The Bangladesh-German Chamber of Commerce and Industry (BGCCI) yesterday (5 July) hosted a seminar on the FY27 national budget, with business leaders, policymakers and tax officials calling for stable and predictable fiscal policies to boost investment and private sector growth.

The seminar, titled "National Budget 2026–27: Impact on Business, Trade, and Investment", was held at The Westin Dhaka, where participants discussed the budget's key tax measures, customs reforms and their implications for businesses and investors.

Speaking as the chief guest, Anja Kersten, Chargé d'Affaires a.i. of the German Embassy in Bangladesh, emphasised the importance of maintaining a transparent, predictable and business-friendly fiscal environment to support sustainable economic growth and deepen trade and investment ties between Bangladesh and Germany.

Senior officials from the National Board of Revenue (NBR), including First Secretary (Customs: Policy and ICT) Md Tariq Hassan, First Secretary (VAT Policy) Md Mashiur Rahman and Deputy Commissioner of Taxes Nusrat Farzana, attended the event as special guests.

Snehasish Barua, partner at Snehasish Mahmud and Co, presented the keynote paper, outlining the major fiscal measures proposed in the FY27 budget, including changes to tax, customs and VAT policies, and assessing their potential impact on business, trade and investment.

Moderating the session, BGCCI Senior Vice President Md Farooque Khan highlighted the importance of sustained engagement between the government and the private sector to foster a competitive business environment and support long-term economic growth.

BGCCI President Md Rokonuzzaman said the chamber would continue facilitating dialogue between policymakers and businesses while promoting bilateral trade and investment between Bangladesh and Germany.

The seminar also featured an interactive discussion, with participants exchanging views on taxation, customs procedures, VAT issues and other investment-related concerns with NBR officials and the keynote speaker.

The programme concluded with a vote of thanks from BGCCI Director and event chairman Md Jahangir Alam Sharker, who reiterated the chamber's commitment to strengthening public-private dialogue and supporting sustainable economic development.

The government is working to fully digitalise Bangladesh as quickly as possible to improve access to banking and financial services, enhance transparency and reduce the time and costs involved in receiving public services, Finance Minister Amir Khosru Mahmud Chowdhury said today (6 July).

Speaking as the chief guest at the "Innovation Showcasing 2025-26" programme organised by the Financial Institutions Division, the minister said every citizen - including businesses, farmers and workers - must be brought into the country's digital transformation so that the benefits of technology reach all segments of society, reads a press release.

He said the primary objective of digital technology is to simplify service delivery while ensuring greater transparency and accountability.

Referring to the FY27 national budget, Khosru said the government had sought to make development more inclusive by incorporating people from all walks of life, including artisans, artists and singers, adding that technology would play a key role in achieving that objective.

He also said the government has undertaken a broader initiative to increase citizens' participation in political, social and economic activities through the wider use of digital technology.

Highlighting international best practices, the finance minister said a high-level government delegation is currently visiting Estonia to study the country's digital governance and technological advancement.

The delegation includes the ICT adviser, Bangladesh Bank Governor Mostaqur Rahman and other senior government officials, reports UNB.

Khosru urged policymakers and financial institutions not to delay adopting proven international practices that could strengthen Bangladesh's financial sector.

Addressing officials of banks and financial institutions, he said the innovations showcased at the event were encouraging but stressed that continuous improvement would be necessary to achieve the country's digital transformation goals.

He called on banks and insurance companies to assess how many of their customers currently use digital services and take measures to expand that coverage.

The minister also urged branch officials to encourage customers to adopt online services instead of relying on conventional banking methods. Financial institutions should actively inform customers about available digital services through effective communication, he added.

He further emphasised expanding digital services across banks, insurance companies and capital market institutions so that people can access financial services easily from home or while travelling.

Reducing unnecessary travel, costs and harassment for citizens would save time and ultimately improve national productivity, he said.

According to information presented at the event, 329 public services provided by 25 offices and agencies under the Financial Institutions Division have so far been digitalised.

Bangladesh is exploring the possibility of issuing China's proposed Panda Bond as an international sovereign bond to establish its presence and begin marketing itself in the global capital market.

The government is forming an inter-ministerial committee to assess the feasibility of issuing the bond and prepare recommendations.

Alongside the conventional US dollar-denominated Eurobond, the committee will review the risks associated with issuing Panda Bonds in Chinese currency, as well as examine the bond's structure, timing and size before making recommendations to the finance ministry.

The previous Awami League government had also considered issuing sovereign bonds. However, it ultimately backed away after taking into account the financial crises experienced by sovereign bond issuers such as Argentina and Sri Lanka. Former Bangladesh Bank governor Dr Ahsan H Mansur has advised that, whether the government opts for a Panda Bond or a Eurobond, any sovereign bond issuance should be undertaken with extreme caution.

Officials at the finance ministry said the issue of issuing a Panda Bond as an international sovereign bond was discussed at a recent meeting on exploring alternative sources of financing, chaired by Finance Minister Amir Khosru Mahmud Chowdhury at the Prime Minister's Office. Following the meeting, the Finance Division prepared a summary seeking the finance minister's approval to form an inter-ministerial committee to examine the proposal.

The committee is expected to include officials from the Finance Division, the Economic Relations Division (ERD), the Bangladesh Bank, the Prime Minister's Office, the Financial Institutions Division, and the Bangladesh Securities and Exchange Commission.

According to the minutes of the meeting held on 20 June, Bangladesh Bank Governor Mostaqur Rahman supported the idea of issuing Panda Bonds in Chinese currency, saying, "Alongside the conventional US dollar-based Eurobond, the possibility of issuing Panda Bonds denominated in Chinese renminbi (RMB) can be explored.

"The first issuance should be relatively small – equivalent to around $50 million – to test market response and keep risks at a manageable level."

Before Prime Minister Tarique Rahman's visit to China, a delegation from the Export-Import Bank of China (Exim Bank) visited Dhaka to discuss the introduction of Panda Bonds in Bangladesh. During the Prime Minister's visit, the Chinese government also included the Panda Bond proposal on the agenda, according to sources.

At the meeting, ERD Secretary Md Shahriar Kader Siddiky said several countries, including Pakistan and Sri Lanka, had issued sovereign bonds. He noted that Bangladesh should consider establishing its footprint in the international capital market.

However, the ERD secretary cautioned that issuing sovereign bonds could raise concerns from the International Monetary Fund (IMF). He added that China would be willing to assist Bangladesh if it decided to proceed with a Panda Bond.

The finance minister said in the meeting that Bangladesh's entry into the international capital market should be viewed positively. He noted that an initiative is underway to establish a Bangladesh Investment Fund for equity investment by the private sector. Once the Hong Kong-based fund is established, it will create opportunities for equity investment in both private enterprises and state-owned companies.

The finance minister also said that alongside the proposed equity fund, the government could continue exploring the possibility of issuing sovereign bonds. He instructed officials to begin internal discussions and institutional preparations.

The meeting also discussed incorporating the possibility of issuing Eurobonds or other international sovereign bonds into the upcoming Medium-Term Debt Strategy, Annual Borrowing Plan and Debt Sustainability Analysis (DSA). Participants agreed that signalling such plans to the market and investors in advance would be appropriate.

Finance Secretary Dr Khairuzzaman Mozumder said the Finance Division had previously been reluctant to pursue sovereign bond issuance because of the associated risks. However, he said the current situation warranted a fresh assessment.

In his view, Bangladesh should improve its sovereign credit rating before making any final decision so that bonds can be issued at favourable interest rates in the international market.

"As this would be Bangladesh's first international sovereign bond issuance, it is necessary to carefully examine the associated risks as well as the bond's structure, timing, currency and denomination before proceeding," the finance secretary added.

Former Bangladesh Bank governor Dr Ahsan H Mansur told TBS that the government had also considered issuing sovereign bonds in 2014-15, when Bangladesh's economic situation and international image were stronger than they are today. However, after observing the debt crises faced by Sri Lanka and Argentina following their sovereign bond issuances, the government abandoned the plan.

He said the biggest risk associated with such borrowing is ensuring the proper management of large amounts of money raised abroad under a sovereign guarantee. It is essential to determine where the funds will be spent and to ensure effective oversight of their use.

"Many countries avoid borrowing from the international capital market because such loans carry commercially determined interest rates. For US dollar-denominated borrowing, the interest rate is generally the US Treasury bill rate plus around 3%. The rate Bangladesh would receive will depend on its international sovereign credit rating," Ahsan H Mansur added.

After years of cautious enforcement in dealing with weak and non-performing listed companies, the Dhaka Stock Exchange (DSE) is now pushing for a comprehensive overhaul of its delisting framework, aiming to clean up a capital market increasingly burdened by "junk" stocks and strengthen investor protection.

The move comes as nearly one-third of listed securities have now been pushed into the Z category, reflecting widespread compliance failures and long-standing operational weaknesses among several firms. Against this backdrop, the bourse has submitted a set of reform proposals to the stock market regulator to make the delisting process more structured, transparent, and enforceable.

At present, stock exchanges have the authority to delist companies that fail to comply with listing regulations. However, market stakeholders say the absence of a clear procedural framework particularly regarding rehabilitation, investor safeguards, and enforcement steps has made action difficult.

As a result, delisting has remained largely inactive despite repeated violations by many listed companies.

Rehabilitation-first approach before delisting

Under the proposed framework, the DSE has suggested introducing a rehabilitation phase before any compulsory delisting. In this stage, struggling companies would be required to submit a detailed operational recovery plan outlining how they intend to restore financial stability and regulatory compliance.

The exchange would monitor the execution of these plans over a specified period. Only if a company fails to implement its recovery roadmap, or if the plan is deemed unfeasible, would compulsory delisting be initiated.

The proposals also identify clear triggers for delisting, including prolonged business closure, failure to declare dividends for extended periods, and repeated non-compliance such as not holding annual general meetings.

Tougher accountability measures for sponsors

Beyond procedural reforms, the DSE has also proposed stricter accountability mechanisms for company sponsors and directors. One of the key recommendations includes conducting special audits to determine the true financial condition of distressed firms and identify individuals responsible for financial irregularities.

If sponsors or directors are found guilty of mismanagement or fund diversion, the exchange has proposed barring them from serving as directors in any other listed company and restricting their access to bank loans.

In more stringent cases, the DSE has suggested provisions to attach or seize personal assets of responsible directors if company funds are found to have been siphoned off mirroring existing legal provisions used in bank loan recovery cases.

Chairman explains rationale for reform

DSE Chairman Mominul Islam said the proposed changes aim to address long-standing gaps in the existing regulatory framework.

"We have proposed amendments to address issues that are not clearly defined in the current delisting rules," he said. "Although the rules allow delisting, they do not clearly outline the process or ensure adequate protection for investors. That is why we have placed these proposals before the regulator."

He emphasised that the reforms are not intended for immediate implementation.

"This is essentially an upgrade of the system. It will not be enforced right away. Once the market becomes more vibrant and new listings increase, we will proceed with delisting in a structured manner," Mominul Islam added.

The chairman also stressed a preference for negotiated exits over forced delistings.

According to him, mutual delisting where sponsors voluntarily buy back shares would be prioritised to avoid market disruption.

"We are prioritising mutual delisting over compulsory delisting. The idea is to ensure a win-win outcome for both sponsors and investors," he said.

He added that delisting decisions would only be taken once a company is deemed genuinely non-viable after rehabilitation efforts are exhausted.

Z-category stocks surge after stricter rules

According to DSE data, out of 360 listed securities excluding mutual funds and corporate bonds, 196 are in the A category, 75 in the B category, and 125 in the Z category.

The sharp rise in Z-category stocks followed a regulatory directive issued in May 2024, which introduced stricter classification criteria for issuer companies.

Before the directive, the number of Z-category stocks stood at around 30, but increased sharply as companies were downgraded for failing to meet compliance requirements.

Market observers say the proposed reforms, if implemented effectively, could mark a significant shift in Bangladesh's capital market discipline potentially removing long-standing weak assets while improving transparency and investor confidence.

Much of the discussion surrounding Bangladesh's FY2026–27 energy budget has centred on a single headline figure: the reduction in overall budgetary allocation to the power and energy sector.

Yet an exclusive focus on the size of the allocation risks overlooking a far more important question: whether the budget provides a credible roadmap for addressing the structural challenges that have long constrained the country's energy sector.

The significance of this year's budget lies less in the scale of its allocation than in the direction of its policy priorities. The budget signals a gradual yet important transition from an import-dependent, subsidy-intensive and increasingly costly energy model towards a more diversified, secure and financially sustainable energy system. Viewed through this lens, the FY27 budget represents a strategic realignment of Bangladesh's energy policy.

More importantly, the budget reflects a growing recognition that energy policy is no longer merely about keeping the lights on; it is fundamentally linked to industrial competitiveness, export performance, investment attraction, employment generation and macroeconomic stability.

For an economy aspiring to accelerate industrialisation, strengthen its position in global value chains and sustain higher economic growth, reliable and affordable energy is no longer a supporting factor; it is a prerequisite.

The broader significance of the budget therefore extends well beyond the energy sector. Its success will ultimately be measured not only by megawatts generated or infrastructure built, but by its ability to strengthen economic resilience, enhance industrial productivity and reduce vulnerabilities associated with excessive dependence on imported energy.

Energy security as economic security

Energy security can no longer be viewed as a standalone sectoral concern; it has become a fundamental pillar of economic security. Bangladesh currently imports approximately 95% of its petroleum products, a significant share of its natural gas demand in the form of LNG, and nearly all of its LPG requirements. As a result, fluctuations in global energy markets have direct implications for inflation, foreign exchange reserves, fiscal stability and overall economic growth.

Recent geopolitical tensions in the Middle East, the aftermath of the Russia–Ukraine conflict and recurring disruptions to global supply chains have underscored a critical reality: countries with high levels of energy import dependence are increasingly vulnerable to external economic shocks. For Bangladesh, the challenge is not simply securing adequate energy supplies, but ensuring that energy remains affordable, reliable and resilient in an increasingly uncertain global environment.

In this context, the government's emphasis on domestic gas exploration, offshore bidding, refinery expansion, LNG infrastructure development and the creation of strategic energy reserves reflects a broader effort to strengthen the country's energy security architecture. These initiatives should therefore be viewed not merely as energy-sector projects, but as strategic investments aimed at enhancing economic resilience, reducing exposure to external shocks and supporting long-term sustainable growth.

Domestic gas: The foundation of affordable and secure energy

For Bangladesh, no energy source currently offers greater economic value than domestically produced natural gas. Every additional unit of domestic gas production reduces LNG imports, conserves foreign exchange, lowers electricity generation costs and eases the fiscal burden associated with energy subsidies.

With pressures on the balance of payments remaining elevated and energy demand continuing to grow, increasing domestic gas production remains one of the most effective ways to strengthen energy security and reduce exposure to external shocks.

The budget's emphasis on Bapex's exploration programme, including the drilling of 69 new wells, 31 workover operations, expanded seismic surveys and the procurement of new exploration rigs, represents one of its most strategically important initiatives. It signals a renewed policy focus on developing domestic energy resources rather than relying excessively on imported fuels to meet growing energy needs.

Exploration, of course, carries inherent risks, and not every well will lead to a commercial discovery. Yet countries that fail to invest in exploration effectively guarantee continued dependence on imported energy. From that perspective, the budget's renewed commitment to domestic resource development is both economically prudent and strategically necessary.

Offshore exploration: Bangladesh's next energy frontier

Few developments are likely to have a greater impact on Bangladesh's long-term energy future than a significant offshore gas discovery. Recognising this opportunity, the government has revised the Production Sharing Contract (PSC) framework and reopened 24 offshore blocks, nine shallow-water and 15 deep-water blocks, to international investors.

However, attracting major international energy companies will require more than competitive contract terms. Investors also place considerable emphasis on policy consistency, regulatory efficiency, access to high-quality geological data, profit repatriation mechanisms and foreign-exchange convertibility.

Encouragingly, the government appears to be pursuing a dual-track strategy: attracting international expertise and capital while simultaneously strengthening BAPEX's own exploration capabilities. This balanced approach can help combine global experience with domestic institutional development.

At a broader level, offshore exploration is not merely an energy initiative; it is a strategic investment in Bangladesh's future economic and energy security.

Renewable energy: From policy ambition to economic opportunity

Perhaps the most forward-looking aspect of the FY27 budget is its strong and sustained support for renewable energy. The government has proposed tax exemptions for the renewable energy sector until 2035, duty waivers on key solar components, tax incentives for battery manufacturing and energy storage technologies, and tax rebates for renewable energy users.

More importantly, it has reaffirmed ambitious targets of generating 20% of electricity from renewable sources by 2030 and between 30% and 50% by 2050.

Collectively, these measures signal a broader shift in policy thinking. For much of the past two decades, Bangladesh's energy strategy was primarily focused on expanding electricity generation capacity to meet rapidly growing demand. The challenge today is fundamentally different. The objective is no longer simply to generate more electricity, but to produce it in a manner that is more affordable, sustainable, resilient and economically efficient.

The success of the budget will ultimately be measured not only by megawatts generated or infrastructure built, but by its ability to strengthen economic resilience, enhance industrial productivity and reduce vulnerabilities associated with excessive dependence on imported energy.

The FY27 budget therefore reflects the early foundations of a broader transition from energy expansion to energy transition.

The significance of this transition extends well beyond its environmental benefits. For a country that remains heavily dependent on imported fuels, renewable energy is increasingly becoming an economic necessity as much as an environmental imperative. Diversifying the energy mix can reduce exposure to volatile international energy markets, strengthen long-term energy security and improve economic resilience.

At the same time, renewable energy presents a significant economic opportunity. The expansion of solar power, battery storage, energy management systems and associated supply chains could stimulate new investment, encourage technology transfer and create green employment opportunities.

Why grid modernisation matters

Achieving renewable-energy targets will require a comprehensive transformation of the energy system, not merely the addition of new generation projects. A modern energy system depends not only on how electricity is produced, but also on how efficiently it is transmitted, distributed, stored and managed.

As the share of renewable energy increases, investments in smart grids, battery storage, advanced transmission infrastructure and rooftop solar integration will become increasingly important. The next phase of Bangladesh's energy transition will therefore be less about building additional power plants and more about modernising the systems that connect, distribute and manage electricity.

Rooppur and Bangladesh's future energy mix

Another significant development highlighted in the budget is the anticipated integration of the first 1,200 MW unit of the Rooppur Nuclear Power Plant into the national grid. This represents an important milestone in Bangladesh's efforts to diversify its energy mix and establish a more balanced and resilient power system. Unlike solar and wind power, nuclear energy is not weather-dependent, while its exposure to international fuel-market volatility is generally lower than that of gas-fired generation.

As Bangladesh plans for the coming decades, a balanced energy portfolio combining domestic gas, renewable energy, nuclear power and regional electricity trade is likely to provide the most resilient and cost-effective pathway for meeting growing energy demand.

Power sector reform: The missing piece of long-term sustainability

The budget also acknowledges a critical reality: achieving energy security will ultimately require a financially sustainable power sector. Annual subsidies in the power and energy sector now exceed Tk40,000 crore. While subsidies have played an important role in maintaining affordability and supporting economic activity, their continued expansion is neither fiscally desirable nor economically sustainable.

Given these realities, the government's emphasis on reviewing capacity payments, reassessing power purchase agreements (PPAs), adopting least-cost generation principles and promoting competitive bidding represents an important step towards improving efficiency and strengthening financial discipline. These measures have the potential to reduce unnecessary costs, improve resource allocation and ensure that future investments deliver greater value for both consumers and taxpayers.

The challenge, however, is not simply to reduce subsidies, but to do so in a manner that preserves affordability, protects vulnerable consumers and maintains industrial competitiveness.

EVs and the future of energy demand

The budget's support for electric vehicles (EVs) deserves particular attention. While EV incentives are often viewed primarily through an environmental lens, they are equally important from the perspectives of energy security and economic efficiency.

The transport sector remains one of the largest consumers of imported petroleum products. Gradual electrification, particularly of public transport, could reduce dependence on imported diesel, improve urban air quality, lower carbon emissions and ease pressure on foreign exchange reserves.

Viewed through a broader policy lens, the expansion of electric mobility represents not merely a transformation of the transport sector, but a strategic component of Bangladesh's efforts to strengthen energy security, reduce dependence on imported fuels and advance the transition towards a cleaner, more resilient and sustainable energy future.

The bigger picture: From energy expansion to energy transition

The FY27 energy budget is not without its challenges. Important hurdles remain, including project implementation, financing constraints, regulatory reforms, institutional capacity and the need to sustain investor confidence. Yet despite these challenges, the broader policy direction is increasingly clear.

The budget seeks to bring together energy security, domestic resource development, renewable energy expansion, fiscal discipline, technological modernisation and sectoral governance within a single strategic framework.

Its significance therefore lies not in the size of the allocation, but in the vision it articulates for the future of Bangladesh's energy sector. At its core, the budget reflects a growing recognition that energy policy and economic policy are increasingly inseparable. Energy security, industrial competitiveness, export performance, investment attraction and macroeconomic stability are now deeply interconnected policy objectives.

If effectively implemented, the FY27 budget may ultimately be remembered not for the size of its allocation, but for marking the beginning of Bangladesh's transition towards a more secure, competitive and sustainable energy future, one that supports industrial transformation, strengthens economic resilience and enhances long-term growth prospects.

Inflation fell slightly in June but still remained above 9%, extending a three-month streak of elevated price pressures.

According to the latest data released by the Bangladesh Bureau of Statistics (BBS) today (6 July), point-to-point inflation at the national level stood at 9.16% in June, down from 9.42% in May. In preceding two months, i.e in March and April, the rate stood at 8.71% and 9.02% respectively.

In June last year, the rate was 8.48%.

Although the revised budget for FY2025-26 targeted average inflation at 7%, the goal was not achieved.

According to BBS, the 12-month moving average inflation for the period from July 2025 to June 2026 stood at 8.68%, down from 10.03% during the corresponding period from July 2024 to June 2025.

The BBS report shows that both food and non-food inflation declined in June. Food inflation fell to 8.60% in June from 9.06% in May, while non-food inflation eased to 9.61% from 9.71%.

Food inflation was 7.39% in June 2025, rising to 8.60% over the past year. During the same period, non-food inflation increased from 9.37% to 9.61%.

Explaining the slight decline in June inflation, Dr Mustafa K Mujeri, Executive Director of the Institute for Inclusive Finance and Development (InM), said the fall could largely be attributed to seasonal factors.

"First, the modest decline in inflation in June can largely be regarded as a seasonal effect. At this time of the year, supply generally improves, particularly for food items. As a result, market pressures ease somewhat and inflation temporarily declines. Therefore, it is reasonable to explain the decline in both food and non-food inflation primarily by seasonal factors," he said.

However, he cautioned that the decline should not be interpreted as a lasting shift.

"For most of the current fiscal year, inflation has remained persistently high and has not declined significantly. Overall, it has followed either an upward or consistently elevated trend, clearly indicating that the government has failed to achieve its inflation target," he added.

Mujeri said that despite the slight decline, inflation remained at an uncomfortably high level.

"Although inflation has eased somewhat, it is still too high to provide any real relief. The cost of living remains under considerable pressure because the current rate is still well above a desirable or tolerable level."

He stressed that effective measures were urgently needed to bring inflation under control.

"It will not be enough to rely solely on the central bank's monetary policy. Although the policy interest rate has been maintained at 10%, stronger coordination is needed through supply-side management, fiscal policy and market supervision. A comprehensive and robust policy response will be essential if the government is to achieve its target of bringing inflation down to 7.5%."

Mujeri also noted that fuel prices had contributed to inflationary pressures.

"Although the fuel sector has stabilised somewhat and prices have been adjusted in line with the market, the full impact has not yet been reflected in the economy. The effects of higher fuel prices usually take time to filter through, so they may become more evident in the coming months."

Professor Dr Sayema Haque Bidisha of the Economics Department at the University of Dhaka said June's modest decline should not be interpreted as a significant improvement.

"While it is a positive sign, it would be premature to describe it as a lasting trend. We need to observe the situation over the next one or two months to determine whether this is merely a temporary fluctuation or the beginning of a sustained decline. If inflation continues to fall consistently, that would certainly be encouraging."

Rural inflation falls to 9.23%

Inflation in rural areas also eased slightly in June, although it remained elevated.

According to BBS, point-to-point inflation in rural Bangladesh fell to 9.23% in June from 9.48% in May.

Food inflation in rural areas declined to 8.52% from 8.95%, while non-food inflation stood at 9.98%, virtually unchanged from the previous month.

Urban inflation declines to 9.01%

Inflation in urban areas also remained high in June despite a slight decline.

The BBS report showed that point-to-point inflation in urban areas fell to 9.01% in June from 9.25% in May.

Urban food inflation declined to 8.76% from 9.29%, while non-food inflation eased to 9.16% from 9.24%.

Wage growth continues to lag inflation

At the national level, point-to-point wage growth stood at 8.18% in June, down slightly from 8.21% in May.

According to BBS, wage growth has remained below the inflation rate for 52 consecutive months.

Bangladesh's export competitiveness is coming under increasing pressure ahead of its graduation from the least- developed country (LDC) status due to uncertainty over post-graduation market access, tougher compliance requirements, and new free-trade agreements (FTAs) signed by competing exporting countries, according to the Research and Policy Integration for Development (RAPID). Geographic

Weak infrastructure, high production costs, inefficient logistics, and slow export diversification are further constraining export growth, it says.

With Bangladesh preparing for LDC graduation, the research organisation has called for an urgent and coordinated competitiveness reform programme.

The observations came in a keynote paper presented at a workshop titled "LDC Graduation and Trade Competitiveness" and held at the National Press Club in the capital on Monday.

The presentation was delivered by RAPID Chairman Dr Mohammad Abdur Razzaque.

Speaking as the chief guest, Information and Broadcasting Minister Zahir Uddin Swapon called for making the most of the possible three-year LDC graduation extension by strengthening export competitiveness, implementing policy reforms, and preparing for post-LDC challenges.

He also stressed that sustainable development would not be possible without economy-friendly politics.

" Politics must support the economy. Otherwise, discussions on these issues will remain merely theoretical," he said.

The minister said although Bangladesh had not yet formally graduated from the LDC category, effective preparations must begin immediately to address the challenges in the export sector.Politics

Those challenges were expected to intensify after graduation, he added.

Swapon noted that the government had applied to the relevant United Nations committee in February this year to defer the graduation until November 2029.

The additional period, he said, should not be viewed as an opportunity for delay but as a window to complete the necessary preparations for a smooth transition.

"The government's policymakers and relevant officials are already working on the issue," he said, adding that if the extension was approved, it would facilitate policy reforms, boost export growth, remove administrative bottlenecks, and help the country better adapt to the post-LDC environment.

Presenting the keynote, Dr Razzaque said Bangladesh's export sector was entering a far more challenging global trading environment as competition intensified and preferential market access gradually eroded.

He noted that competitors such as India and Vietnam were expanding their network of free trade agreements, strengthening their position in key export destinations, including the European Union, while Bangladesh risked losing its traditional competitive edge after graduation.Economic Policy Reviews

He warned that the withdrawal of duty-free market access following graduation could expose Bangladeshi exports to higher tariffs, undermining their price competitiveness unless the country undertook comprehensive reforms.

At the same time, he observed that global trade was increasingly being shaped by environmental, climate, and labour-related standards, making compliance an essential requirement for sustaining market access.

According to Dr Razzaque, Bangladesh can no longer rely solely on low production costs.

Enhancing productivity, improving trade competitiveness, and meeting evolving sustainability and compliance requirements would be critical to maintaining export growth in the post-LDC era, he said.

Doulot Akter Mala, president of the Economic Reporters' Forum (ERF), attended the programme as the guest of honour.

She stressed the need for urgent strategic preparations ahead of graduation, saying the absence of a revised transition strategy, declining foreign direct investment (FDI), and weak competitiveness remained major concerns.Geographic Reference

Mala also called for restoring business confidence through stable policies, reducing bureaucratic hurdles, strengthening research and development, and aligning budgetary commitments with the country's economic realities.

Dr M Abu Eusuf, executive director of RAPID, delivered the address of welcome.

Bangladesh is no longer the biggest beneficiary of China's shrinking share in the global apparel market, with Cambodia and Vietnam overtaking it in attracting orders over the past four years, according to a new study by Research and Policy Integration for Development.

The study also warned that Bangladesh's readymade garment exports to the European Union could decline by more than 43% after its graduation from the least developed country category if exports become subject to the EU's most favoured nation tariffs.

The findings were presented at a workshop organised by RAPID at the National Press Club in Dhaka yesterday (6 July).

According to the study, China's share of the global apparel market fell from 26.33% in 2022 to 23.56% in 2025. However, Bangladesh failed to capitalise on the shift. Its global market share remained almost stagnant, slipping slightly from 11.67% in 2022.

During the same period, Cambodia's share rose from 3.34% to 4.26%, while Vietnam's increased from 8.57% to nearly 9%.

"Bangladesh is no longer the automatic beneficiary of orders shifting away from China, signalling a weakening position in the global apparel market," said RAPID Chairman Dr MA Razzaque while presenting the keynote paper.

The study showed that between 2015 and 2022, Bangladesh had been the biggest winner from China's declining dominance. During that period, China lost nearly 10 percentage points of global apparel market share, while Bangladesh gained 3.75 percentage points. Vietnam and Cambodia gained 2.46 percentage points and 0.90 percentage points respectively.

The trend changed after 2022. While China lost another 2.77 percentage points of market share between 2022 and 2025, Cambodia captured 0.90 percentage points and Vietnam gained 0.40 percentage points. Bangladesh's share, meanwhile, remained virtually unchanged.

Speaking to TBS, Razzaque attributed the slowdown to policy inconsistencies, an unfavourable investment climate, growing Chinese investment in Cambodia and Vietnam, and Bangladesh's limited capacity to produce man-made fibre and other high-value apparel products.

Industry leaders cited additional domestic challenges.

Fazlul Hoque, managing director of Plummy Fashions Ltd, said Bangladesh has failed to compete with regional rivals in attracting new business despite China's declining exports.

"For the past two and a half years, Vietnam, Cambodia and China have pursued aggressive marketing strategies, while Bangladesh has failed to do so," he told TBS.

He said high business costs, persistent energy shortages and elevated bank lending rates have weakened the country's competitiveness, discouraging new investment.

"We do not see signs of improvement in the near future," he added.

EU tariff risk after LDC graduation

The study also warned that Bangladesh's exports could face a sharp decline after the country graduates from the least developed country status if it fails to secure a preferential trade arrangement with the European Union.

According to the study, Bangladesh's total exports to the EU could fall by more than 36%, while RMG exports could decline by over 43% if the country becomes subject to the EU's Most Favoured Nation tariffs and competing exporters continue to enjoy duty-free access through free trade agreements.

The European Union currently accounts for about half of Bangladesh's roughly $48 billion annual exports.

Bangladesh now enjoys duty-free access to the European Union under the Everything But Arms scheme. However, this preferential treatment will expire after LDC graduation and the transition period unless a new trade arrangement is secured.

Meanwhile, key competitors such as Vietnam and India have already signed free trade agreements with the European Union, enabling them to export many apparel products at zero or preferential tariffs.

Without a similar agreement, Bangladeshi apparel exports could face Most Favoured Nation tariffs of up to 12%, significantly eroding the country's price competitiveness in its largest export market, the study said.

The workshop was attended by Information and Broadcasting Minister Zahir Uddin Swapon as the chief guest. RAPID Executive Director Dr M Abu Yusuf moderated the programme, while Economic Reporters' Forum President Doulot Akter Mala also spoke.

Bangladesh Bank (BB) has introduced a Tk 30 billion refinancing scheme to accelerate agricultural production, agro-processing, preservation infrastructure and export-oriented activities in the Rajshahi and Rangpur divisions.Geographic Reference

To this end, the central bank issued a circular today, saying the fund aims to transform the country’s northern region into a competitive agro-based economic hub by addressing supply chain bottlenecks, reducing post-harvest losses and expanding value-added agricultural industries.

The refinancing facility will remain effective for three years from the date of the circular.

According to the circular, scheduled banks will receive refinance from Bangladesh Bank at an interest rate of 4 percent and will not be allowed to charge borrowers more than 9 percent. The ceiling applies to both conventional and Shariah-based financing.

Bangladesh Bank said the initiative seeks to increase production in the crop, fisheries and livestock sectors, strengthen preservation and marketing facilities, promote agro-based industries and CMSMEs, boost exports of agricultural products and generate employment in the northern region.

Of the total fund, 15 percent has been allocated for agricultural production, including crop cultivation, fisheries, livestock and irrigation equipment.

Another 35 percent will finance preservation and infrastructure projects, including cold storage, warehouses, silos and cold-chain logistics, while working capital will also be eligible under this category.

A further 35 percent has been earmarked for agro-processing industries, including automatic rice mills, bio-fertiliser plants and biotechnology-based vaccine and medicine manufacturing. Working capital for these industries will also qualify for financing.

The remaining 15 percent will support export-oriented processing and supply of agricultural products.

Under the scheme, individual farmers or groups will be eligible for loans of up to Taka 30 lakh for production activities. Loans of up to Taka 40 crore will be available for preservation infrastructure and agro-processing industries while export-oriented projects will be eligible for financing of up to Taka 15 crore. Banks may increase these limits by up to 20 percent based on justified demand.

The repayment period has been fixed at a maximum of 18 months, including a three-month grace period, for production loans. Loans for preservation, processing and export sectors will have a tenure of up to 36 months, including a grace period of three to six months.

To encourage financial inclusion, Bangladesh Bank has instructed banks to consider alternative collateral arrangements, including personal, social and group guarantees, for women entrepreneurs and marginal farmers who lack conventional security.

The central bank also directed that the refinancing facility be used only for fresh loan disbursements and not for adjustment, rescheduling or settlement of existing loans.

Banks must sign a participation agreement with the Agricultural Credit Department-2 (ACD-2), which will administer the scheme. Refinance claims must be submitted by the 15th of the following month, while delayed claims beyond two months without valid justification will not be accepted.

Bangladesh Bank warned that any bank charging borrowers above the prescribed interest ceiling or misusing the refinancing facility would be subject to an additional 2 percent penal interest on the misused amount.

The circular, issued under Section 45 of the Bank Company Act, 1991, came into effect immediately.

The total market capitalisation of the Dhaka Stock Exchange (DSE) crossed the Tk7 lakh crore mark today (6 July) for the first time in more than three months, signalling a continued recovery in investor confidence amid sustained gains in the country's stock market.

The market capitalisation of the country's premier bourse rose to over Tk7 lakh crore, the highest level since 16 March, when it stood at Tk7.06 lakh crore. The milestone comes as the benchmark DSEX index has extended its recent rally, supported by expectations of market-friendly regulatory reforms and a series of policy initiatives aimed at strengthening the capital market, according to analysts.

They said reclaiming the Tk7 lakh crore threshold carries strong psychological significance, reflecting a rebound in the overall value of listed companies as investors continue to accumulate fundamentally strong blue-chip and large-cap stocks after a prolonged bearish spell.

The DSEX advanced 12 points, or 0.22%, to close at 5,799 today, hovering just below the key 5,800-point resistance level. The blue-chip DS30 index also edged up one point to settle at 2,192.

Market breadth remained slightly positive, with 166 issues advancing, 155 declining and 71 remaining unchanged.

Despite the gains, trading activity moderated. Daily turnover declined 7% to Tk1,416 crore from the previous session, indicating some investors opted to book profits following the market's recent rally.

According to Sheltech Brokerage Limited's daily market review, selective buying in heavyweight and fundamentally strong stocks continued to drive the market higher.

The brokerage said optimism over recent policy measures aimed at deepening the capital market and improving transparency supported investor sentiment. Although profit-taking emerged midway through the trading session, sustained buying interest in selected large-cap stocks outweighed the selling pressure, allowing the benchmark index to extend its winning streak.

Sector-wise, the textile sector accounted for the largest share of turnover at 16.8%, followed by insurance at 12.67% and pharmaceuticals at 12.17%.

An analysis by BRAC EPL Stock Brokerage showed that most major sectors ended in positive territory. The fuel and power sector led the gains, rising 1.08%, followed by telecommunications, which added 0.63%, and food and allied, up 0.57%.

The non-bank financial institution (NBFI) sector was the day's worst performer, slipping 0.25% as investors remained cautious over the sector's ongoing liquidity concerns.

The positive momentum also extended to the Chittagong Stock Exchange (CSE). The Selective Categories' Index (CSCX) climbed 42 points to 9,488, while the All Share Price Index (CASPI) gained 73 points to close at 15,489. However, turnover at the port city bourse plunged 75% to Tk16.59 crore.

Uttara Finance and Investments Limited has r restated its 2019 financial statements, posting a consolidated net loss of Tk308 crore in place of an earlier reported profit after a Bangladesh Bank-ordered forensic audit uncovered widespread irregularities in the non-bank financial institution's accounts.

The revised financial statements, published through the Dhaka Stock Exchange (DSE) today (6 July), showed a consolidated loss per share (EPS) of Tk23.43, a restated net asset value (NAV) per share of Tk29.55 and net operating cash flow per share (NOCFPS) of Tk13.24 for the year ended 31 December 2019.

The restatement marks a sharp reversal from the original audited accounts, which had reported a consolidated net profit of Tk118 crore in 2019, up 14% from the previous year. Based on those results, the board had recommended a 15% cash dividend and a 5% stock dividend.

However, Bangladesh Bank later rejected the financial statements audited by SF Ahmed and Co after a special audit by KPMG Bangladesh uncovered discrepancies involving about Tk5,300 crore in the company's financial records.

The audit, conducted under the central bank's Resolution and Recovery Department (RRH), prompted the company to restate its financial statements in line with regulatory directives.

Uttara Finance also released revised financial statements for 2020 and 2021, showing continued financial deterioration.

For the year ended 31 December 2020, the company reported a consolidated loss per share of Tk35.98, while NAV per share turned negative at Tk9.26. Net operating cash flow per share stood at Tk12.04.

In 2021, it posted a consolidated loss per share of Tk23.48. NAV per share further declined to negative Tk32.74, while net operating cash flow per share fell to negative Tk20.38.

The company told the stock exchange that AGMs for 2020 and 2021 have become time-barred due to delays in finalising audited financial statements. It plans to seek High Court permission to hold the overdue AGMs after completing and auditing its pending financial statements for 2022-2025. Record dates and AGM schedules will be announced after court approval.

Following the financial irregularities, Bangladesh Bank dissolved the NBFI's sponsor-director board in 2022 and appointed a new board to restore governance, transparency and accountability.

The company remains in the "Z" category on the stock exchange for failing to hold annual general meetings within the stipulated timeframe.

As of June 2026, sponsors and directors held 44.44% of the company's shares, institutional investors 31.71%, foreign investors 7.82% and general investors 16.03%.

Bangladesh’s foreign exchange reserves stood at $37.85 billion, according to the latest data released by the Bangladesh Bank (BB) on Monday.Bangladesh Politics News

The central bank said that under the International Monetary Fund’s (IMF) Balance of Payments and International Investment Position Manual (BPM-6) accounting standard, the country’s reserves were recorded at $33.20 billion.

Officials noted that the reserve position reflects the country’s external sector stability amidst ongoing global economic uncertainties.

The country’s plastic industry has slowed sharply following the recent Middle East crisis, as rising raw material prices and weak consumer demand continue to hit manufacturers hard, industry leaders said.

The steep rise in the cost of imported plastic raw materials has severely affected producers, Shamim Ahmed, president of the Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA), told journalists at the association’s office in Dhaka’s Paltan yesterday.
Before the conflict, key raw materials were imported at around $800 to $900 per tonne. Prices have now increased to between $1,500 and $1,600 per tonne, he said.

“The sharp rise in raw material costs is putting immense pressure on the industry. Higher production costs are also driving up the prices of finished products,” Shamim said.

The country’s plastic and packaging industry, worth around Tk 60,000 crore annually, recorded monthly sales of about Tk 5,000 crore before the conflict. This has now fallen to around Tk 3,750 crore, a decline of at least 25 percent, according to the BPGMEA.

Shamim said at least 25 percent of customers have reduced their orders since the conflict began, while some segments have seen demand drop by as much as 40 percent.

The packaging segment, which accounts for about 40 percent of the industry, has been the worst affected as demand for fast-moving consumer goods weakens amid lower household spending, he added.

“We are not the end product; we supply other industries,” Shamim said. “When consumers buy less detergent, food or household products, demand for our packaging and plastic components drops immediately.”

According to him, Bangladesh has around 6,000 plastic manufacturing units, of which 4,000 to 4,500 supply products to other sectors, including garments, pharmaceuticals, food processing and beverages. The industry serves around 30,000 businesses in total.

“Many people still think plastic means buckets, mugs and kitchenware. But plastic has become an essential part of industrial production and supply chains,” he said.

He warned that any disruption in the sector would quickly affect the wider economy, as most manufacturing industries depend heavily on plastic packaging and components.

Shamim also alleged that customs authorities often assess imported raw materials at higher values than invoice prices to meet revenue targets, even though such materials are sourced from large international suppliers where under- or over-invoicing is unlikely.

On recycling, Shamim said Bangladesh has a relatively high plastic recycling rate in the region, but investment in waste-to-energy infrastructure remains behind neighbouring countries.

KM Iqbal Hossain, senior vice-president of BPGMEA, said manufacturers have been absorbing much of the increased production costs instead of passing them on to buyers.

“We are negotiating with our clients to raise prices because production costs have increased by at least 30 percent, but we have not yet fully adjusted our prices,” he added.

Industry leaders said higher costs and weak consumer demand are putting severe pressure on profit margins, with many firms struggling to stay viable.

Iqbal also said Bangladesh is lagging in developing waste-to-energy projects. “Countries like Indonesia are rapidly expanding waste-to-energy projects. In Bangladesh, we have been trying to set up even one large-scale waste-to-energy plant for the past five years,” he said.

Despite the slowdown in traditional plastic manufacturing, Shamim said the recycling segment continues to grow and is creating new jobs as businesses place greater focus on sustainability.

Iqbal criticised high industrial land prices, weak incentives and complex regulations, saying these factors are discouraging investment and job creation.

He questioned why industrial plots developed by the Bangladesh Small and Cottage Industries Corporation are sold at prices much higher than acquisition costs, forcing entrepreneurs to spend heavily on land instead of production.
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Comparing with neighbouring countries, Iqbal said governments in India provide industrial land, utilities and incentives to support manufacturing and exports.

He also highlighted challenges faced by plastic and toy manufacturers, saying many key components must be imported because local production is not commercially viable. However, manufacturers still pay commercial import duties on these inputs, reducing competitiveness against producers in countries such as China and Sri Lanka.

The National Board of Revenue’s (NBR) collection of more than Tk360,000 crore during the first eleven months of the fiscal year deserves recognition. At a time when Bangladesh is grappling with mounting fiscal pressures, this performance signals improvement in revenue administration despite a challenging economic environment.

Higher revenue collection strengthens the government’s ability to finance infrastructure, education, healthcare, and social protection while reducing excessive dependence on domestic and external borrowing.
Yet, beyond the headline figure lies a more important policy question: Is Bangladesh pursuing revenue growth in a sustainable manner?

The answer depends not only on how much revenue is collected today, but on whether the country’s revenue strategy is built on realism, efficiency, and trust.

Every year, Bangladesh announces ambitious revenue targets as part of the national budget. While optimism has its place in public finance, persistent gaps between targets and actual collections have become a recurring feature of our fiscal landscape.

When revenue targets consistently prove unattainable, they gradually lose their value as planning instruments. Revenue forecasting must therefore be grounded in economic realities rather than aspirations. Tax collection ultimately reflects economic activity. Ignoring these realities while setting ambitious targets only widens the gap between expectations and outcomes.

A balanced revenue strategy begins with acknowledging the economy’s actual capacity.

Bangladesh continues to have one of the lowest tax-to-GDP ratios among comparable developing economies. However, the real issue is not necessarily tax rates but a narrow tax base and uneven compliance. A small segment of formal businesses and salaried individuals continues to shoulder a disproportionate share of the tax burden, while large parts of the economy remain outside the formal tax net.

Expanding the taxpayer base should therefore become the central objective of tax reform.

Rather than repeatedly imposing additional obligations on compliant taxpayers, policymakers should focus on identifying new taxpayers, formalising informal businesses, strengthening digital record-keeping, and improving data sharing among government agencies. Technology offers opportunities to detect tax evasion while reducing compliance costs for honest taxpayers. Equally important is simplifying the tax system. Businesses are more likely to comply when tax rules are clear, predictable, and consistently applied. A modern tax administration should view taxpayers as partners in national development rather than merely subjects of enforcement.

This is particularly important as Bangladesh seeks greater domestic and foreign investment. Frequent regulatory changes and inconsistent interpretation of tax laws increase business uncertainty and discourage long-term investment. A stable and transparent tax environment ultimately generates more sustainable revenue than short-term collection drives.

Another often overlooked aspect of revenue mobilisation is public trust. Citizens are more willing to pay taxes when they see visible improvements in public services and infrastructure. Revenue collection should therefore be viewed not merely as a fiscal exercise but as part of a broader governance framework where accountability and service delivery strengthen voluntary compliance.

Bangladesh’s development ambitions will require steadily rising public revenues in the coming years. These objectives cannot be financed indefinitely through borrowing alone. The solution lies in building a tax system that is broader, fairer, more efficient, and more trusted.

The recent progress made by the NBR demonstrates that improvements are possible. The next phase of reform should focus less on announcing ambitious collection numbers and more on strengthening institutional capacity, expanding the formal economy, reducing tax evasion, and making compliance easier.

Balanced revenue growth is not about collecting the maximum amount in a single fiscal year. It is about creating a tax system capable of supporting Bangladesh’s long-term economic transformation. Realistic target-setting, efficient administration, and greater taxpayer confidence will ultimately produce more credible fiscal outcomes and a stronger foundation for sustainable economic growth.

Bangladesh's export competitiveness is coming under increasing pressure ahead of its graduation from the least- developed country (LDC) status due to uncertainty over post-graduation market access, tougher compliance requirements, and new free-trade agreements (FTAs) signed by competing exporting countries, according to the Research and Policy Integration for Development (RAPID). Geographic

Weak infrastructure, high production costs, inefficient logistics, and slow export diversification are further constraining export growth, it says.

With Bangladesh preparing for LDC graduation, the research organisation has called for an urgent and coordinated competitiveness reform programme.

The observations came in a keynote paper presented at a workshop titled "LDC Graduation and Trade Competitiveness" and held at the National Press Club in the capital on Monday.

The presentation was delivered by RAPID Chairman Dr Mohammad Abdur Razzaque.

Speaking as the chief guest, Information and Broadcasting Minister Zahir Uddin Swapon called for making the most of the possible three-year LDC graduation extension by strengthening export competitiveness, implementing policy reforms, and preparing for post-LDC challenges.

He also stressed that sustainable development would not be possible without economy-friendly politics.

" Politics must support the economy. Otherwise, discussions on these issues will remain merely theoretical," he said.

The minister said although Bangladesh had not yet formally graduated from the LDC category, effective preparations must begin immediately to address the challenges in the export sector.Politics

Those challenges were expected to intensify after graduation, he added.

Swapon noted that the government had applied to the relevant United Nations committee in February this year to defer the graduation until November 2029.

The additional period, he said, should not be viewed as an opportunity for delay but as a window to complete the necessary preparations for a smooth transition.

"The government's policymakers and relevant officials are already working on the issue," he said, adding that if the extension was approved, it would facilitate policy reforms, boost export growth, remove administrative bottlenecks, and help the country better adapt to the post-LDC environment.

Presenting the keynote, Dr Razzaque said Bangladesh's export sector was entering a far more challenging global trading environment as competition intensified and preferential market access gradually eroded.

He noted that competitors such as India and Vietnam were expanding their network of free trade agreements, strengthening their position in key export destinations, including the European Union, while Bangladesh risked losing its traditional competitive edge after graduation.Economic Policy Reviews

He warned that the withdrawal of duty-free market access following graduation could expose Bangladeshi exports to higher tariffs, undermining their price competitiveness unless the country undertook comprehensive reforms.

At the same time, he observed that global trade was increasingly being shaped by environmental, climate, and labour-related standards, making compliance an essential requirement for sustaining market access.

According to Dr Razzaque, Bangladesh can no longer rely solely on low production costs.

Enhancing productivity, improving trade competitiveness, and meeting evolving sustainability and compliance requirements would be critical to maintaining export growth in the post-LDC era, he said.

Doulot Akter Mala, president of the Economic Reporters' Forum (ERF), attended the programme as the guest of honour.

She stressed the need for urgent strategic preparations ahead of graduation, saying the absence of a revised transition strategy, declining foreign direct investment (FDI), and weak competitiveness remained major concerns.Geographic Reference

Mala also called for restoring business confidence through stable policies, reducing bureaucratic hurdles, strengthening research and development, and aligning budgetary commitments with the country's economic realities.

Dr M Abu Eusuf, executive director of RAPID, delivered the address of welcome.

Bangladesh's plastic industry has suffered an estimated Tk15,000 crore decline in sales as the Middle East war, volatility in global petrochemical markets, and persistent domestic power and gas shortages disrupt production and weaken demand, according to industry leaders.

Manufacturers say delays in importing raw materials, rising production costs and sluggish domestic demand have forced many factories to cut output, while hundreds of small and medium-sized enterprises are struggling to survive.

According to the Bangladesh Plastic Goods Manufacturers and Exporters Association, the country's plastic market is currently worth around Tk60,000 crore, with packaging accounting for about 40% of the market.

"Our industry's average sales have fallen by more than 25%, while some companies have experienced declines of 35% to 40%," the association's President Shamim Ahmed told The Business Standard. "Overall, we estimate that the sector has lost around Tk15,000 crore in sales."

The association estimates that nearly 300 plastic factories have already suspended production, most of them SMEs unable to cope with disruptions in raw material supplies, unreliable gas and electricity services, and working capital shortages.

Although the current fiscal year's budget included some positive measures for the industry, Shamim said several key demands from manufacturers remained unaddressed.

To reduce dependence on imported virgin resin, manufacturers are increasing the use of recycled raw materials and exploring alternative sourcing markets.

According to the manufacturers and exporters association, recycled materials now account for about 38% of industry consumption. However, higher virgin resin prices have continued to push up production costs.

Bangladesh's plastic industry relies almost entirely on imported polypropylene, polyethylene, polyvinyl chloride and polyethylene terephthalate resins, most of which come from Saudi Arabia, Qatar, the UAE, Kuwait and Oman. Any disruption in the Middle East or shipping through the Strait of Hormuz directly affects supplies, raising freight, insurance and production costs.

Riad Mahmud, managing director of National Polymer, said international resin prices remain relatively stable, but global supply chains have been severely disrupted. Government-set tariff values on imports have also further increased costs.

Manufacturers have raised product prices by 7% to 8% to offset higher expenses, although intense competition has prevented larger price adjustments, he said.

Raw material delivery times have also lengthened significantly. Previously, shipments reached factories within 18 to 21 days after opening letters of credit. Now deliveries take at least six weeks, while many consignments arrive even later.

Because of raw material shortages and energy constraints, most factories are operating at only 60% to 80% of their installed capacity, Riad added.

KM Iqbal Hossain, senior vice-president of the manufacturers and exporters association, said the price of a 25kg bag of polyethylene terephthalate resin has climbed from around Tk3,000 a few years ago to nearly Tk5,200, meaning an increase of over 73%. However, manufacturers have been able to increase product prices by only 5% to 10%, forcing many companies to continue production at a loss.

According to the association, the circumstances have reduced production by 10% to 30% in many factories. Injection moulding, blow moulding, and extrusion units have been the hardest hit, while reliance on diesel generators has further increased operating costs and complicated the timely delivery of export orders.

Industry insiders say sales have declined most sharply in construction-related and household plastic products, while demand for food, pharmaceutical, agricultural and export-oriented packaging has remained comparatively stable.

Manufacturers say the crisis has exposed the risks of Bangladesh's heavy dependence on Middle Eastern petrochemical supplies. They argue that diversifying raw material sources, expanding the use of recycled resins, ensuring reliable energy supplies and strengthening policy support will be essential to maintaining the industry's long-term competitiveness.

During a five-day visit to Bangladesh, Japan International Cooperation Agency (Jica) President Tanaka Akihiko underscored the strategic importance of the Moheshkhali-Matarbari Integrated Infrastructure Development Initiative.

After his trip to the project’s power plant and deep seaport, Tanaka said it would play a pivotal role in strengthening Bangladesh’s energy security and trade connectivity while advancing Japan’s “Updated Free and Open Indo-Pacific” vision.

Concluding his visit yesterday, he reiterated Jica’s long-term commitment to Bangladesh’s development, underscoring Japan’s continued support for the country’s flagship infrastructure projects.

During his stay, Tanaka held talks with Prime Minister Tarique Rahman, during which both sides reaffirmed the strength of bilateral relations and discussed ongoing and future cooperation.

The discussions centred on major Japanese-backed projects, including the Dhaka Metro Rail, the expansion of Hazrat Shahjalal International Airport, the Moheshkhali-Matarbari Integrated Infrastructure Development Initiative and the Bangladesh Special Economic Zone.

Tanaka visited several Japanese-funded projects, including the third terminal of Hazrat Shahjalal International Airport
Both sides also highlighted the importance of the 50 billion Japanese yen emergency support package under the POWERR Asia initiative to bolster regional energy security.

As part of his itinerary, Tanaka visited several Japanese-funded projects, including the third terminal of Hazrat Shahjalal International Airport, which is being financed through Jica’s concessional loan programme.

Once operational, he said, the terminal is expected to transform Bangladesh’s main international gateway by enhancing passenger services while supporting trade, tourism and investment.

Tanaka also attended the 10th memorial ceremony marking the deaths of the seven Japanese nationals killed in the Holey Artisan Bakery attack in July 2016. The ceremony paid tribute to the victims and reaffirmed the shared values of peace, resilience and friendship between Bangladesh and Japan.

During the visit, he met Khalilur Rahman, minister for foreign affairs; Shama Obaed Islam, state minister for foreign affairs; Mirza Fakhrul Islam Alamgir, minister for local government, rural development and cooperatives; Amir Khosru Mahmud Chowdhury, minister for finance and planning; Iqbal Hassan Mahmood, minister for power, energy and mineral resources; and Shaikh Rabiul Alam, minister for roads, transport and bridges, who also oversees the shipping and railways portfolios.

In Cox’s Bazar, Tanaka observed humanitarian operations in the Rohingya camps and Jica-supported livelihood projects. He met the Refugee Relief and Repatriation Commissioner to discuss the humanitarian situation and ongoing assistance.

He later inspected the Fish Landing Centre under construction in Cox’s Bazar, financed through Jica grant assistance to improve post-harvest handling and quality management, and visited the Fisheries Livelihood Enhancement Project along the Bay of Bengal coast.

The delegation also visited a Jica-supported solid waste management initiative and the Japanese J-Drum technology being implemented by Dhaka North City Corporation, highlighting the agency’s broad-based development partnership with Bangladesh.

Secondary trading of Treasury bonds on the Dhaka Stock Exchange (DSE) remains subdued despite the rapid expansion of the bond market as a parallel interbank trading platform continues to keep institutional investors away from the bourse.Capital Market Insights

T-bond trading on the prime bourse slid 38 per cent year-on-year to Tk 576 million in the first six months through June this year, accounting for less than one per cent of the exchange's total turnover, indicating that the market remains far below its potential.

The lacklustre performance contrasts sharply with Bangladesh Bank's secondary market, with an outstanding balance of Treasury bonds worth nearly Tk 6 trillion; most of the secondary transactions continue to be executed through the central bank's electronic platform instead of the stock exchange.

Banks, which hold more than 85 per cent of outstanding Treasury bonds, prefer trading directly with one another through the central bank's platform, where transactions involve no brokerage commission and offer greater pricing flexibility and liquidity.

Treasury bonds trading through the DSE requires payment of Tk 100 per transaction as commission along with other transaction fees, making exchange-based trading less attractive for institutional investors that handle large volumes of transactions.

Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, said the secondary market of the stock exchange is capable of executing a much higher volume of trades than what was recorded, but structural problems have remained unaddressed.

He explained that since the interbank trading of treasury bonds under the infrastructure of the central bank is still operational and this involves no cost, banks prefer to trade using the central bank platform instead of the stock exchange.Maps

"Since banks can trade bonds directly among themselves without involving brokers, they have little incentive to use the DSE platform."

Mr Shawon also cited cumbersome settlement procedures and custody arrangements, which remain largely linked with the central bank, making transactions through the exchange comparatively less convenient.

Many brokerage firms are also not interested in trading bonds, because trading equities brings higher commission payment.

Another major weakness in the secondary market bond trading through brokers is the absence of dedicated market makers. Unlike mature bond markets, where dealers continuously provide buy and sell quotations, many Treasury bonds listed on the DSE lack sufficient bids and offers, discouraging investors from trading.

The primary function of a market maker is to ensure liquidity. Bond markets, particularly government securities, often have fewer active buyers and sellers than equity markets. Market makers bridge this gap by buying bonds when investors want to sell and selling bonds when investors want to buy.Business & Industrial

Consider an institutional investor who wants to sell Tk 500 million worth of Treasury bonds. If no buyer is immediately available, the market maker purchases the bonds from the investor and later sells them to another investor.

Meanwhile, retail participation has also remained limited as many individual investors are still unfamiliar with bond pricing, yield rates, accrued interest and duration.

"Most retail investors continue to favour equities, fixed deposits and national savings certificates over government securities," Mr Shawon added.

Treasury bonds are coupon-bearing investment instruments with maturities ranging from two to 20 years. Secondary trading of these securities began on the DSE in October 2022 to diversify investment options beyond equities and mutual funds. Currently, 220 Treasury bonds are listed on the exchange, with nearly half of them trading above their Tk 100 face value.

Akramul Alam, head of research at Royal Capital, said the strong performance of the equity market this year has also dampened investor interest in Treasury bonds.

"The equity market delivered more than an 18 per cent return in the first half of the year, making Treasury bonds relatively less attractive for stock market investors," according to Mr Alam.Capital Market Insights

He noted that the interest-rate environment has also shaped trading activity. Rising yields encourage investors to hold bonds until maturity to avoid capital losses, while falling yields lift bond prices and stimulate secondary market trading.

Although the yield of T-bonds is showing a declining trend in the past two months, overall yields are still high.

Market participants, however, are optimistic that the secondary trading of Treasury bonds on the DSE will gain momentum in the coming years, supported by policy changes, declining yields and growing investor awareness.

The central bank's recent introduction of the pro-rata allocation system in primary T-bond auctions is expected to stimulate activity in the secondary market.

A Bangladesh Bank official, requesting anonymity, said one of the objectives behind introducing the pro-rata allocation method was to encourage the development of an active secondary market for government securities.

Under the new mechanism, investors who submit bids in primary auctions receive only a proportion of the amount they have applied for when demand exceeds the government's targeted borrowing.

For example, an investor bidding Tk 1 billion may be allotted only Tk 500 million worth of bonds on a pro-rata basis. The remaining investment requirement would have to be met by purchasing bonds in the secondary market.Maps

"The pro-rata allocation system will naturally encourage investors to turn to the secondary market to complete their desired investments, which should gradually improve liquidity on the stock exchanges too," said Mr Shawon.

Appointing dedicated market makers, simplifying settlement procedures, integrating the DSE's trading infrastructure with Bangladesh Bank's debt management platform, and encouraging banks and institutional investors to execute more trades through the stock exchange are crucial for a vibrant bond market on the stock exchange.

Meaningful growth of T-bond trading will require coordinated structural reforms involving Bangladesh Bank, the Bangladesh Securities and Exchange Commission (BSEC), the Dhaka Stock Exchange and primary dealer banks.

Oil prices fell by more than 1 percent on Monday after Opec+ agreed to further increase its output targets from August while exports from key producers via the Strait of Hormuz are recovering, potentially adding to global supplies.

Brent crude futures fell $1.02, or 1.41 percent, to $71.10 a barrel at 0756 GMT after settling 0.45 percent higher on Friday. US West Texas Intermediate crude was at $67.89 a barrel, down 80 cents, or 1.16 percent. There was no settlement for WTI on Friday as US markets were closed ahead of the Independence Day holiday on Saturday.

Both contracts were little changed last week after mostly falling over the past few weeks, as investors kept a close eye on talks between the US and Iran over the fate of shipping through the Strait of Hormuz while keeping tabs on the recovery in Gulf oil exports.

The Organization of the Petroleum Exporting Countries and their allies including Russia agreed on Sunday to further increase output targets by 188,000 barrels per day from August, on top of similar increases for June and July.

However, the increase has remained largely on paper because of the US-Israeli war on Iran, which closed the Strait of Hormuz to tanker traffic for key Opec producers, including Saudi Arabia, Kuwait and Iraq, capping their output.

“They are selling into a falling market, offering little hope of an imminent price recovery,” PVM analysts said in a note. “However, lower oil prices will undoubtedly stimulate demand further down the line.”

Gulf oil exports in June jumped more than 3 million barrels from May to exceed 10 million barrels per day, although volume remained 40 percent below pre-war levels, data showed.

“We now expect global oil demand to contract by 1.5 million barrels per day in 2026, reflecting a sharper-than-expected downturn in Q2, when year-on-year declines could reach 4 million bpd based on preliminary data,” ANZ said.

“However, we expect demand losses to moderate in the second half of the year as supply improves and some deferred consumption returns,” the bank added.

Abu Dhabi National Oil Company has sold about 16 million barrels of Emirati crude at wider discounts in a fifth spot tender issued since June, trade sources said, underscoring a surge in spot supply.

In addition, oil shipments from Russia’s western ports hit a record high in June and are expected to maintain that level in July as its refineries have been damaged in drone attacks by Ukraine that have forced Moscow to boost crude exports, industry sources said.

The Bangladesh Economic Zones Authority (Beza) has secured $65.1 million in fresh investment commitments for the National Special Economic Zone (NSEZ) after signing separate land lease agreements with Golden Oil Mills Ltd and Delta API Ltd.

The agreements were signed at Beza's conference room in the capital's Agargaon today (5 July).

Under the agreements, Golden Oil Mills will invest $52.8 million on 20 acres of land to establish manufacturing facilities for food products, frozen foods, ice cream, specialty oils and fats, packaging materials, and electronics. The project is expected to create employment for around 6,000 people.

Meanwhile, Delta API will invest $12.3 million in 12 acres of land to set up a manufacturing plant for active pharmaceutical ingredients (APIs). The project is expected to generate around 200 jobs.

The agreements were signed at Beza's conference room in the capital’s Agargaon today (5 July). Photo: Courtesy
The agreements were signed at Beza's conference room in the capital’s Agargaon today (5 July). Photo: Courtesy
Speaking at the signing ceremony, Beza Executive Chairman Chowdhury Ashik Mahmud Bin Harun said the new investments by local industrial groups reflect growing investor confidence in the country's economic zones.

He added that Beza would continue providing the necessary support to ensure the swift establishment of industries and the commencement of production.