to renewed investor confidence following the appointment of the new BSEC chairman.

They expressed optimism that the newly appointed chairman, Masud Khan, would play an important role in restoring stability and confidence in the capital market.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) will hold an emergency board meeting today to review the persistent decline in garment exports.

The meeting, to be held at the BGMEA office in Uttara, Dhaka, will primarily focus on the export downturn, BGMEA Director Faisal Samad said. It will also discuss the recent closure of several garment factories and the factors behind them.

The association will also engage with the government to address the challenges facing the garment sector and stem the decline in exports, he said.

Garment exports have been falling for nearly a year, Samad said, driven not only by tariff-related issues but also by geopolitical tensions, longer lead times and challenges associated with the country’s graduation from least-developed country (LDC) status.

In the July-May period of fiscal year 2025-26, garment exports totalled $35.31 billion, marking a 3.41 percent decline from $36.56 billion in the corresponding period of fiscal year 2024-25, according to data from the Export Promotion Bureau.

The meeting is also likely to discuss the US tariff issue, BGMEA President Mahmud Hasan Khan said, as it has created uncertainty among businesses.

A fund will also be created for members so that it can be used in emergencies, he said.

A major European clothing retailer operating in Bangladesh said, requesting anonymity, that the outlook for garment exports may not improve significantly in the next season due to continued volatility in the global market.

The longer lead time is a major problem in Bangladesh, he said. Shipments from Bangladesh take 30 to 40 days to reach Europe, and in some cases even longer. Longer lead times also increase operational costs, making it difficult for manufacturers to remain profitable on thin margins.

Bangladesh should sign a free trade agreement with the European Union or negotiate to secure GSP+ status, as preferential market access to the EU will end following the country’s LDC graduation, he suggested.

OpenAI is planning its biggest ChatGPT overhaul yet, aiming to turn it into a "superapp" with coding tools and AI agents to boost revenue ahead of a potential stock market listing, the Financial Times reported on Sunday.

The changes are part of a broader reorganisation at OpenAI, as it shifts resources to target lucrative enterprise clients and intensify competition with rival Anthropic, the report said, citing more than a dozen current and former employees.

Reuters could not immediately verify the report. OpenAI did not immediately respond to Reuters' request for comment.

The overhaul will give greater prominence and resources to OpenAI's coding product Codex and is set to roll out in the coming weeks, initially appearing as updates to ChatGPT's website and mobile apps, the FT said.

To drive uptake, OpenAI is redesigning ChatGPT's interface with new prompts and features steering users towards coding tools, image generation and partner services such as Canva and Booking.com, the report added.

Most Codex users are paying customers, while 2 million businesses account for about 40% of OpenAI's revenue, FT said, adding that the company expects that share to rise to 50% by year-end.

ChatGPT serves more than 900 million weekly active users, OpenAI said earlier this year, adding that it had surpassed 50 million consumer subscribers.

Reuters reported in May that OpenAI was preparing a confidential US IPO filing in the coming weeks. However, CEO Sam Altman has said the company is not focused on timing and will go public when it makes sense.

Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan said the regulator would take an aggressive approach to attract quality companies to the stock market, arguing that such a move is necessary to build a more stable and mature capital market.

Speaking at the 10th anniversary event of CFA Society Bangladesh at Sheraton Dhaka on Saturday, Khan said the market currently suffers from a shortage of quality stocks, while a significant share of trading remains concentrated in weak and speculative shares.

“We have to bring very good scripts into the market, very quickly,” he said, stressing that investors need access to more fundamentally sound companies.

The BSEC is exploring various incentives to encourage strong companies to go public. While tax incentives remain an option that would require discussions with the National Board of Revenue (NBR), he suggested several administrative measures that could make listing more attractive.

Among the proposals, Khan floated the idea of creating a separate tax administration framework for listed companies, arguing that compliant listed firms should face fewer regulatory burdens than unlisted entities.

Khan also highlighted the long-term benefits of listing, saying publicly traded companies tend to become stronger institutions through improved governance, professional management and succession planning.

He further revealed plans to promote direct listings, particularly for multinational corporations, well-governed banks, state-owned enterprises and reputable local companies.

According to him, direct listings could quickly increase the supply of quality shares in the market without requiring companies to raise fresh capital.

Noting that Bangladesh remains heavily reliant on retail investors, Khan emphasised the need to strengthen institutional participation in the stock market. He said deeper involvement by pension, provident and gratuity funds would help the market progress from frontier-market status towards emerging-market standards.

The chairman argued that stronger institutional investment, alongside the listing of quality companies, is essential for creating a more stable and mature capital market.

He also called for major regulatory simplification and digitisation, saying the existing regulations governing IPOs, margin loans and mutual funds have become unnecessarily complex. Applications for IPOs and rights issues should be fully automated, he said, adding that regulators should “regulate where necessary and simplify where possible.”

Asif Khan, president of the society, and M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, also spoke at the event.

Formal credit growth in the private sector remains almost static, reaching 4.75 per cent in April, signalling a deep slowdown in the country's business activities.

The low trend in credit demand from private enterprises is attributed to banks becoming more cautious amid rising non-performing loans (NPLs) and private borrowers losing their credit appetite due to multiple anti-business factors, including the energy crisis, higher lending costs, and external shocks stemming from the Middle East crisis.

The Bangladesh Bank's (BB) private sector credit growth data, available since 2003, shows April growth was the second-lowest after the previous month's count of 4.72 per cent.

According to the BB, outstanding loans taken by private sector entrepreneurs reached Tk 18.03 trillion by the end of April, up 4.75 per cent from Tk 17.22 trillion a year earlier.

In fact, private credit growth has hovered around single digits since August 2024, reflecting prolonged sluggishness in the $460 billion economy that is largely private-sector-led.

Seeking anonymity, a central bank official says the banking regulator continues its contractionary monetary policy stance, keeping the policy rate at 10 per cent as part of its inflation control measures despite criticisms from business circles.

"The higher lending rate, energy crisis, and external shocks stemming from the Middle East crisis are major reasons behind the plummeting credit demand," he says.

He mentions the half-yearly monetary policy statement (MPS) projection for private credit growth up to June next year is 8.50 per cent, but the current growth remains below that.

However, growth could pick up in the last quarter of FY26, he adds.

President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem says entrepreneurs are struggling to survive in the market under the extreme business and investment climate that prevails.

He cites multiple factors like the prolonged energy crisis, higher borrowing costs, and anti-business taxation policy, saying these are making it difficult for businesspeople to survive.

"Under such circumstances, who dares to think of business expansion? I do not know how the growth (4.75 per cent) has happened and who the borrowers are. Will they be able to repay the loans? I have enough doubts," he adds.

India has hiked domestic cooking gas price by Rs 29 per cylinder, in the second increase in three months as state-owned fuel retailers continue to grapple with elevated global energy costs due to West Asia conflict.

The price of a 14.2-kg domestic cooking gas cylinder in Delhi will rise to Rs 942 from Rs 913 with effect from 7 June, Indian media reported today citing industry sources.

The latest increase follows a Rs 60-per-cylinder hike on 7 March after the conflict in West Asia disrupted global energy supplies and drove up international fuel prices.

Industry sources said the increase had only partly offset losses incurred on domestic LPG sales.

Petrol and diesel prices have been raised by a cumulative Rs 7.50 per litre since mid-May while compressed natural gas (CNG) rates were increased by around Rs 6 per kg.

Meanwhile, the Petroleum And Natural Gas Ministry said in a statement today recipients of subsidized cooking gas under a special scheme for women will receive Rs 300 a cylinder on the first four refills each year.

The effective cooking gas price under the subsidized scheme for women for the first four cylinders at Rs 642 is at a discount of about 60% to the actual international price of an LPG cylinder, it said.

The statement said cooking gas cylinders in India are cheaper than in any neighbouring country and far below the price in advanced economies such as the United States, Australia and Canada.

The cost of supplying a cylinder has risen to over Rs 1,600, an under-recovery of about Rs 700 on each domestic cylinder.

The prices of petroleum products in India are linked to the corresponding prices in the international market.

What the household does not bear the brunt of is the several hundred rupees a cylinder which the government is bearing.

As the West Asia conflict tightened the Strait of Hormuz, through which roughly a fifth of the world's oil and a large share of India's energy imports pass, most commercial traffic in the waterway was brought to a near halt.

About 54 per cent of India's LPG consumption was routed through the Strait, leaving the cooking-gas supply directly exposed to the disruption.

However, India was among the few that kept its energy cargoes moving. In fact, India brought out the largest number of energy-carrying without paying any toll.

Besides, sourcing was widened to suppliers across the world, including those that do not route through the Hormuz Strait, like the United States, Canada and Algeria and available LPG was directed to households and to priority users such as hospitals and educational institutions.

The ministry said measures were taken to secure supply through the disruption. On the supply side, domestic LPG production was raised by more than 60 per cent to offset the constrained imports.

With an upscale new budget coming in few days now, the government targets borrowing 8.0-percent higher from the banking sector and 20-percent bigger from savings schemes to finance deficit amid unpromising revenue-earning prospects, officials say.

According to Finance Division sources, in the next fiscal year, the government plans to borrow some Tk 1.12 trillion from banks compared to current year's budgetary target of Tk 1.04 trillion.

Data show that until May 10, the government had actually borrowed Tk 1.95 trillion from the banking sector to meet its needs.

Also, the government is targeting to borrow some Tk 150 billion from the national savings schemes to help finance the Tk 9.38-trillion largest-ever fiscal budget in Bangladesh.

In the outgoing fiscal year, the government had targeted borrowing Tk 125 billion from national savings schemes. However, due to selling pressure from the buyers, the government's net selling of savings instruments fell into negative territory by Tk 5.55 billion until February last.

Officials say that as the government is making a large-size budget without confirming adequate sources of earnings, it will have no option but to raise dependence on the banking sector to meet its financial needs.

In the next year's budget, the government is setting a target of collecting Tk 6.95 trillion as revenues, compared to its highest revenue collection in the recent past amounting to Tk 4.09 trillion.

The finance officials say the National Board of Revenue (NBR) alone is going to be given a target to collect Tk 6.04 trillion, higher by Tk 2.43 trillion than its previous records in revenue mobilisation.

So, they say, as revenue collection will fall short of its target and foreign fund flow is not promising in the coming year, government's net bank borrowings will mount in the next fiscal year, surpassing the target.

Dr Zahid Hussain, a former lead economist at the World Bank's Dhaka office, says it seems that "debt trap is now a matter of time" as the government is increasingly depending on loans instead of enhancing revenue earnings.

"The money the government is borrowing from the banks is being used for meeting its operational needs instead of using them in productive sectors," the economist notes.

Thus, he adds, the government's debt burden is increasing day by day.

Because, he says, the government will have to return the money with interest.

Mr Hussain also makes a point that high government borrowing from banking sector lessens fund flow for private-sector investment, thus lowering employment growth that ultimately impacts overall economic growth in the country.

OPEC+ is set to agree on Sunday a fourth increase in oil output targets in as many months, three OPEC+ sources said, even though the US war with Iran is still preventing several of the group's members from pumping more.

The war has cut oil flows via the Strait of Hormuz, creating the world's biggest ever supply crisis as key OPEC+ members including Saudi Arabia have been unable to supply customers in full since the end of February. The crisis for OPEC+ deepened when the United Arab Emirates left the Organization of the Petroleum Exporting Countries after almost 60 years.

Seven core members of OPEC+, which groups OPEC and allied producers including Russia, have increased their output quotas from April to June by almost 600,000 barrels per day.

In reality, the group's production has collapsed due to export cuts by Gulf members, averaging 33.19 million bpd in April versus 42.77 million in February, according to OPEC figures.

On Sunday, the seven members will likely increase targets by about 188,000 bpd from July, the sources said. This is the same as the June hike, which was adjusted down from monthly increases of 206,000 bpd in May and April to take into account the UAE exit.

All the sources spoke on condition of anonymity and said a final decision had not been made.

The seven of 21 OPEC+ members due to meet on Sunday are Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman.

A full OPEC+ ministerial meeting is also scheduled for Sunday but is not expected to make any policy changes, the sources said.

The National Board of Revenue (NBR) is considering reducing the source tax on a range of non-core supply items – including packaging materials, office stationery, and administrative and marketing-related goods used in local industry and service sectors – from 5% to 4%. The advance income tax (AIT) levied at the import stage may also be trimmed by one percentage point.

A senior NBR official, speaking on condition of anonymity, said the proposal has been shaped by business demands and is expected to feature in the upcoming budget. "This may reduce costs for businesses and, ultimately, help protect consumers from rising prices of goods and services."

The move follows remarks by NBR Chairman Abdur Rahman Khan in March, when he signalled that source tax rates across sectors would be rationalised and aligned with firm and industry profitability to minimise refund complications.

Under the current framework, excess source tax deducted at the supply stage can be offset against future profits. In practice, however, many firms either fail to claim such adjustments or avoid doing so because of procedural complexity. The result: companies frequently pass on the burden through higher prices, while others underreport income to ease compliance pressure.

Business leaders and tax experts have broadly welcomed the proposal.

Debabrata Roy Chowdhury, Director of Nestlé Bangladesh, called it a positive development. "We deduct tax from our suppliers and deposit it. But at the current rate, suppliers need to earn more than 20% profit to absorb it, which is not realistic. They cannot adjust it, so they pass it on through higher prices," he told TBS.

Another entrepreneur noted that while compliant firms properly deduct and remit taxes, a significant portion of the market underreports income to sidestep the burden – a trend the higher rate has helped entrench. Chowdhury added that at the 5% rate, a substantial sum is withheld annually at the supply stage, squeezing cash flows across the chain.

Tax experts are calling for further refinement, suggesting that source tax rates be calibrated against corporate profitability based on financial statement analysis. They note that the rollout of the Document Verification System (DVS) has improved transparency, making such fine-tuning more feasible.

Snehasish Barua, managing director of SMAC Advisory Limited, backed the proposal, describing the cut as beneficial for both businesses and consumers. "Lowering the upfront tax on imports and supplies from 5% to 4% directly solves a major corporate headache: trapped cash flow," he said, adding that easing upfront tax pressure would improve liquidity, reduce transactional friction, and strengthen compliance.

On the question of fiscal impact, Barua acknowledged a likely short-term dip in revenue but argued that improved efficiency and stronger compliance would offset it over time. "With inflation squeezing everyday budgets, this policy acts as a shield against rising prices," he said.

Source tax collections currently account for more than 60% of the government's income tax revenue, though a detailed breakdown between local supply deductions and import-stage AIT is not publicly available.

According to NBR's 2022-23 financial statement, Tk15,728 crore was collected at the local supply stage and Tk11,866 crore at the import stage – a combined figure that experts say is substantially tied to the prevailing 5% rate.