Russia wants to supply urea fertiliser to Bangladesh at a price $10 lower per tonne than that offered by other supplying countries to help meet domestic demand.

Russian Chargé d'Affaires in Bangladesh Vyacheslav Sentyurin made the proposal today at a meeting with Commerce Minister Khandakar Abdul Muktadir at the latter's office at the Secretariat in Dhaka.

The diplomat also said that Russia's JSC FEC Prodintorg wants to supply 280,000 tonnes of urea to Bangladesh through the Bangladesh Chemical Industries Corporation, according to a statement from the commerce ministry.

The implementation of the proposal may ensure a continued supply of the fertiliser at a lower price.

At the meeting, Russia also expressed interest in supplying sunflower oil, yellow beans, chickpeas, red lentils and green lentils to Bangladesh as part of efforts to strengthen food security.

Muktadir appreciated Russia's cooperation in ensuring the regular supply of wheat and muriate of potash to Bangladesh.

Every year, Bangladesh needs approximately 26 lakh to 27 lakh tonnes of urea, while the country has 6.2 lakh tonnes in stock as of July 23 this year, according to Agriculture Ministry data.

The country's capital market witnessed a strong bullish surge today (28 July) as the benchmark index reclaimed the psychological threshold of 5,900 points after a gap of two weeks.

Driven by a wave of bargain hunting and renewed investor confidence, market participation saw a significant spike, with daily turnover jumping by 45% to reach Tk1,261 crore. The broad DSEX index of the Dhaka Stock Exchange (DSE) rose by 60 points, or 1.03%, to settle the session at exactly 5,900.

According to the daily market review by EBL Securities, the capital market extended its upward trajectory for a second consecutive session. The rally was primarily fueled by a perceived pause in retaliatory actions in the Middle East conflict and high expectations of favourable sector-specific earnings during the ongoing disclosure season.

While the market opened with steady gains, broad-based buying interest gained significant traction after the mid-session as renewed accumulation in the majority of scrips propelled the benchmark higher, said EBL Securities.

Sheltech Brokerage Limited noted that the day's performance was largely shaped by sustained buying interest supported by latest quarterly earnings announcements from December-closing companies that surpassed market expectations.

Although the market traded within a narrow range during the early hours, momentum strengthened around the mid-session, lifting the DSEX to an intraday high of 5,909.79 points. Despite a bout of orderly profit-taking that emerged late in the day, the buying pressure remained sufficiently strong to absorb the sell-offs, allowing the index to retain the bulk of its gains, it added.

The blue-chip segment also mirrored the positive sentiment, with the DS30 index gaining 17 points to close at 2,219.

Market breadth was overwhelmingly positive, as 284 issues managed to advance compared to only 60 that declined, while 49 scrips remained unchanged on the DSE floor.

On the liquidity front, Dominage Steel emerged as the most traded stock, followed by Saiham Cotton, ITC, Sharp Industries, and Indo-Bangla Pharmaceuticals.

Individual stock performance was highlighted by FAS Finance and New Line Clothings, both of which hit the 10% upper circuit limit. Other top gainers included Argon Denims, Dominage Steel, and Acme Pesticides.

On the flip side, AIBL First Mutual Fund, Shyampur Sugar, and Zeal Bangla Sugar were among the few losers of the session.

The bullish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the Selective Categories' Index (CSCX) ended 78 points higher at 9,595 and the CASPI rose 134 points to reach 15,738. Notably, turnover at the port city bourse witnessed a massive 287% jump, settling at Tk64.48 crore.

S&P Global Ratings has revised Bangladesh's long-term sovereign credit outlook from stable to negative, citing persistent banking sector weaknesses, sticky inflation and uncertainty in global energy markets.Infrastructure project reports

The agency, however, affirmed Bangladesh's sovereign credit ratings at 'B+/B'.

S&P said the country's economic recovery faces mounting pressure as structural problems in the banking sector continue to weigh on private sector lending and growth.

It forecast Bangladesh's real GDP growth to average around 4.5 per cent over the next three years, significantly below the country's historical pace.

The rating agency also noted that Bangladesh's 10-year weighted average real per capita GDP growth had fallen to 3.3 per cent, from 5.8 per cent in 2022.

Despite the downgrade in outlook, S&P said the country's external position had improved.

Foreign exchange reserves recovered to $32.9 billion by the end of FY2026, supported by a 19 per cent rise in remittances, providing about 4.5 months of import cover.

However, it warned that volatile global energy prices, West Asia trade disruptions and weaker garment exports could put renewed pressure on the economy.

Readymade garment exports fell 2.6 per cent in the first 11 months of FY2026.

S&P also highlighted Bangladesh's low tax-to-GDP ratio and rising debt-servicing costs, saying interest payments now consume nearly 30 per cent of government revenue.

The agency said failure to strengthen growth and stabilise external debt could lead to a future credit rating downgrade.

Confidence Infrastructure plans to raise Tk300 crore through an initial public offering (IPO) to finance electric vehicle (EV) battery production, business expansion, debt repayment and investments in new sectors, including food.

The company has appointed UCB Investment Limited as issue manager for the proposed IPO. The two companies signed the issue management agreement on Tuesday at Confidence Infrastructure's corporate headquarters in Dhaka. The agreement was signed by Imran Karim, chairman of Confidence Infrastructure, and Tanzim Alamgir, managing director and chief executive officer of UCB Investment.

Speaking to The Business Standard, Karim said the group's affiliate, Confidence Batteries Limited, currently manufactures lead-acid batteries for the automotive, industrial, telecommunications, solar power and backup power sectors. The company now plans to enter EV battery manufacturing to meet growing domestic demand, reduce import dependence and build local capabilities in advanced battery production.

The company is targeting the electric motorcycle, three-wheeler, passenger car, bus and energy storage system markets. It also plans to invest part of the IPO proceeds in modern food production, processing and supply chains as part of its strategy to diversify into high-growth sectors.

Subject to regulatory approval, UCB Investment will provide due diligence, financial and legal reviews, prospectus preparation and other IPO advisory services.

According to company officials, the IPO proceeds will finance EV battery manufacturing, new infrastructure and energy projects, debt repayment and investments in the food business.

Confidence Infrastructure reported Tk3,606 crore in consolidated revenue and Tk275 crore in net profit for FY25, with earnings per share of Tk19.92. It has a paid-up capital of Tk138.12 crore and an authorised capital of Tk500 crore.

The company operates across infrastructure development, manufacturing, storage, electricity, power generation, telecommunications and paint production. Its planned expansion into EV batteries is aimed at strengthening its position in the clean energy and future mobility market.

Confidence Group already has a listed company – Confidence Cement PLC, which has been trading on the Dhaka Stock Exchange since 1995. The cement maker recently declared a 10% cash dividend for FY25, reported Tk97 crore in net profit and was trading at around Tk69.10 per share. If approved, Confidence Infrastructure will become the group's second listed company.

Capital market analysts say large industrial IPOs have become increasingly rare, limiting investment opportunities in fundamentally strong companies. They believe Confidence Infrastructure's listing would deepen the market, while its planned investment in EV battery manufacturing could strengthen future earnings and support Bangladesh's emerging electric vehicle supply chain.

The IPO is subject to approval by the Bangladesh Securities and Exchange Commission (BSEC), which will review the company's audited financial statements, due diligence reports, prospectus, asset valuation and proposed use of proceeds before granting approval.

Confidence Infrastructure PLC, a member of Confidence Group, has decided to enter the capital market through an Initial Public Offering (IPO), appointing UCB Investment as the issue manager for the proposed IPO.

The company has signed an issue management agreement with UCB Investment, one of the country’s leading merchant banks, to manage its proposed IPO.

The agreement was signed at the corporate office of Confidence Infrastructure in Dhaka. Tanzim Alamgir, Managing Director and CEO of UCB Investment Limited, and Imran Karim, Chairman of Confidence Infrastructure PLC, signed the agreement on behalf of their respective organisations, according to a press release.

Under the agreement, UCB Investment will provide comprehensive issue management and advisory services for Confidence Infrastructure’s proposed IPO.

Officials from both organisations expressed optimism that the partnership would help ensure successful execution of the IPO and support the company’s long-term growth and expansion plans.

Senior officials from UCB Investment Limited and Confidence Infrastructure PLC were present at the signing ceremony.

Ship traffic through Bab el-Mandeb fell on Sunday after Yemeni Houthis attacked Saudi oil installations along the Red Sea coast, while transit through the Strait of Hormuz stayed low over the weekend, shipping data from Kpler showed on Monday.

Eleven commodity vessels passed through the Bab el-Mandeb strait on Sunday, the lowest level in months, the data showed.
Red Sea traffic has been disrupted off the coast of Yemen since last week by the Tehran-aligned Houthis, who want to blockade Saudi exports, expanding the US-Iran conflict that has already choked oil supply through the Strait of Hormuz.The shipping disruption caused prices of physical crude cargoes in the Middle East, Europe and Africa to jump to two-month highs last week.Seven of the vessels that passed through Bab el-Mandeb were oil tankers with three of them entering the Red Sea.

Two of them are very large crude carriers (VLCCs) heading to the port of Yanbu to load Saudi crude while the third is a Russian-linked ship, the data showed.

The four vessels that exited the Red Sea on Sunday included the Hong Kong-flagged VLCC New Explorer carrying 2 million barrels of Saudi and Emirati crude for eastern China's Ningbo port, a tanker carrying 1 million barrels of Russian crude for China and a tanker with about 750,000 barrels of Saudi crude onboard for Pakistan, the data showed.

Another Hong Kong-flagged VLCC New Pearl carrying 2 million barrels of Saudi crude is exiting the Red Sea via Bab el-Mandeb strait for eastern China's Zhoushan port, the fourth Chinese supertanker to leave since the Houthis declared a naval blockade.

Associated Maritime Hong Kong, the manager for New Explorer and New Pearl, did not immediately respond to a request for comment outside office hours.

Houthi military spokesperson Yahya Saree said the group struck sites belonging to Saudi state oil company Aramco in the cities of Jizan and Yanbu on Saturday.

Fewer than 10 commodity vessels passed through the Strait of Hormuz daily over the weekend even though the US and Iran have paused strikes in the Middle East, shipping data from Kpler showed.

Seven vessels transited on Sunday including three Iranian-linked oil products tankers that exited the Strait, the data showed.

On Saturday, there were only three vessels that passed through with their transponders switched off.

These include a VLCC heading to Qatar to load oil, a liquefied petroleum gas tanker going to the Ruwais port in the United Arab Emirates to load a cargo and a tanker carrying Qatari naphtha that was heading to Japan, the data showed.

On Friday, seven vessels passed, mostly exiting the Gulf, including two VLCCs carrying crude from Iraq and the UAE and a tanker carrying fuel oil.

The Dhaka Stock Exchange (DSE) has expanded its electronic subscription system (ESS) by introducing a new "Private Investor (PI)" category, allowing general investors to participate in the primary subscription of various financial instruments.

Previously, the ESS platform was restricted to eligible investors and qualified investors. With the addition of the PI category, individual retail investors, registered institutions, and funds can now invest in privately offered bonds, open-end mutual funds, exchange-traded funds, and equity approved by regulatory authorities.

The premier bourse shared this development during an awareness workshop conducted via the Zoom platform today (27 July). Representatives from merchant banks, asset management companies, and brokerage houses participated in the session.

According to the Dhaka Stock officials, any individual or registered institution can sign up under the PI category. For individual investors, only a national identification card and a valid bank account are required. For institutions or funds, a registration certificate and bank account are mandatory. Notably, the DSE has waived any registration fees for those enrolling as private investors.

During the workshop, speakers highlighted the registration and subscription processes, data requirements, and the technical aspects of using the digital platform.

They noted that this initiative will significantly expand alternative investment opportunities for general investors beyond traditional equity. It is also expected to play a crucial role in building a transparent, digital investment environment while paving the way for a more diversified range of financial products in the country's capital market.

The country's premier bourse returned to positive territory today (27 July), snapping a three-day corrective spell as bargain hunters moved in to scoop up attractively valued shares.

The benchmark DSEX index of the Dhaka Stock Exchange (DSE) jumped 55 points, or 0.95%, to settle at 5,839. This rally not only ended the recent losing streak but also pushed the total market capitalisation back to the psychological milestone of Tk7 lakh crore, adding approximately Tk3,000 crore in a single day.

Market participation showed a healthy uptick, with daily turnover rising by 12% to reach Tk872 crore.

According to EBL Securities' daily market review, the recovery was driven by renewed buying as investors responded positively to a brief pause in retaliatory actions linked to the Middle East conflict.

Moreover, anticipation surrounding favourable financial results for the ongoing earnings season encouraged broad-based accumulation, providing a much-needed respite to investor sentiment.

While the market maintained a strong upward trajectory, analysts noted that persistent nationwide gas supply disruptions and lingering anxiety over proposed amendments to margin lending rules kept some investors in a cautious "wait-and-see" mode.

Sheltech Brokerage Limited observed that the day's performance was characterised by strong buying momentum from the opening bell, which lifted the benchmark index to an intraday high of 5,851 points.

Although the market briefly consolidated in the middle of the session as investors booked profits, buying resumed during the final hour of trading, allowing the market to finish firmly in positive territory. Investors are now focusing on the finalisation of regulatory reforms and remaining Q4 earnings to gauge whether this recovery can last.

The market closed with broad-based gains, with 299 issues advancing, 53 declining and 39 remaining unchanged. The blue-chip DS30 index also gained 15 points to close at 2,201.

On the sectoral front, textiles accounted for the largest share of turnover at 22.8%, followed by pharmaceuticals at 12.4% and engineering at 11.1%.

In terms of returns, the jute and mutual fund sectors led the gainers, both posting a 3.3% increase, while the travel and leisure segment gained 2.4%.

Individual stock performance featured several "junk" and small-cap stocks at the top of the gainers' list. Ring Shine Textile hit the 10% upper circuit breaker, followed closely by Deshbandhu Polymer, Far Chemical, and New Line Clothings.

On the flip side, Nurani Dyeing emerged as the top loser, shedding 3.22%, followed by Queen South Textile and Yeakin Polymer. Heavyweight Beximco also saw a marginal price dip of 1.70%.

The positive sentiment was also reflected on the Chittagong Stock Exchange, where the broad CASPI index climbed 125 points to close at 15,604. Notably, the port city bourse witnessed a dramatic 223% surge in trading activity, with turnover reaching Tk16.66 crore.

Foreign and local investors may soon say goodbye to years of red tape as the government moves to supercharge its BanglaBiz portal with a Tk661.50 crore project designed to deliver hassle-free, fast-track approvals from a single-entry point.

Under the plan, the government will integrate all major investment agencies, including Bangladesh Investment Development Authority (Bida), Bangladesh Economic Zones Authority (Beza), Bangladesh Export Processing Zones Authority (Bepza), Bangladesh Small and Cottage Industries Corporation (BSCIC), and Bangladesh Hi-Tech Park Authority, into a unified platform.

Awaiting final approval from the Prime Minister's Office, the initiative aims to bring all investor-related services under a single digital umbrella by 2030, streamlining everything from initial business registration to final clearances.

Nahian Rahman Rochi, executive member and head of business development at Bida, said the second phase will bring a wider range of facilities for investors and integrate a significantly larger number of government services into the BanglaBiz platform.

He told TBS that the BanglaBiz project has already been included in the Annual Development Programme Green Page. The Development Project Proposal has been submitted and is currently awaiting approval from the Prime Minister's Office.

Designed to evolve continuously

The finance minister in his budget speech said, "BanglaBiz has been launched as a single digital platform for uninterrupted business approval services, aimed at providing investors with faster, predictable, coordinated and transparent government services."

Bida officials said a project scrutiny committee held a meeting last month to finalise the proposal titled "BanglaBiz Portal: Single Entry Point for Investment Services". An inter-ministerial committee is currently assessing the technical and financial feasibility.

According to Bida officials, the plan is to integrate the most critical and frequently used investment and business services into BanglaBiz over the next nine to 12 months.

The remaining services will be added in phases, depending on the digital readiness of relevant government agencies and progress in inter-agency service integration, they said.

The government aims to digitise all investment-related services through the portal by 2030.

Full implementation by 2030

The project's original master plan set 2030 as the target for the full implementation. However, the platform is designed to evolve continuously, with new services and features to be added in line with user demand, business needs and technological advancements.

According to Bida officials, Phase 1 of BanglaBiz was launched in February this year with the introduction of the Business Starter Pack, which allows entrepreneurs to access the essential services needed to start a business through a single-entry application process.

The second phase will expand the platform with Single Sign-On functionality, more comprehensive Know Your Approvals service, and integration of a wider range of government services and approvals.

With technical support from the Bangladesh University of Engineering and Technology (Buet), the project will also ensure the platform's sustainability, strengthen its backend and cloud infrastructure, and establish provisions for future upgrades and scalability.

Registrations, approvals 3 days

Officials said the goal is to enable businesses to complete all required initial registrations and approvals within three working days, allowing them to begin operations much sooner.

Jibon Krishna Saha Roy, director general at Bida, said all investment-related services in Bangladesh will be available through BanglaBiz By 2030.

"We call it the Bangladesh Investment Portal. We have already started the first phase. Once the transition is complete, there will no longer be separate portals – only BanglaBiz," he said.

Unique Business ID

Officials said that as part of its long-term roadmap, the government also plans to introduce a Unique Business ID (UBID) for every enterprise. The identifier will enable authorities to track a business throughout its lifecycle – from establishment and operation to expansion.

Officials believe the UBID would significantly reduce the need for businesses to repeatedly submit the same information and documents to different government offices.

The recently enacted Invest Bangladesh Act also incorporates the concept of a Single Landing Platform, providing the legal and regulatory foundation to establish BanglaBiz as a permanent component of the country's investment and business service infrastructure.

'Full implementation needed for success'

Business leaders have welcomed the initiative, saying it could remove one of the biggest obstacles to investment in Bangladesh. They said investors currently wait two to three years to obtain all the licences and approvals needed to start a business.

If applications can be submitted through a single platform and approvals issued online within a much shorter timeframe, it would reduce frustration, curb corruption and bureaucratic harassment, and encourage both local and foreign investment.

Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The Business Standard that the initiative to launch BanglaBiz is a positive step towards ensuring hassle-free and timely services for investors.

"If implemented effectively, BanglaBiz will make investing much easier," he said. "However, previous initiatives aimed at improving the investment climate ultimately failed to deliver their intended benefits because they were not fully implemented. The government must ensure BanglaBiz does not face similar obstacles," he added.

Government agencies exposed their weakest capacity in implementing development programme as an unprecedented slowdown in public spending left over Tk 1.0 trillion unspent until penultimate month of last fiscal year, squeezing Bangladesh's economic growth, analysts say.

Although the government agencies recovered from bleak Annual Development Programme (ADP)-execution performance four years ago, their capacity kept plunging year on year ever since, they have noted.

Economists say the poor development-work performance in recent years has already hit Bangladesh's economic growth which declined to only around 4.0 per cent over the years.

The sharp drop in planned spending has not only dragged down overall economic momentum but also negatively impacts business activity, public-service delivery, and job creation, they add.

Planning Commission officials have said when the Annual Development Programme is prepared, almost all the ministries and agencies demand higher funds but after providing allocation, they cannot spend as much when the year ends.

"For example, we had allocated Tk 2.38 trillion in the last fiscal year (2025-26) for all the government ministries and agencies under the ADP, but we were forced to cut the outlay to Tk 2.09 trillion after eight months in February 2026," says one official.

Yet, he adds, the ministries and agencies had spent less than half (48 per cent) of the Tk 2.09-trillion allocation under the last year's ADP, keeping Tk 1.08 trillion or 52 per cent unspent in 11 months between July 2025 and May 2026.

Although the Implementation Monitoring and Evaluation Division (IMED) under the Planning Commission has yet to release the official final report for June, the execution trends show an average monthly expenditure of roughly Tk 80 billion.

Although the government ministries and agencies spent 92.74 per cent of the Tk 2.19-trillion ADP allocations in FY2022, the rate started declining to 85.17 per cent in FY2023, 80.63 per cent in FY2024 and 68.18 per cent in FY2025, IMED data showed.

According to the latest statistics from Bangladesh Bureau of Statistics (BBS), the gross domestic product (GDP) growth contracted for two consecutive quarters, dipping to 3.03 per cent in the second quarter (October-December) and further slowing to 2.22 per cent in the third quarter (January-March) at constant prices in the last FY.

Over the last three consecutive years, Bangladesh's economic growth was recorded at 4.22 per cent in FY2024, which declined further to 3.49 per cent in FY2025 and 4.14 per cent in FY2026, the BBS data showed.

The industrial sector hit a notable slump, recording a negative growth rate of 0.28 per cent that is not noticed in recent years, while agricultural growth eased to 1.74 per cent and the services sector slowed to 3.52 per cent.

Planning Commission and IMED officials have identified several reasons for growth deceleration that include lack of capacity and efficiency of the public agencies, government's austerity stance, massive inefficiency in public procurement, bureaucratic tangles or and startup delays, and amendment of the procurement law.

The amended Public Procurement Act (PPA) bill, passed parliament on April 9, transitioning procurement entirely to the electronic Government Procurement (e-GP) platform.

Besides, the national elections in February created operational inertia following subsequent political shifts like missing or fleeing of many Project Directors (PDs) which forced the authorities to appoint new leadership and delayed execution, the IMED and PC officials said.

The interim government paused, scrapped, or downsized allocations for numerous projects while adjusting development priorities.

"Persistent skills shortages and institutional inefficiencies" continued to hamper timely project completion, they added.

Policy Exchange Bangladesh Chairman Dr Masrur Reaz says leaving such huge development funds idle, it is not possible to develop a country as well as its economy.

"When a significant amount of ADP development funds remains unspent, it generates a multidimensional shock across the economy," the economist told The Financial Express.

Unexecuted projects fail to generate essential public services and infrastructure needed to spur private investment as well as employment, he added.

"The government should establish its own functional monitoring and evaluation cell to track project progress in real time," he has suggested.

The government has outlined an ambitious roadmap to generate nearly Tk 1.0 trillion in additional Value-Added Tax (VAT) revenue in the fiscal year 2026-27, with a strong focus on narrowing compliance gaps, curbing tax evasion, and leveraging economic growth.

According to official projections, the largest share of the additional revenue is expected to come from reducing the VAT compliance gap.

The National Board of Revenue (NBR) plans to bring around 10,000 high-risk businesses under intensified scrutiny, targeting an additional Tk 380 billion in VAT collection through enhanced compliance and enforcement measures.

The strategy was unveiled at an NBR meeting on Monday, attended by Prime Minister's Adviser Dr Rashid Al Mahmud Titumir as the chief guest.

NBR Chairman Ahsan Habib presided over the meeting, which was organised to present the VAT Wing's revenue mobilisation strategy for the current fiscal year.

NBR Member (VAT Implementation and IT) Syed Musfequr Rahman presented a detailed plan for achieving the VAT Wing's revenue target of Tk 2.57 trillion.

According to the plan, around 8,000 businesses identified as having significant compliance gaps or a high risk of VAT evasion will be brought under closer monitoring.

The NBR expects to recover an additional Tk 250 billion by detecting and preventing VAT evasion among these firms.

In a separate initiative, the VAT authority plans to scrutinise 2,000 large taxpayers that pay more than Tk 10 million in annual VAT.

This programme is expected to generate an additional Tk 100 billion beyond their regular VAT payments.

Together, the two enforcement drives are projected to yield Tk 350 billion in additional VAT revenue.

Other compliance measures are expected to contribute another Tk 30 billion, bringing the total additional VAT collection target from compliance efforts to Tk 380 billion.

According to NBR officials, the businesses will be selected from among VAT-registered entities with monthly transactions exceeding Tk 1 million.

The list is expected to include importers, real estate companies, manufacturers, firms engaged in local sales and supplies, e-commerce businesses, and other VAT-registered entities.

A senior NBR official who attended the meeting said a large number of VAT-registered businesses were found to have significant compliance gaps.

"We have analysed VAT-registered businesses and found that a large segment has substantial compliance deficiencies. If these gaps can be reduced, a significant amount of additional VAT can be collected," the official said, requesting anonymity.

The official identified the real estate sector as one of the key focus areas, noting that improved detection of discrepancies in property transactions could substantially boost VAT revenue.

He said the NBR had already detected around Tk 7.0 billion in unpaid VAT from a leading real estate company.

"We have already launched specialised enforcement activities. A dedicated team of officials has been assigned to detect VAT evasion in the real estate sector," he added.

The government's broader VAT revenue strategy includes several other major sources of additional revenue.

The tobacco sector is expected to contribute an extra Tk 120 billion from the bidi and cigarette industry.

The NBR also projects that a 10 per cent expansion in economic activity will automatically generate around Tk 200 billion in additional VAT revenue.

Another Tk 150 billion is expected to come from improved implementation of the Annual Development Programme (ADP) as higher public expenditure and development spending are anticipated to stimulate economic transactions and VAT collection.

To recover outstanding dues, the government has set a target of Tk 140 billion from arrears collection.

Of this amount, Tk 70 billion is expected to come from reducing interest calculation periods, while the remaining Tk 70 billion will be recovered from other outstanding VAT arrears.

Taken together, the measures are projected to generate nearly Tk 990 billion in additional VAT revenue, reflecting a multi-pronged strategy combining stronger tax administration, enhanced compliance enforcement, improved arrears recovery, and economic growth.

The government has set an ambitious revenue collection target of Tk 6.04 trillion for the NBR in FY27, about 47 per cent higher than the previous fiscal year's target, marking the largest annual increase since Bangladesh's independence.

Of the total, the VAT Wing has been assigned approximately 45 per cent higher than the previous year's target.

Industries that have already invested heavily and have been awaiting gas connections for some time to start production now take yet another blow: the government has frozen all new industrial gas approvals amid a worsening supply crunch.

With domestic gas output falling and LNG import infrastructure stretched to its limit, state distribution companies have been instructed to halt all fresh connections and load upgrades; the Energy and Mineral Resources Division (EMRD) formally communicated the decision to Petrobangla in a letter issued on 14 July.

Addressing Petrobangla's chairman, the EMRD said, "Due to the continued decline in production from domestic gas fields and the country's dependence on only two floating LNG import terminals (FSRUs), the government has decided not to approve any new gas connections at this moment for any company."

The letter said 1,857 applications for new gas connections remain pending with the country's gas distribution companies.

On 17 July, Petrobangla issued identical directives to Titas Gas, Bakhrabad Gas Distribution Company, Jalalabad Gas Transmission and Distribution System, Karnaphuli Gas Distribution Company, Paschimanchal Gas Company and Sundarban Gas Company, instructing them to suspend approval of new gas connections and load enhancements.

Pending applications in limbo
Monir Hossain Chowdhury, joint secretary (Operations) at the Energy Division, told The Business Standard that businesses continue to apply for new gas connections and load enhancements, but approvals are impossible under the current demand-supply situation.

Asked about the 1,857 pending applications, Monir said the boards of the six gas distribution companies had approved them during the Sheikh Hasina administration without assessing actual gas availability.

"Investors were given hope without considering the supply situation. We have prioritised those applications so gas can be supplied once the country's supply improves," he said.

Petrobangla Chairman Md Abdul Mannan said the restriction applies to all businesses seeking new gas connections or additional gas load.

"Given the country's persistent gas crisis, it will not be possible to approve new applications for either new gas connections or load enhancement," he said.

Petrobangla currently supplies 2,500-2,600 million cubic feet per day (mmcfd) against demand of around 3,800 mmcfd. Of the total, 800-900 mmcfd comes from the country's two floating LNG terminals, depending on weather, with the remainder coming from domestic gas fields.

Factories wait, investment stalls
Business leaders say the decision has stranded billions of taka in industrial investment.

Mustafa Haider, director of TK Group, said two of the company's new factories remain idle because they have yet to receive gas connections.

He said entrepreneurs with billions of dollars tied up in factories awaiting gas are struggling to service bank loans while plants sit idle. Continued suspension of new connections, he warned, would discourage fresh investment and undermine the government's employment objectives.

Khondoker Ahadduzzaman, company secretary of Global Heavy Chemicals Ltd, said the gas crisis has forced the company to slash production of import-substitute products – including caustic soda, hydrochloric acid, bleaching powder, chlorine, sodium hypochlorite and chlorinated paraffin wax – by 85%.

"The limited production we are maintaining with electricity is not enough to cover operating costs, resulting in continuous financial losses," he said.

Bangladesh is facing major macroeconomic challenges after years of mismanagement. In many cases, these problems have reached a point where major reforms are needed to avert an economic meltdown. One such challenge is the energy sector, where long-standing mismanagement has been compounded by the ongoing US-Iran war. The problems in the energy sector now extend far beyond the sector itself. They have become a threat to macroeconomic stability and can no longer be treated as matters for the Ministry of Power, Energy and Mineral Resources alone. The Ministry of Finance and the Bangladesh Bank must integrate energy sector concerns into the broader macroeconomic framework and coordinate policymaking accordingly.

The spillover effects of the energy crisis on the wider economy are evident from several facts.

First, the energy import bill has risen over the past five years, increasing from $4.3 billion in FY2021 to $11.2 billion in FY2026 because of growing shortages in domestic energy supplies and higher global prices. This pace of growth is unsustainable and could trigger a balance of payments (BoP) crisis.

Second, the energy subsidy bill surged from Tk 142 billion, or 0.4 percent of GDP, in FY2021 to Tk 837 billion, or 1.5 percent of GDP, in FY2025. By comparison, the tax-to-GDP ratio stood at only 6.8 percent in FY2025, meaning energy subsidies alone absorbed around 22 percent of total tax revenue. Such a subsidy burden is clearly unsustainable. Although recent price adjustments have reduced subsidy requirements, rising global energy prices threaten to offset those gains.

Third, energy shortages and higher prices have weakened export competitiveness, disrupted manufacturing and transport services, and contributed to slower GDP growth, weaker export performance and lower private investment. The resulting economic slowdown has also been a major factor behind rising non-performing loans (NPLs) in the banking sector.

The factors behind the current state of the energy sector are numerous and long-standing. They include the dominant role of the public sector in energy production and distribution, poorly managed state-owned energy entities, weak pricing policies, the absence of a credible primary energy strategy, the lack of hard budget constraints, political interference and corruption in energy investment and procurement, particularly in awarding contracts to independent power producers (IPPs), and weak accountability.

Continuing with the crisis management and muddling-through approach of the past is not a sustainable policy option. Instead, the new government has an opportunity to undertake bold reforms that can restructure the energy sector for sustained progress. The challenge is to overhaul the sector rather than make marginal adjustments.

The core reforms should include: (i) deregulating the energy sector to encourage greater private sector participation across the value chain; (ii) corporatising all public energy entities; (iii) renegotiating IPP contracts; (iv) depoliticising energy pricing; (v) imposing hard budget constraints on all public enterprises, including energy entities; and (vi) developing a comprehensive and credible primary energy strategy.

Deregulate the energy sector

Since independence, the energy sector has remained heavily regulated, with the public sector dominating most stages of energy production and distribution. Although private participation has gradually expanded, particularly in electricity generation, the sector continues to be dominated by state-owned enterprises.

While this model may have served the country’s needs in the early years after independence, today’s economy is very different. Bangladesh now has a much stronger private sector operating in an increasingly sophisticated global economy. There is therefore an urgent need to open every stage of the energy value chain to private investment, from oil and gas exploration to imports, refining, distribution, electricity generation and power distribution.

Public sector dominance has reduced efficiency, raised costs, constrained investment and created opportunities for corruption. A vibrant private energy sector operating within a sound regulatory framework, as seen in many upper-middle-income and high-income countries, would improve efficiency, lower costs, attract investment and significantly reduce the need for energy subsidies. The government’s primary role should be to establish an effective regulatory framework while using taxation and subsidies to protect the public interest.

This is the single most important reform needed to put the energy sector on a sustainable footing.

Reform corporate governance in public energy entities

The transition from a state-dominated energy sector to one led mainly by private suppliers will take time. In the meantime, public energy enterprises need urgent governance reforms to improve accountability, efficiency and financial performance.

These reforms should include full corporatisation under professional management, operational independence from government, greater autonomy over procurement, investment, production, sales and employment decisions, and the introduction of hard budget constraints supported by a transparent subsidy policy based on clearly defined social objectives.

Separating government from day-to-day management and investment decisions is essential if corruption is to be reduced.

Renegotiate IPP contracts

Independent power producers have played a vital role in easing electricity shortages and supporting GDP and export growth. However, a combination of overly optimistic demand projections and political interference in contract awards has created severe financial pressures because of excess generation capacity and generous take-or-pay agreements.

The financial position of the power sector is no longer sustainable. IPP contracts should therefore be renegotiated on commercial terms, free from political influence.

Depoliticise energy pricing

Government control over energy pricing has contributed significantly to the weak financial position of energy entities, especially in the power sector, because prices have often been determined by political rather than commercial considerations.

Although Bangladesh has established regulatory commissions for electricity and primary energy, government influence over pricing remains substantial in practice.

A genuinely competitive private energy market will emerge only when pricing decisions are made by an independent regulator applying commercial principles, including production costs and a reasonable return on investment. Such reforms would also strengthen the finances of public energy enterprises. The government could still pursue social or political objectives through taxation and targeted subsidies.

Develop a comprehensive primary energy strategy

The absence of a coherent primary energy strategy has been a major weakness of the sector. In an increasingly interconnected global energy market, where Bangladesh depends heavily on imports, a flexible and forward-looking strategy is essential.

The current approach has been undermined by unreliable estimates of domestic gas reserves, weak policies to develop domestic energy sources, including renewables, inadequate trade policies for imported energy, and limited private investment in energy exploration. The result has been excessive dependence on expensive imported fossil fuels and growing vulnerability to disruptions in LNG supplies.

One of the government’s highest priorities should be to establish an expert group to prepare a comprehensive primary energy strategy. This should explore all potential domestic energy sources and the policies needed to develop them, formulate a trade strategy for energy imports built around strategic partnerships with exporting countries, examine opportunities for regional energy cooperation with a particular focus on hydropower, and identify ways to attract private investment, including joint ventures with foreign investors, in primary energy exploration.

The government is likely to announce the ninth national pay scale for government employees after concluding negotiations with the International Monetary Fund on a new loan programme in October although the decision will depend largely on the lender's approval, officials familiar with the matter said.

The IMF has already advised the government to defer implementing the new pay scale by at least two years, citing fiscal pressures and weak revenue mobilisation. Following the recommendation, the government has adopted a more cautious approach to this end.

On 26 July, Prime Minister Tarique Rahman met Finance Ministry officials to review revenue collection, public expenditure, the fiscal impact of the proposed pay scale and the overall macroeconomic outlook.

During the meeting, Finance Minister Amir Khosru Mahmud Chowdhury outlined the additional expenditure required to implement the salary structure. The premier instructed officials to conduct a more detailed review, particularly considering the risk of higher global energy prices, pressure on domestic gas supplies and broader economic uncertainty.

Officials said the government's final negotiations with the IMF are expected to take place on the sidelines of the World Bank-IMF Annual Meetings in Bangkok from 12 to 18 October.

According to officials, the IMF's position on increasing permanent non-development expenditure, particularly public sector salaries, will be a key factor in determining whether the pay scale moves forward.

A senior Finance Ministry official said an IMF delegation visiting Bangladesh from 12 to 16 July discussed salary and allowance budgeting with the Finance Division. IMF representatives reportedly said Bangladesh's current revenue base is not strong enough to support a significant increase in government salaries.

The lender also noted that government spending on social safety net programmes, including Family Cards, Farmer Cards and subsidies, is rising rapidly while revenue growth has lagged behind. Given persistent inflation and limited fiscal space, the IMF believes introducing the new pay scale now could create additional financial risks.

Officials, however, said the government has not abandoned the proposal.

A 10-member high-level committee led by Cabinet Secretary Nasimul Ghani has already prepared a revised framework for the pay scale after reviewing recommendations from the National Pay Commission 2025, the Bangladesh Judicial Service Pay Commission 2025 and the Armed Forces Pay Committee 2025.

The proposal, with some revisions, has been submitted to the Finance Ministry and presented to the prime minister.

A senior official, requesting anonymity, said the government is now considering phased implementation or alternative approaches to reduce the fiscal burden. The strategy is expected to be finalised before the October IMF meeting.

The process to revise the salaries began under the interim government, which formed the National Pay Commission 2025, led by former Finance Secretary Zakir Ahmed Khan. The commission submitted its report on 22 January this year, recommending salary and allowance increases of 100% to 140%.

It proposed raising the minimum basic salary from Tk8,250 to Tk20,000 and the maximum from Tk78,000 to Tk160,000, alongside increasing the Baishakhi allowance from 20% to 50%, revising transport allowances for grades 10 to 20 and restructuring other benefits.

The commission estimated the recommendations would require an additional Tk106,000 crore annually.

In the FY27 budget speech, the finance minister announced plans to implement the new pay structure in phases from July and allocated Tk54,572 crore more for the public administration sector than in the revised budget.

According to officials, around Tk44,000 crore of the additional allocation has been earmarked for the potential implementation of the new pay scale for government employees, MPO-listed teachers and pensioners.

Economists say a new pay scale is overdue, noting that government employees have not received a salary revision since 2015 while high inflation has significantly eroded their purchasing power.

However, they also warn that Bangladesh's tax-to-GDP ratio remains low and revenue mobilisation has yet to improve sufficiently.

Researchers at the Centre for Policy Dialogue have cautioned that implementing the new pay scale without strengthening revenue collection could force the government to rely more heavily on domestic and foreign borrowing, widening the budget deficit and adding pressure on the economy.

The US has rolled out a fresh 10 percent duty on all imports from Bangladesh under Section 301 of the Trade Act of 1974, replacing a temporary global tariff. The new 10 percent tariff will make the total duty on the country's garment shipments to the USA at 25.62 percent that includes the existing 15.62 percent Most-Favoured-Nation (MFN) tariff rate.

The rate is just replacement of previous universal rate at 10 percent to another name failure to impose prohibition on import of goods produced using the forced labour.
The tariff was announced by the Office of the United States Trade Representative (USTR) on July 23 and took effect on July 24.
Why forced labour?

Following the nullification of reciprocal tariffs by the US Supreme Court from the Agreement on Reciprocal Tariffs (ART), the Trump administration was looking for the opportunity to impose higher tariffs on the imported goods.

US again imposes 10% tariff on Bangladesh
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US again imposes 10% tariff on Bangladesh

So in March, the USTR has launched an investigation on 60 economies including Bangladesh globally under Section 301 to determine whether they failed to block imports made with forced labour. Bangladesh was found to have a “partial enforcement framework”, placing it in the lower of two tariff bands ranging from 10 percent to 12.5 percent.
A shifting tariff landscape

This is the third tariff regime Bangladeshi exporters have faced only in two years. Exporters faced a 15.62 percent base rate before reciprocal tariffs were imposed under a national emergencies law in April 2025. After the US Supreme Court struck down that regime in February this year, a temporary 10 percent global tariff under Section 122 filled the gap until its 150-day legal limit expired on July 24, replaced immediately by the Section 301 tariff.
Official and exporter reactions

Government officials and trade leaders view the measure as a continuation. Commerce Minister Khandaker Abdul Muktadir said the measures would not create any new impact as the tariff rate remains unchanged.

Faisal Samad, director of Bangladesh Garment Manufacturers and Exporters Association, echoed the view, adding it will not impact exports.

US tariffs to have no fresh impact on Bangladesh: Commerce minister
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US tariffs to have no fresh impact on Bangladesh: Commerce minister

Meanwhile, the Ministry of Foreign Affairs (MoFA) said Bangladesh retains its competitive standing as key apparel-exporting rivals face a higher 12.5 percent duty.

"This distinct differential reinforces Bangladesh's ongoing comparative advantage in the US market relative to its high-tariff competitors," MoFA said.

It added that the USTR is considering a three-year Tariff-Rate Quota (TRQ) for Bangladesh, Cambodia, Indonesia and Malaysia to waive Section 301 tariffs on goods made from US cotton and textile inputs.
The bilateral deal complication

The interim government signed a US-Bangladesh Agreement on Reciprocal Trade (ART) on February 9 this year, setting a 19 percent rate in exchange for market opening. Because ART rested on the struck-down emergency-powers structure, the government is seeking formal clarification on whether the 19 percent rate applies or is superseded by Section 301.
Where Bangladesh stands against rivals

Dhaka retains its competitive standing in apparel exports, being among 17 of 86 countries placed in the lower 10 percent tier. Competitors China, Vietnam, and Thailand face the maximum 12.5 percent rate, reinforcing Bangladesh's ongoing comparative advantage, the foreign ministry noted.

Bangladesh possesses the basics but needs some radical reforms to raise annual foreign direct investment (FDI) inflows to US$15 billion, investors and economists say and show the must-dos to that end.
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In a joint study conducted by the Foreign Investors' Chamber of Commerce and Industry (FICCI) and Policy Exchange Bangladesh, it pointed out that Bangladesh's traditional growth model -- driven largely by a trio of ready-made garment industry, remittances and agriculture -- is facing mounting pressure from weak private investment, limited export diversification, persistent trade imbalances and inadequate job creation.

As such, netting FDI is "indispensable" for sustaining the country's next phase of economic transformation.

The study notes that although Bangladesh possesses a large domestic market, a youthful workforce and a strategic geographic location, it continues to lag well behind regional competitors in attracting foreign investment for a gamut of disservices.

What stand in the way, as per the study findings, a regulatory uncertainty, infrastructure and logistics bottlenecks, financial-sector weaknesses, skills shortages, tax complexity, and a fragmented institutional coordination.

It has noted that Bangladesh attracted a net FDI inflow of only US$1.78 billion in 2025, while fresh foreign equity fell to around US$550 million.

At 0.29 per cent of GDP, Bangladesh's FDI-to-GDP ratio remains lowest among comparable regional economies and far below Vietnam's 4.23 per cent, with annual inflows stagnating between US$1.2 billion and US$1.7 billion after peaking at US$3.89 billion in FY2019.

According to the study, the spinoffs from greater FDI are that it can mobilise capital and technology, diversify products and export markets, integrate Bangladesh into global value chains, stimulate domestic private investment, generate quality employment, modernise infrastructure and strengthen macroeconomic stability.

The report bears an 11-point reform agenda, including establishing a high-level national FDI coordination council, introducing a dedicated government investment-reform team, adopting National Investment Policy and omnibus investment law, implementing a three-year FDI promotion strategy, strengthening global investment branding and guaranteeing long-term policy stability.

The report was presented at a FICCI event titled 'Driving Foreign Investment for Jobs and Prosperity in Bangladesh', where ministers, advisers, economists and business leaders discussed reforms required to improve the country's investment climate and accelerate private-sector-led growth.

The keynote presentation was delivered by Dr M Masrur Reaz, Chairman and Chief Executive Officer of Policy Exchange Bangladesh, while senior government policymakers participated in a ministerial panel outlining the government's investment agenda.

Economists, academicians, policymakers and foreign investors have also argued that Bangladesh stands at a critical moment as multinational companies diversify production networks away from concentrated supply chains, stressing that success will depend on coordinated implementation rather than isolated policy announcements.

An emphasis was on attracting "higher-quality investment into advanced manufacturing, electronics, pharmaceuticals, renewable energy, digital services, logistics, healthcare and technology-intensive industries as essential conditions for creating productive jobs and achieving the country's ambition of becoming a trillion-dollar economy".

Improving investor confidence through predictable policies, efficient institutions, better infrastructure and sustained public-private dialogue would determine whether Bangladesh can convert its economic potential into significantly higher investment inflows.

Presenting the keynote, Dr Masrur Reaz said Bangladesh's gradual economic liberalisation since the late 1970s had enabled significant private-sector-led growth, but FDI inflows remained relatively low and volatile despite the country's progress.

"Recent recovery in FDI had been driven more by reinvestment by existing investors than by new foreign entrants."

Drawing on international experience, he said FDI had transformed economies by converting capital into exports, high-quality employment and technology transfer.

He cited Vietnam's export-led industrialisation, Costa Rica's electronics cluster, Malaysia's semiconductor industry, Thailand's automobile sector and Indonesia's electric vehicle battery industry as examples of how strategic foreign investment reshaped national economies.

Dr Reaz argued that Bangladesh's existing growth model faced four structural constraints -- macroeconomic pressures, weakening private investment, a complex business environment and sluggish employment generation.

Private investment has fallen to 21.5 per cent of GDP, its lowest level in 12 years, while exports remain concentrated in ready-made garments for more than 13 years. Youth unemployment stands at 9.4 per cent and the country ranks 128th out of 132 economies in the Economic Complexity Index.

He said Bangladesh requires around an additional US$8 billion in annual FDI merely to increase GDP growth by one-percentage point and argued that the country must strategically position itself to benefit from changing global trade patterns.

The study also highlights Bangladesh's competitiveness gap, pointing to weaknesses in logistics, trade facilitation, regulatory quality, innovation capacity, skills development and sovereign credit ratings compared with competing investment destinations.

In his welcome address, FICCI President Tapan Chowdhury said Bangladesh's economy had expanded from about US$8.9 billion in 1970 to nearly half a trillion dollars today, while merchandise exports had grown to US$48 billion in FY2025-26, driven mainly by the garment industry.

He said the private sector now accounts for around 76 per cent of total investment in Bangladesh, while foreign investors have played a crucial role in industrialisation, employment generation, export expansion, technology transfer and management development.

According to him, FICCI's more than 200 member-companies from 35 countries operating across 22 sectors currently support around 2.2 million direct and indirect jobs and contribute approximately 30 per cent of Bangladesh's national tax revenue.

He said attracting investment into manufacturing, tradable services, digital industries and technology-intensive sectors would be critical for achieving the government's target of creating 10-million jobs.

He said the joint FICCI-Policy Exchange report aimed to provide an evidence-based reform roadmap with measurable performance indicators to raise annual FDI inflows from 0.36 per cent to 2.5 per cent of GDP.

Referring to an internal survey among member-companies, he said FICCI members plan to invest around US$4 billion over the next two to five years, while Berger alone intends to invest around Tk 12 billion by 2027-28.

However, he cautions that Bangladesh continues to attract substantially less FDI than comparable Asian economies because investors assess approval timelines, logistics efficiency, contract enforcement, profit repatriation and institutional coordination before making investment decisions.

During the ministerial-panel discussion, Commerce, Industries, Textiles and Jute Minister Khandaker Abdul Muktadir said the government was implementing major reforms to reduce the time required to establish new businesses.

He announced that investors would soon be able to open letter of credit for importing machinery within 15 days of submitting applications, replacing a process that previously required nearly a year.

He also reaffirmed government commitment to energy security, regulatory stability and predictable investment policies.

The minister said Bangladesh must sustain annual economic growth exceeding 8.0 per cent and significantly increase private investment to realise its ambition of becoming a trillion-dollar economy.

Finance and Planning Adviser Dr Rashed Al Mahmud Titumir said investors primarily seek predictability, stability, energy security and regulatory certainty, adding that the government is strengthening these foundations through long-term fiscal planning and institutional reforms.

He said the government would continue investing in education, healthcare, logistics and multimodal connectivity while introducing targeted fiscal incentives to improve competitiveness and productivity.

Posts, Telecommunications and Information Technology Adviser Rehan Asif Asad identified connectivity, artificial intelligence and cybersecurity as the three pillars of the Fourth Industrial Revolution.

He highlighted the enactment of the Personal Data Protection Law, National Data Governance Law, Cybersecurity Law and Telecom Act 2026, saying that these established a modern legal framework for digital investment.

The adviser also outlined plans to expand broadband connectivity, strengthen digital public infrastructure, introduce a unified digital identity and wallet ecosystem and improve telecommunications quality to attract investment in electronics manufacturing, artificial intelligence, cloud computing and advanced technologies.

BIDA and BEZA Executive Chairman Chowdhury Ashik Mahmud Bin Harun announced that the government would shortly operationalise Invest Bangladesh, a unified investment-promotion agency created to consolidate investment-facilitation services under a single institutional platform.

He said the new organisation would reduce bureaucratic complexity, strengthen institutional capacity and provide investors with a single point of contact while encouraging existing foreign investors to serve as ambassadors for Bangladesh.

Special Assistant to the Prime Minister on Investment and Capital Market Affairs Tanvir Ghani said Bangladesh must diversify its sources of finance by deepening domestic capital markets and improving access to international financial markets.

He said the government is working to mobilise private capital through bonds, equity offerings and other market-based instruments while creating an investment-friendly framework covering taxation, regulation and capital repatriation.

Moderating the discussions, Prime Minister's Office Adviser and Spokesperson Mahdi Amin said the government's overall objective is to reduce the cost of doing business, improve the ease of doing business, create employment and ensure inclusive economic growth through stronger coordination among ministries.

A slew of drags like persistent banking-sector weakness, fiscal constraints and mounting external risks made S&P Global Ratings revise Bangladesh's sovereign credit outlook to negative from a stable state.

The American agency's such ratings are prompted by the likelihood that these negatives could delay the country's economic recovery.

However, it affirmed the country's long- and short-term sovereign credit ratings at 'B+/B'.

In its report obtained Monday, the US ratings agency has said Bangladesh was entering a difficult period of economic rebalancing as financial-sector vulnerabilities coincided with uncertainty in global energy markets and international trade.

The agency said sustained strength in remittance inflows, a recovery in readymade-garment exports and continued support from multilateral lenders would be crucial to preserving external stability.

It says: "The negative outlook reflects the risk that Bangladesh's trend economic growth and external position could weaken further over the next 12 to 18 months citing the conflict in the Middle East, banking sector imbalances and energy market volatility."

The agency has alerted it could downgrade Bangladesh's sovereign rating if long-term economic growth weakened further or if the country's external position deteriorated significantly, including through a sustained increase in net external debt relative to current account receipts.

Conversely, the outlook could return to stable if economic growth strengthened materially over the next three to four years and the government achieved lasting improvements in fiscal and external indicators, including higher foreign-exchange reserves, stronger current-account receipts and slower debt accumulation.

The S&P has said Bangladesh's sovereign profile continued to be constrained by low per- capita income, limited fiscal flexibility, weak revenue mobilisation and institutional shortcomings.

However, these weaknesses were partly offset by the country's historically strong growth performance, a moderate public-debt burden and continued financial support from bilateral and multilateral development partners.

The agency expects Bangladesh's economy to grow by an average of about 4.5 per cent over the next three years that reflect continued weakness in the banking sector, uncertainty in global energy markets and subdued demand for garment exports.

Although the BNP-led government secured a strong mandate in the February 2026 election, providing an opportunity for more stable policymaking, S&P thinks meaningful structural reforms would take time because of institutional weaknesses, infrastructure bottlenecks and bureaucratic inefficiencies.

The report says Bangladesh's banking sector remained the principal domestic risk to the economy.

"Weak asset quality, particularly at state-owned and Islamic banks, continued to constrain credit growth and could weigh on the broader economic recovery."

The S&P report says Bangladesh's external position had improved over the past year as foreign-exchange reserves recovered to about US$32.9 billion, helped by stronger remittance inflows and tighter macroeconomic policies.

Nevertheless, it cautions that higher global energy prices and a widening current- account deficit could reverse part of those gains.

The agency expects the current-account deficit to widen modestly over the next three years as imports recover alongside domestic demand, while negotiations with the International Monetary Fund on a new lending programme could provide an important anchor for fiscal and banking-sector reforms.

It forecasts the fiscal deficit to edge up to around 4.7 per cent of GDP over the medium term, while public debt would continue to rise gradually because of weaker nominal GDP growth, higher borrowing needs and the depreciation of the Taka.

The agency also warns that Bangladesh's narrow tax base and high interest burden continued to limit the government's fiscal flexibility.

It has said reforms aimed at improving tax administration and broadening the revenue base could lift the tax-to-GDP ratio modestly above 9.0 per cent, but substantial progress would require sustained implementation.

Inflation is likely to remain elevated, particularly if global energy prices stayed high, while higher government borrowing from domestic banks risked "crowding out" private-sector credit and slowing investment.

The government is working on strengthening access to key markets ahead of Bangladesh's expected graduation from its status as one of the least-developed countries (as classified by the U.N.) later this year.

Efforts such as improving the domestic business environment and boosting competitiveness will, however, take time to implement, it mentioned.

The U.S. tariff policy to be applied to Bangladesh remains in flux. On July 24, 2026, the U.S. introduced new tariffs on a variety of economies, including Bangladesh, which will be subject to a 10 per cent tariff rate on most goods exports to the U.S.

Bangladesh's export profile is highly concentrated in the readymade-garments sector, which represents more than 85 per cent of merchandise exports.

From January to March 2026, 18 per cent of Bangladesh's exports were to the U.S., and about 86 per cent of these were readymade garments, excluding leather products and other textiles.

In the meantime, another global ratings agency, Fitch, also downgraded the country's ratings to negative recently.

Full-fledged Islamic banks and fourth-generation private commercial banks are facing mounting pressure from rising default loans and worsening liquidity shortages, making them the most vulnerable segments of the country’s banking sector, according to Bangladesh Bank.

The central bank’s latest Banking Sector Update shows that the non-performing loan (NPL) ratio of full-fledged Islamic banks surged to 58.4 percent in March 2026, up from 29.2 percent a year earlier.

Fourth-generation private commercial banks -- the nine banks established in 2013 -- recorded the second-highest NPL ratio at 52.2 percent, compared with 44.4 percent in March 2025.

The report said both groups are under severe liquidity pressure due to aggressive lending and elevated credit risk.

Full-fledged Islamic banks remained heavily exposed, with their Advances-to-Deposit Ratio (ADR) climbing to 120.3 percent in March 2026. The average ADR of fourth-generation banks stood at 101.6 percent, with several lenders posting ratios above 100 percent.

Bangladesh Bank said the elevated ADRs reflect aggressive lending by fourth-generation banks as they rapidly expanded their loan portfolios. The ADRs of both groups were well above the banking sector average of 82.7 percent, raising concerns over liquidity risk.

The report noted that Islamic banks have long struggled with structural weaknesses, including limited liquidity management tools and rapid credit expansion.

Last year, the government merged five troubled Islamic banks -- First Security, Global, Social Islami, Union and EXIM Bank -- to form Sammilito Islami Bank PLC after they suffered acute liquidity shortages and alleged loan irregularities linked to the S Alam Group and Nazrul Islam Mazumder.

According to the report, the sharp increase in bad loans at these banks points to weak credit discipline and possible governance failures.

While the overall banking sector reduced its ADR to strengthen liquidity, Islamic and fourth-generation banks remained highly exposed despite relatively slow deposit growth.

Other banking segments performed comparatively better.

Second-generation private commercial banks maintained an NPL ratio of 19.2 percent. Foreign commercial banks remained in a stronger position, with an NPL ratio of 6.3 percent and an ADR of 53.4 percent, enabling them to maintain comfortable liquidity buffers.

Bangladesh Bank warned that aggressive lending and rising default loans at Islamic and fourth-generation banks pose a significant risk to the stability of the banking sector.

It said urgent measures are needed to reduce NPLs and bring ADRs under control. Without corrective action, the existing weaknesses could evolve into broader systemic risks, threatening financial stability and economic growth.

Profits at China’s industrial firms grew at a solid, though slower, pace as resilient exports helped cushion sluggish domestic demand, highlighting the economy’s uneven recovery despite policymakers’ efforts to spur consumption.Exports and industrial production have done much of the heavy lifting for the world’s second-largest economy.Persistent weakness in consumption and the property sector, however, helped drag second-quarter growth to its slowest pace in more than three years, keeping calls alive for further policy support to address economic imbalances.Industrial profit growth eased to 15.1 percent in June from 21.1 percent in May, while first-half profits rose 18.7 percent from a year earlier, compared with an 18.8 percent increase in the January-to-May period, data from the National Bureau of Statistics (NBS) showed on Monday.“If this recovery can be sustained, it will be a good sign for the rest of the economy, as a return of profits growth could give companies room to resume wage growth,” said Lynn Song, chief economist of Greater China at ING.The figures add to evidence of a two-speed recovery in the world’s second-largest economy, where manufacturers have benefited from robust overseas demand, while sectors tied to domestic spending continue to struggle.

“The external environment remains complex and international commodity prices uncertain,” NBS statistician Yu Weining said.“Industrial firms also face weak demand and cash flow pressures.”

Underlining strains in the domestic market, automobile manufacturing profits fell 19.5 percent in the first half of the year, NBS data showed, as car sales declined for a ninth consecutive month in June.Market reaction was muted with Chinese stocks and the yuan slightly firmer following the data.Attention is now turning to the Communist Party’s Politburo meeting at the end of July, a key policy-setting gathering where investors will look for signals on additional support measures.Expectations for a broad-based stimulus package have been tempered, however, by resilient exports and Beijing’s preference for targeted easing.

Industrial profit figures cover firms with annual revenue of at least 20 million yuan ($2.95 million) from their main operations.

Linde Bangladesh PLC, a multinational company listed on the country's stock exchanges, reported a 3.67% year-on-year increase in net profit for the first half of 2026, supported by a higher gross margin despite weaker second-quarter earnings.

According to its financial statements approved by the board of directors today (27 July), the company's revenue rose 12% year-on-year to Tk121.87 crore in the January-June period, while net profit increased to Tk19.45 crore. Earnings per share (EPS) stood at Tk12.78, up from the corresponding period last year.

Explaining the changes in its financial performance, the company said the increase in EPS was driven by a higher gross margin, partly offset by one-off other income recognised in the same period last year.

Net asset value (NAV) per share rose to Tk213.09 as of 30 June 2026, from Tk201.66 a year earlier, while net operating cash flow per share climbed to Tk17.71 from Tk4.08.

The company attributed the increase in NAV to profits earned during the period, partially offset by dividend payments.

However, second-quarter performance was weaker. Although revenue rose 16.68% year-on-year to Tk62.67 crore in the April-June quarter from Tk53.71 crore a year earlier, net profit fell 21% to Tk8.46 crore.

Linde Bangladesh's shares closed 1.34% higher at Tk736 on the Dhaka Stock Exchange today.