The International Monetary Fund (IMF) has delivered a sobering economic forecast for Bangladesh, showing neither leniency nor ungrounded optimism.

While the government continues to project robust economic expansion, expecting growth to accelerate to 8.5% by FY31 and turn Bangladesh into a $1 trillion economy by 2034 (doubling its current size), the IMF's latest outlook presents a stark contrast. The IMF projects that Bangladesh's growth will slow to merely 3% by FY31. Worse still, growth over the preceding three years is expected to remain below 3%, less than half the government's target, leaving Bangladesh with the lowest growth rate in South Asia through FY31.

The root cause: A crisis of governance

What is driving this severe deceleration? The answer lies in two words: governance crisis.

While this diagnosis is far from new, the depth of the crisis is clearly mapped out in the World Bank's Worldwide Governance Indicators (WGI). Good governance is not an accidental byproduct of development; it is the essential foundation of any economy. It functions as the invisible infrastructure that converts potential into sustainable prosperity.

Why is governance so important for an economy to grow?

As the World Bank highlights in its WGI report, governance, defined as the traditions and institutions by which authority in a country is exercised, plays a central role in shaping development outcomes. A substantial body of research demonstrates that inclusive, accountable institutions drive higher growth, foster stronger public services, and expand opportunity. When governance fails, these development gains inevitably collapse.

Bangladesh's current economic stagnation testifies to a system struggling to perform its most fundamental duties. The IMF's grim projection is a direct reflection of this governance breakdown.

Measuring the institutional decay

Let's have a quick look at how Bangladesh has performed in the World Bank's governance indicators which provide annual composite indicators summarising six dimensions of governance: voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption.

Take it one by one. Among the six indicators, Bangladesh slightly improved in political stability and government effectiveness. But the overall score is not inspiring. In political stability, Bangladesh scored 49.11 out of 100 in 2025 from 42.03 in 2015. Government effectiveness too slightly improved to 43.24 in 2025 from 41.19 in the last one decade. Its score slightly declined in the other four indicators. The overall scores in voice and accountability, political stability and regularity quality remained in between 39 to 49 out of 100. Among South Asian countries, Bangladesh is ahead of only Afghanistan and Pakistan in most of the indicators. The countries having an effective governance system score above 90. [See the infographic]

The cumulative effect of the poor score in the above five indicators has made controlling corruption a herculean task with Bangladesh always scoring lowest. In 2015, it scored only 26.33 out of 100, which increased to 28.20 after a decade. Bangladesh's failure to curb corruption is also reflected every year on the Corruption Perception Index published by Transparency International, in which Bangladesh is also bracketed among the world's most corrupt countries underscoring how systemic graft drains public resources, erodes institutional capacity, and weakens the state's economic foundation.

At the heart of unbridled corruption is a compromised judicial framework. The World Justice Project's Rule of Law Index which evaluates police, courts, and correction systems, ranks Bangladesh near the bottom. Over the past decade, Bangladesh's score has hovered between 0.30 and 0.34 (out of 1.00), lagging well behind the global average (0.47–0.50) and the regional South Asian average (0.36–0.39). With courts overwhelmed by millions of pending cases, maintaining law and order remains improbable, leaving corruption to flourish unabated.

The above scores portray a fragile state of Bangladesh's governance. Vulnerability and maladministration in the banking sector, fiscal deficits, revenue shortfalls, debt traps, poor tax-GDP ratio, persistent high inflation, market syndicate and extortion, stagnant foreign direct investment, private sector constraints, regulatory red tape are among the fallouts of the governance crisis. Ultimately it is ordinary citizens and local businesses who bear the financial brunt of these failures.

Extractive institutions and the reform paradox

Reaching the ambitious target of a $1 trillion economy by 2034 requires sweeping, fundamental structural shifts. Yet, successive reform attempts have routinely lost momentum. Current policy adjustments lack the depth needed to rebuild decaying institutions.

Institutional economists advocate for actively building and reforming institutions. The necessity of institutions for economic growth is loud and clear. They believe that markets cannot function efficiently in a vacuum. Institutions set the "rules of the game" that dictate whether an economy will flourish or stagnate. Four prominent economists-- Douglass North, Daron Acemoglu, James Robinson and Simon Johnson who won Nobel for their groundbreaking institutional analysis argue that institutions are the fundamental cause of long-term economic growth, far outweighing factors like geography or culture.

The World Bank's governance report speaks for inclusive institutions for growth. Unfortunately, in Bangladesh, political and economic institutions turned into extractive institutions, concentrating political and economic power within a small, unconstrained group of elites. That elite group exploits the system to extract wealth from the general population for their own benefit.

Reversing this trajectory requires unyielding, uncompromising reform to transition toward inclusive institutions.

Band-aids on a deep wound

In practice, meaningful reform remains elusive. Dr Zahid Hussain, former Lead Economist at the World Bank's Dhaka office, notes that while some efforts have been made, progress remains severely constrained.

"In banking, some work has gone into standing up the consolidated bank, and that is the one big step toward resolving distressed institutions. But most of the central bank's circulars — on rescheduling, on emergency liquidity — are not reforms; they are band-aids that cover the bleeding," he observes.

He says governance helps explain why Bangladesh is performing worse than comparable countries despite the various crises unfolding around the world. After all, those countries are operating in the same global environment. They are facing many of the same external shocks, yet their economic performance is better than ours.

Emphasising political reforms the economist says the economy's structure stands on the political structure; if the political equilibrium does not change, shifting the economic one is very hard—both in how fast the economy grows and in who enjoys the gains.

"And look at where the politics has gone. Search the term "political settlement" on Google Trends and you will see it spike after August 2024 and then fade to almost nothing. All that intense talk of a new political settlement has gone quiet—not because we achieved one, but because we did not, and perhaps we have given up hope for it."

In the FY27 budget speech last June, the finance minister outlined ten core priorities—placing the issue of building transparent, efficient, and accountable institutions and administration dead last at number ten.

Metaphorically speaking, Bangladesh governance system needs organ transplant to remove structural malaise acting as deadliest pathogen crippling institutions. But what if reform measures are acting as band-aids as noted by economist Zahid Hussain? Will it cure the failing system which is urgently needed overhaul?

When a nation fails to disrupt the vicious cycle of extractive institutions, the inevitable outcome is clearly foretold in Acemoglu and Robinson's seminal work: Why Nations Fail.

The first phase of an India-US trade deal is in the final stages of drafting, India’s trade minister said on Thursday, but reiterated that New Delhi would proceed only if it secures an advantage over competing exporters.

New Delhi ‌and Washington agreed to a framework for the deal in February which brought down to 18 percent from 50 percent the punitive tariff on most Indian goods imposed in August last year after a previous round of talks ​collapsed.

Since then, negotiations have run into hurdles, with officials on both sides signalling that efforts to reach a final agreement have slowed.

Indian trade minister Piyush Goyal said the “first tranche” of the deal would be finalised soon.

“It’s going through the final contours, the legal ​drafting, and we hope to be able to finalise that soon and operationalise that once we ​get comparable advantage or competitive advantage over our peer countries,” a statement from his office quoted him as saying at an event in New Delhi.

Goyal was referring to New Delhi’s efforts to secure a tariff advantage for Indian exporters over competing economies such as Bangladesh, Vietnam and Indonesia in the US market.

India wants to ensure its exporters face tariffs no higher than those imposed on competing economies do.

Trade Secretary Rajesh Agrawal ‌echoed Goyal’s ⁠comments.

“We anticipate concluding and signing the trade deal at the earliest possible time,” Agrawal said, adding that India was seeking preferential market access and greater tariff stability under the proposed agreement.

India’s goods exports to the United States rose to $42.79 billion in April-August from $40.39 billion a year earlier. In the fiscal year 2025/26, India recorded a ⁠trade surplus of nearly $34 billion with the United States.

Neither side has publicly detailed the reasons for the delay, but one recent complication has been a new US law that could pave the way for tariffs of up to ⁠100 percent on Indian goods because of New Delhi’s continued purchases of Russian oil.

The trade talks have unfolded against a backdrop of increasingly strained ties between India and the United States, complicating efforts to steady ⁠their trade partnership.

US Secretary of State Marco Rubio will visit India and Uzbekistan, from October 17 to 22, and will meet government and business leaders to discuss energy cooperation, commercial investment and broader economic ties.

The International Monetary Fund expects energy-rich Middle Eastern economies to bounce back, but not in the medium term, the organisation’s regional chief said on Thursday, as fighting continued between Saudi Arabia and Yemen’s Houthis.

The statement comes as the IMF projects a widespread contraction in Gulf economies following months of war that began in Iran and has now spread to Saudi Arabia and Yemen, with maritime energy traffic still impacted.

“We will not go back to the pre-war trajectory in the medium term because this shock will have a scarring impact on various sectors and also will disrupt a certain number of infrastructure, and will require additional spending in order to increase resilience,” IMF regional director Jihad Azour told reporters.

The warning comes as officials and experts huddled in Bangkok this week to discuss headwinds facing the global economy, including stubbornly high energy costs and questions over the sustainability of the artificial intelligence boom.

The IMF on Tuesday released projections showing that the Middle East and Central Asia region -- directly exposed to the Iran war -- is expected to contract 0.3 percent in 2026. Saudi Arabia is among the worst affected, with its economy projected to shrink 3.3 percent.

The projection points to a rare recession for the Gulf kingdom, which has long been buffered by robust energy exports. On Wednesday, IMF chief Kristalina Georgieva warned that ongoing attacks targeting Saudi Arabia could affect people “everywhere”.

A violent battle between a Saudi-led coalition and Yemen’s Houthis has sharply escalated in recent days, with fatal missile strikes hitting airports and energy facilities, as well as the headquarters of the kingdom’s state oil giant Aramco.

Uttara Bank PLC reported a slight gain in net profit for the July-September quarter of 2026, supported by steady performance across its core operations.

According to a price-sensitive disclosure filed on the Dhaka Stock Exchange (DSE) today (15 October), the private commercial bank posted a consolidated net profit after tax of Tk159.88 crore for the third quarter ended 30 September 2026. This represents a slight increase from Tk158.46 crore recorded during the same period of the previous year.

Consequently, the bank's consolidated earnings per share (EPS) inched up to Tk1.32 for the July-September quarter, compared to Tk1.31 in the corresponding period of 2025.

On a standalone basis, Uttara Bank's net profit after tax rose to Tk161.32 crore in Q3 FY26, up from Tk157.99 crore in Q3 FY25, pushing solo EPS to Tk1.33.

For the cumulative nine-month period (January-September 2026), the lender logged a consolidated net profit of Tk430.59 crore, up 28% from Tk335.26 crore in the corresponding period of 2025. Consolidated nine-month EPS increased to Tk3.55 from Tk2.76.

Operating cash flow witnessed a massive surge, with consolidated net operating cash flow per share (NOCFPS) climbing to Tk17.02 for January-September 2026, compared to Tk0.44 in the same period last year.

Consolidated net asset value (NAV) per share strengthened to Tk28.99 as of 30 September 2026, up from Tk23.73 a year earlier.

Following the disclosure, its shares price remained unchanged at Tk20.90 on the DSE.

State-owned submarine cable operator Bangladesh Submarine Cables reported a 37.47% year-on-year increase in net profit for the 2025–26 fiscal year, reaching Tk283 crore, and recommended a 47.50% cash dividend for its shareholders.

The annual audited financial statements were approved on Thursday at a meeting of the company's Board of Directors.

According to its Price Sensitive Information disclosure, total revenue grew by 25% to Tk496 crore, up from Tk396 crore in the previous fiscal year.

The company attributed its top-line growth to increased demand across core business segments – including International Private Leased Circuit (IPLC) rent, IP transit services, and co-location services – supported by management initiatives and favourable government policies.

Its diluted earnings per share (EPS) stood at Tk13.61, up from Tk9.93 in the prior fiscal year, driven primarily by operational business growth alongside higher interest and other income, with no significant extraordinary transactions recorded during the period.

The record date for determining shareholder eligibility for the dividend has been set for 17 November, and the company will hold its Annual General Meeting (AGM) virtually on 20 December 2026.

Finance Minister Amir Khosru Mahmud Chowdhury has said Bangladesh and the International Monetary Fund (IMF) will hold further discussions for two weeks from next week to work out the details of the country's loan proposal, with the aim of finalising the outstanding issues.

"In principle, everything is fine. Now, the two teams will sit together to discuss how to close the deal," he said after a meeting with the IMF in Bangkok today (16 October).

The meeting focused on the final review of a proposal submitted by Bangladesh to the IMF, the minister said.

All multilateral organisations are working closely with Bangladesh, he said, adding that all multilateral and bilateral partners, including the World Bank, IMF, Asian Development Bank and Japan International Cooperation Agency, are keen to support the country.

The coming year is very important for Bangladesh and development partners share that view, Khosru stated.

Dhaka has proposed signing a Country Partnership Framework with the World Bank, he added.

The government has drawn up a development framework for the next five years, said the minister.

The comments come during the 2026 annual meetings of the IMF and the World Bank Group, which are taking place in Bangkok, Thailand, from 12 to 18 October.

Garment exporters have sought Prime Minister Tarique Rahman’s intervention to resolve a dispute over the clearance of imported coarse cotton yarn, saying that delays could disrupt production and hurt export orders from international retailers and brands.

In a letter to the prime minister yesterday, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) urged the government to resolve the issue and withdraw an order by the revenue board.

In that order in the first week of September, the National Board of Revenue (NBR) suspended the bond facility for imports of 10 to 30-count cotton yarn. This range usually covers coarse yarn mostly used in making knitwear items.

BGMEA and BKMEA said their members are facing difficulties clearing the imported yarn from Chattogram port despite the commerce ministry’s subsequent move to withdraw the requirement for bank guarantees for imports of 10 to 30-count yarn.

“Yes,” BGMEA President Mahmud Hasan Khan said in a WhatsApp message yesterday when asked whether the associations have sent the letter to the prime minister.

The Daily Star has seen a copy of the letter where BKMEA President Mohammad Hatem signed it on behalf of the knitwear trade body.

In the letter, apparel manufacturers said that garment exports could be significantly affected if the 10 to 30 count-yarn consignments remain stuck at the port and the previous facility for duty-free imports under the bonded warehouse system is not restored promptly.

They also said that international retailers and brands could lose confidence in Bangladesh if exporters fail to deliver garments on time because they could not obtain the raw materials needed for production.

The dispute centres on the conditions for clearing yarn imported under letters of credit (LCs) opened before September 7, when the NBR issued its order withdrawing the bond facility for 10 to 30-count cotton yarn.

Following the order, customs officials began requiring bank guarantees for the release of such consignments, including yarn imported under LCs opened before the new rules took effect.

The commerce ministry issued a circular on September 13 withdrawing the bank guarantee requirement. However, exporters said customs officials continue to hold up consignments, citing the need for further instructions from the authorities.

The exporters said they want yarn imported under earlier LCs to be released without imposing the new conditions, saying that they made their import commitments under the previous rules.

Beacon Pharmaceuticals PLC has announced a massive investment plan of Tk250 crore to set up its second oncology production facility.

The decision was approved during the company's board meeting yesterday (15 October).

The move aims to expand its manufacturing footprint, boost future revenues and strengthen research capabilities to meet international regulatory standards, according to the company's price-sensitive statement.

According to a price-sensitive disclosure issued by the drugmaker, the new facility will significantly enhance its annual production capacity.

Upon completion of oncology production facility 2, the company's annual output will increase by 37.97 crore tablets, 21.10 crore capsules, 2.53 crore blisters and 2 crore vials of injectables.

Beacon Pharmaceuticals expects this new facility to have a substantial positive impact on its long-term revenue growth.

Alongside the investment announcement, the company released its audited financial statements for the fiscal year ended 30 June 2026, displaying a robust financial performance driven by a 31% year-on-year increase in sales.

Beacon Pharmaceuticals saw its earnings per share (EPS) more than double, rising 105% to Tk8.41 for FY2025–26, up from Tk4.10 recorded in the previous fiscal year.

Reflecting this stellar financial growth, the company recommended an 11% cash dividend for the year ended 30 June 2026.

The record date for the dividend distribution has been scheduled for 10 November. Shareholders will vote on the proposed dividend and financial statements during the company's annual general meeting (AGM), set to take place via a digital platform on 13 December.

Shares of Far East Knitting and Dyeing Industries PLC surged 11.96% to Tk20.60 today (15 October), despite the company reporting a net loss in FY26 and halving its proposed cash dividend.

The share price rose following the disclosure of its financial results and dividend recommendation on the Dhaka Stock Exchange (DSE). Under applicable trading rules, the stock had no circuit breaker on the first trading day after the dividend declaration, allowing its price to move without the usual daily limit.

The textile manufacturer posted a net loss of Tk14.62 crore in the fiscal year ended 30 June 2026, against a net profit of Tk37.46 crore in FY25, according to its price-sensitive information. Earnings per share (EPS) fell to negative Tk0.67, primarily due to lower sales and other income.

Despite the loss, the board recommended a 6% cash dividend, equivalent to Tk0.60 per ordinary share of Tk10 each, for FY26, down from 12% in the previous fiscal year.

The company's net operating cash flow per share (NOCFPS) fell to negative Tk3.40, reflecting lower cash receipts from customers and other income alongside higher operating expenses.

Net asset value (NAV) per share declined to Tk19.27 as of 30 June 2026, from Tk21.37 a year earlier.

Shareholders will approve the dividend and financial statements at the company's annual general meeting, scheduled for 23 December on a digital platform. The record date for dividend entitlement is 12 November.

A delegation led by German Ambassador to Bangladesh Rüdiger Lotz visited two AKIJ Resource factories in Narayanganj on Tuesday to explore opportunities for industrial cooperation, technology exchange and investment between Bangladesh and Germany.

The delegation toured AKIJ Cement Company Limited and AKIJ Essentials Limited, discussing production capacity, technological advancement, resource efficiency and sustainable manufacturing.

Welcoming the ambassador and his delegation, Mohammad Towfique Hasan, chief business development officer of AKIJ Resource, said, “We are honoured to welcome Rüdiger Lotz and the delegation from the German Embassy to our manufacturing facilities.”

“We attach great importance to such exchanges and believe that sharing experiences and maintaining regular engagement can help create new opportunities for industrial and commercial cooperation between Bangladesh and Germany,” he added.

Asadul Haque Sufyani, cluster chief executive officer of AKIJ Building Solutions, said Bangladesh’s industrial sector was undergoing continuous modernisation, with technology, product quality, operational efficiency and environmentally responsible manufacturing becoming increasingly important.

“The German ambassador’s visit provides a valuable opportunity to showcase our manufacturing capabilities and industrial operations, while facilitating the exchange of experience and discussions on potential areas of future cooperation,” he said.

Senior AKIJ Resource officials briefed the ambassador and his delegation on production capabilities, quality standards, technology adoption and sustainable industrial development. Discussions also highlighted opportunities to strengthen industrial capabilities through manufacturing innovation, efficient resource utilisation and greater attention to environmental considerations.

Bangladesh and Germany share longstanding commercial ties, and direct engagement between industrial enterprises can help deepen these relations, the release added.

Through factory visits and knowledge exchange, AKIJ Resource seeks to strengthen engagement with international partners, showcase Bangladesh’s industrial capabilities and explore opportunities for cooperation in technology and sustainable manufacturing.

Sohanur Rahman Sohan, deputy chief operating officer of AKIJ Resource; Md Mustaq Ahmed, chief financial officer; Subrata Kumar Singha, senior manager (marketing) of AKIJ Building Solutions; Md Ariful Islam, plant head of AKIJ Essentials Limited; Md Habibur Rahman, plant head of AKIJ Cement; Md Rahajul Amin, sustainability lead; and Md Ashrafur Rahman, communications and partnerships lead, attended the event.

Nearly 29% of highly educated young people in Bangladesh are unemployed, while around half of highly educated workers are employed in jobs that do not fully use their qualifications and skills, according to the International Monetary Fund (IMF).

The findings were highlighted in the IMF's Regional Economic Outlook: Asia and Pacific, released yesterday (15 October) at a press conference at the Queen Sirikit National Convention Centre in Bangkok, Thailand.

The report said Bangladesh's overall youth unemployment rate stands at 12-13%, but the situation is far worse among highly educated young people.

A mismatch between educational quality and labour market demand has left many struggling to find suitable jobs.

Many graduates work below their qualifications

According to the IMF, nearly 50% of highly educated workers in Bangladesh are employed in occupations below their qualifications.

The gap between the skills acquired through education and employers' needs is a key reason, forcing many people to accept jobs that do not match their training and limiting the economy's productivity.

The report also identified the dominance of the informal sector as a major weakness in the labour market.

Many workers in agriculture and other informal sectors lack formal employment contracts, job security and opportunities for career advancement. Conventional unemployment figures do not fully reflect this insecurity, it said.

Demographic dividend faces employment challenge

The IMF projected that Bangladesh's working-age population, aged 15-64, would grow by around 10-12% between 2025 and 2035.

Creating productive, quality jobs in manufacturing and services will be crucial to turning this demographic growth into an economic advantage.

Without sufficient employment opportunities, rising joblessness could fuel frustration among young people and slow economic growth, the report warned.

AI reshapes labour market demand

The report also highlighted the impact of artificial intelligence (AI) on employment across Asia.

Hiring demand in occupations highly exposed to AI has fallen by nearly 10% compared with occupations less affected by the technology, while demand for workers with specialised AI-related skills is increasing.

The IMF warned that Bangladesh's employment challenges could deepen unless workers' skills keep pace with technological changes.

Improving skills, expanding labour market capacity and preparing strategies to create jobs for the future will be key to addressing the challenges.

The government has asked all ministries and their subordinate offices to submit time-bound plans by 25 October to amend relevant laws, regulations and agreements, and make other changes needed to shift the country's fiscal year from July-June to April-March.

According to sources, the Cabinet Division recently sent letters to the Ministry of Public Administration and other ministries, seeking plans for the necessary changes.

The Ministry of Public Administration has since instructed its subordinate offices and agencies to submit their respective plans by the same deadline.

A letter signed by Public Administration Ministry Deputy Secretary Mosaddek Mehedi Imam said the review should cover relevant laws, rules, circulars, statutory regulatory orders (SROs), contracts and memorandums of understanding, as well as statistical and information technology systems.

The requested plans are intended to identify the amendments and revisions needed to implement the fiscal-year change, according to the letter.

How the fiscal year is changing

At a Cabinet meeting on 17 August, the government decided to shift Bangladesh's fiscal year from July-June to April-March.

To facilitate the transition, the government has set fiscal year 2027-28 as a nine-month transition period, running from July 2027 to March 2028.

The first full fiscal year under the new system will begin on 1 April 2028 and end on 31 March 2029.

The change will require adjustments to budget preparation by the Finance Division, tax collection by the National Board of Revenue, regulations governing public services, and financial and legal frameworks in the private sector.

Officials concerned said the Cabinet Division had sought time-bound plans to ensure the necessary changes are completed within the stipulated period.

Oil markets initially treated the Iran war as a brief bullish disruption in a long-term bearish trend.

But traders are now betting that oil prices will remain elevated through 2028, forcing a rethink of the global inflation outlook.

Eight months into the war, the buffers that helped absorb the initial energy shock – most notably onshore crude oil stockpiles – are wearing dangerously thin.

At the same time, the recovery in crude exports through the Strait of Hormuz remains fragile, global refining capacity has been eroded and credible diplomatic pathways to end the conflict appear narrower than ever.

Global benchmark Brent crude futures tell the story.

Contracts for delivery in December 2027 have climbed more than 13 percent since the start of September to $86 a barrel, the highest level for the contract, while December 2026 contracts have gained around 12 percent.

The Brent forward curve is not a price forecast, of course.

But it reflects the willingness of refiners, airlines, commodity traders and asset managers to lock in elevated prices months and even years into the future.

In effect, market participants are paying a premium against the possibility that today’s disruptions will become tomorrow’s normal.

This market positioning stands in stark contrast to widely held industry expectations of a recovery in global oil supplies next year.

The International Energy Agency projects global supply will rise to 108.3 million barrels per day (bpd) in 2027 from 100.7 million bpd this year as Middle Eastern exports recover.

Demand, meanwhile, is forecast to increase from 102.4 million bpd to 104.4 million bpd next year, still slightly below 2025 consumption.

This recovery is expected to be concentrated in petrochemical feedstocks rather than transportation fuels like diesel.

Regardless, the agency’s projected balances imply a sizeable supply surplus next year that would normally weigh on prices.

Yet the steady rise in long-dated futures suggests investors are increasingly sceptical that this recovery will fully materialise or, if it does, that it will endure.

The standoff between Washington and Tehran remains centred on control of the Strait of Hormuz.

While oil flows through the strategic waterway have rebounded to near pre-war levels in recent weeks thanks partly to US naval support, Iran has intensified attacks on vessels in the past week and threatened further disruption.

The conflict has also expanded beyond the Gulf.

Yemen’s Iran-aligned Houthis have recently stepped up missile and drone attacks on Saudi Arabia, including strikes this week on the headquarters of Saudi Arabia’s state-owned oil giant Aramco (2222.SE) in Dhahran.

Given this backdrop, every barrel leaving the Gulf now carries a widening security premium.

Complex logistics, elevated freight rates, high insurance costs and military protection now account for nearly a third of the cost of moving a barrel of oil out of the region, compared with 3 percent before the war. Absent a durable settlement over Hormuz, much of that cost is likely to remain entrenched in prices for the foreseeable future.

The strain is even more visible in diesel markets.

Benchmark European diesel futures hit a record $1,480 per metric ton, equivalent to around $210 per barrel, in mid-September amid an acute shortage of supplies caused by disruptions in the Middle East and Russia.

Since Russia’s 2022 invasion of Ukraine, drone attacks by Kyiv have crippled Russian refineries, forcing Moscow to ban diesel exports earlier this year.

US President Donald Trump on Friday announced an agreement with Russian President Vladimir Putin to allow Moscow to resume some diesel exports and later proclaimed another “energy ceasefire” between Russia and Ukraine.

But the additional Russian exports cited by Trump are minuscule – equivalent to roughly 12 hours of global supply – and no one, including the two parties involved, is giving much credence to the purported ceasefire.

Instead, traders are focused on the dramatic loss of fuel production capacity this year, with diesel futures signalling continued tightness ahead.

Contracts for delivery in December 2027 climbed above $1,000 a ton for the first time this week, compared with a pre-war level of $644.

The fuel repricing may ultimately prove more important than the rise in crude itself.

Diesel powers the trucks, ships, factories and farms that underpin global commerce.

Sustained diesel inflation has historically seeped into the wider economy through higher transportation, manufacturing and food costs.

With headline US inflation running at 3.7 percent in September – almost twice the Federal Reserve’s targeted 2 percent rate – and core inflation creeping up, persistently high diesel prices remain a major concern for US and global policymakers.

A NEW REALITY

For much of this year, energy markets operated on the assumption that the Iran war would resemble past geopolitical crises: a sharp but temporary disruption followed by a quick return to normality.

Increasingly, investors are concluding otherwise.

The issue is no longer simply how much oil can move through Hormuz.

Markets need to know whether the global energy system can quickly rebuild the inventories, refinery capacity and supply chains damaged by months of conflict.

Until then, the world risks becoming trapped in an era of structurally higher energy costs that lasts long after the shooting stops.

Emerald Oil Industries PLC has once again missed its production restart deadline, as delays in obtaining an electricity connection and a seasonal shortage of rice bran, its main raw material, have stalled the listed company's plan to resume commercial operations.

The company had expected to restart production by 30 September 2026, but the deadline passed without operations resuming. It is also holding back production during the current off-season because of insufficient raw material, according to a disclosure published on the Dhaka Stock Exchange (DSE) today (15 October).

The share price of the company closed at Tk27.90 on the Dhaka Stock Exchange today.

Emerald Oil said recent electricity shortages in rural areas and shortfalls in the national grid had delayed the required electricity connection from the Bangladesh Power Development Board (BPDB).

To facilitate the connection, the company has installed solar panels worth around Tk80 lakh and deposited approximately Tk50 lakh towards the connection costs specified by BPDB. However, it has not announced a revised date for resuming commercial production.

The company also said rice bran, its primary raw material for producing rice bran oil, becomes available in the market from November because of its seasonal nature. Limited supplies during the current off-season have therefore prevented it from starting commercial operations.

The latest delay follows an earlier disclosure on 30 July, when the company said it expected to resume commercial operations by the end of September.

Factory shut for more than two years

Emerald Oil's factory has remained closed since 1 January 2024, when the company suspended production citing inadequate gas supply.

In a disclosure on 8 July, the company said its board had authorised management to take the necessary steps to reopen the factory and carry out repairs and maintenance.

The planned work included purchasing and installing a new boiler, transformer and electrical substation, along with repairing and maintaining machinery, including the refinery unit. The company estimated that the work could cost around Tk10 crore.

Despite these preparations, the company has yet to restart production because of the electricity connection issue and the unavailability of sufficient rice bran.

Repeated shutdowns undermine recovery efforts

Established in 2008, Emerald Oil began producing rice bran oil under the Spandan brand in 2011 and was listed on the stock market in 2014.

The company suspended production in 2017 amid financial and business difficulties. It resumed trial production in late 2021 following investment from Minori Bangladesh Ltd, an associate of Japanese agricultural company Minori Co Ltd, before returning to full-scale production in January 2022.

However, the recovery proved short-lived as gas shortages, raw material constraints and financial difficulties continued to affect operations.

In September 2023, Emerald Oil, Minori Bangladesh and Jamuna Edible Oil signed an agreement to increase rice bran oil production. Under the plan, Jamuna Edible Oil's facilities would be used to process crude rice bran oil, with a target of raising daily production to 160 tonnes by processing 800 tonnes of rice bran a day.

The subsequent suspension of operations and business difficulties, however, disrupted the company's recovery plans.

Financial disclosures not updated

The prolonged shutdown has been compounded by the absence of updated financial information. According to the information provided, Emerald Oil has not published financial statements since January 2023, leaving investors without a clear picture of its current financial position, liabilities and ability to finance a production restart.

The company's shares are currently traded in the Z category on the DSE. General investors hold 41.04% of its shares.

The lack of recent financial statements makes it difficult for investors to assess the company's performance and recovery prospects, particularly after more than two years of suspended production.

For Emerald Oil, securing a reliable electricity connection, ensuring adequate supplies of rice bran and completing factory repairs will be crucial to restarting operations.

US consumer inflation was hotter than anticipated in September, government data showed Wednesday, as Washington’s continued war with Tehran pushed energy costs higher, deepening strains on American households ahead of next month’s midterm elections.

The uptick underscores voter worries over high costs of living, and comes as President Donald Trump is campaigning in US states to shore up support for his Republican Party as it tries to retain control of Congress.

The consumer price index (CPI) rose 3.7 percent year-on-year in September, the Department of Labor said, more than the 3.6 percent forecasted by analysts according to MarketWatch.

This was a notable acceleration from 3.4 percent in August, in one of the last major economic reports before the November 3 vote.

Inflation picked up pace on a month-on-month basis too, accelerating from 0.4 percent in August to 0.6 percent last month.

Gasoline costs accounted for more than half of the monthly CPI jump, surging 9.1 percent in September.

The higher-than-expected inflation reading has raised the odds of a second straight interest rate hike at the US central bank’s October 27-28 policy meeting, although many expect the Federal Reserve to proceed cautiously.

Economist James Knightley at ING noted that Fed officials John Williams, Philip Jefferson and Christopher Waller have suggested “that we don’t need to see back-to-back interest rate increases,” instead leaning towards “a slow and steady” approach.

He expects the Fed will want to be “careful and cautious in terms of its policy tightening.”

Traders see a 37.1 percent chance that the Fed will raise rates by another 25 basis points in October, according to CME Group’s FedWatch tool. The probability was around 22 percent a day prior.

“We expect at least two more rate hikes by early 2027, starting in December,” said KPMG chief economist Diane Swonk. “September gave the Fed more reason to hike, even if officials hold in October.”

Industries sensitive to interest rates, including housing, are already under pressure from steeper borrowing costs.

Yields on US government bonds spiked after the inflation report. The 10-year Treasury yield, which influences rates on mortgage and auto loans, rose to 5.3 percent from 5.2 percent. But it has since moderated.

“Energy lit the match; sticky services, shelter and goods prices kept the fire burning,” said KPMG’s Swonk of the inflation report.

Energy prices have soared since the United States and Israel attacked Iran in late February, prompting Tehran to block off the Strait of Hormuz, a vital route for oil and gas shipments.

Average prices at US gasoline pumps have surged more than 45 percent since the start of the Middle East war to $4.33 per gallon, according to AAA motor club data.

Diesel prices have soared even more, by 67.7 percent, boosting the cost of transporting goods and threatening further spillovers to consumers.

“Again, the Iran-US conflict has led to higher motor fuel costs that everyone is experiencing,” ING’s Knightley told AFP.

“The US is also seeing substantial increases in airline fares,” he said, adding that this will likely contribute to additional price pressures.

Core CPI, which excludes volatile food and energy prices, was up 2.6 percent from a year ago.

Although high gasoline and diesel prices drove about half of the September spike in inflation, “it’s starting to spill into other areas,” warned Heather Long, chief economist at the Navy Federal Credit Union.

“Airfares, used cars and recreation all had big price jumps,” she added. “Americans are seeing their pay totally wiped out by inflation. That’s been the case for half a year now.”

With the underlying US economy remaining strong as massive spending linked to the artificial intelligence buildout boosts demand for chips and labor, economists also caution that higher costs could continue filtering through to households.

Two listed companies of BSRM Group, Bangladesh Steel Re-Rolling Mills Limited and BSRM Steels Limited, jointly posted record revenue of Tk23,943 crore in the fiscal year ended 30 June 2026, up 20% from the previous fiscal year.

The two steelmakers also reported a combined net profit of Tk1,418 crore in FY26, a 25% increase from Tk1,132 crore in FY25, driven by strong market demand and higher sales volumes.

Company officials said both revenue and net profit reached all-time highs in the group's corporate history during the year.

According to price-sensitive disclosures issued after their respective board meetings today (14 October), Bangladesh Steel Re-Rolling Mills Limited (BSRM Ltd) reported consolidated revenue of Tk10,995 crore in FY26, up from Tk9,664 crore in the previous fiscal year.

The company's net profit rose to Tk703 crore from the previous year, while earnings per share (EPS) increased to Tk23.54 from Tk20.57.

Its net asset value (NAV) per share stood at Tk186.06 as of 30 June 2026.

The board of BSRM Ltd recommended a 55% cash dividend for shareholders for FY26.

Meanwhile, BSRM Steels Limited, the group's flagship re-rolling unit, recorded a revenue of Tk12,949 crore in FY26, up 25% from Tk10,367 crore logged in FY25.

The company's net profit after tax surged 38% to Tk715 crore, pushing its EPS up to Tk19.03 from Tk13.77. BSRM Steels' NAV per share reached Tk106.36, while its board recommended a 60% cash dividend for the fiscal year.

Shareholders of both entities will vote on the dividend approvals and financial statements at their respective Annual General Meetings scheduled for 17 December via digital platforms, with the record date for entitlement set for 15 November.

Far East Knitting and Dyeing Industries PLC incurred a net loss in the fiscal year ended 30 June 2026, prompting its board to halve the proposed cash dividend to 6% from 12% in the previous fiscal year.

According to a price-sensitive disclosure approved at a board meeting today (14 October), the textile manufacturer posted a net loss of Tk14.62 crore in FY26, against a net profit of Tk37.46 crore in FY25.

Consequently, earnings per share (EPS) fell to Tk0.67 negative in FY26. The company attributed the deterioration in EPS primarily to a decline in sales and other income during the period.

Despite the loss, the board recommended a 6% cash dividend, equivalent to Tk0.60 per ordinary share of Tk10 each, for FY26. The proposed payout is half the 12% cash dividend declared for FY25.

The company's cash flow metrics also suffered a severe contraction, with Net Operating Cash Flow per Share (NOCFPS) falling to Tk3.40 negative in FY26.

The decline was driven by reduced cash receipts from customers and other income, coupled with higher operating expenses.

Meanwhile, Net Asset Value (NAV) per share dropped to Tk19.27 as of 30 June 2026, down from Tk21.37 a year earlier.

The company will seek shareholder approval for the dividend and financial statements at its annual general meeting (AGM) scheduled for 23 December, via a digital platform. The record date for dividend entitlement has been set for 12 November.

Bangladesh Bank Governor Md. Mostaqur Rahman has stressed the need for strengthening the activities of the SAARCFINANCE Working Group and boosting bilateral trade and financial cooperation between Bangladesh and Bhutan.

He made the observations during a courtesy meeting with Yangchen Chhophel, Governor of the Royal Monetary Authority of Bhutan (RMA), held on Wednesday on the sidelines of the IMF-World Bank Group Annual Meetings 2026 in Bangkok, Thailand.

During the meeting, Governor Rahman highlighted the critical role of regional financial coordination and underscored how expanding trade ties between Bangladesh and Bhutan could foster mutual economic resilience across South Asia.

Both central bank chiefs discussed various aspects of SAARCFINANCE operations, bilateral trade mechanisms, and avenues for mutual cooperation, describing the high-level dialogue as constructive and highly fruitful.

According to a press release issued by Bangladesh Bank, the meeting was also attended by Bangladesh Bank Deputy Governor Dr. Md. Habibur Rahman and Royal Monetary Authority of Bhutan Deputy Governor Ugyen Choden.

The United States and China have signalled support for Bangladesh's economic recovery and energy security, with Beijing expressing interest in expanding investment in the country's power and energy sectors and Washington offering cooperation on debt management.

The assurances came during separate meetings between Bangladesh's delegation and officials from the US Treasury Department and the Export-Import Bank of China (China Exim Bank) on the sidelines of the IMF-World Bank annual meetings in Bangkok, Thailand, officials familiar with the discussions told The Business Standard today (14 October).

A member of the Bangladesh delegation said China Exim Bank had expressed interest in increasing investment in Bangladesh's energy and power sectors.

The bank also informed the delegation that its chairman would visit Dhaka next week, raising the prospect of further engagement on investment.

The US Treasury Department, meanwhile, assured Bangladesh of cooperation in several areas, including debt management and bilateral relations, officials said.

Bangladesh pledges faster project delivery to secure $10b in WB loans
Washington's support is seen as particularly important to Bangladesh's efforts to secure financing from the International Monetary Fund (IMF), given the United States' veto power over the institution's decisions.

After meeting US Treasury officials, Finance Minister Amir Khosru Mahmud Chowdhury said Bangladesh had received less support from the United States than it had expected in the past, but hoped closer bilateral ties would lead to greater assistance.

The discussions covered debt management, bilateral relations and other issues, he said, adding that the improvement in relations had raised the government's expectations of further US support.

Pointing to Bangladesh's purchases of aircraft from the US and imports of goods including soybeans, the finance minister said the country should receive greater American support in advancing its development and economic interests.

Government expects support in coming months

Prime Minister's Economic Adviser Dr Rashed Al Mahmud Titumir said the IMF, World Bank and US Treasury Department, among others, had acknowledged that the current government had inherited economic difficulties and high inflation.

The conflict in the Middle East had added to the pressure on the economy, he said.

They also said the current government was working sincerely to resolve the problems. As a result, the World Bank, IMF, US Treasury Department and other organisations have assured Bangladesh of their support.

According to Titumir, international financial institutions and US officials recognised the government's sincere efforts to address these challenges. As a result, the World Bank, IMF, US Treasury Department and other organisations had assured Bangladesh of their support, he said.

The government expects confirmation of the assistance within the next two to three months, he added.

DBH Finance PLC reported a 22% year-on-year decline in net profit for the July-September quarter of 2026, as a sharp drop in investment income from government securities offset a surge in net interest income.

According to a financial disclosure filed with the Dhaka Stock Exchange (DSE) today (14 October), the specialised housing finance institution posted a net profit of Tk25 crore in the third quarter ended 30 September 2026, down from the same period a year earlier.

Consequently, its quarterly earnings per share (EPS) fell to Tk1.24 from Tk1.60 in July-September 2025.

The decline in quarterly profit came despite a 91% surge in net interest income to Tk55.60 crore. However, income from investments in government securities plunged 76% to Tk8.38 crore during the three-month period, weighing on overall profitability.

Despite the third-quarter decline, the lender's cumulative performance for January-September 2026 remained positive. Net profit for the nine-month period rose 9% year-on-year to Tk80.76 crore, lifting EPS to Tk3.98 from Tk3.67 in the same period last year.

The company attributed the growth in cumulative earnings to a recovery in the capital market in 2026, which enabled it to reverse approximately Tk5.5 crore in provisions for investment impairment. Lower provisioning requirements against loans and advances compared with the same period last year also supported profitability.

Meanwhile, net operating cash flow per share turned negative at Tk4.51 in January-September 2026, compared with a positive Tk17.36 in the corresponding period of 2025, mainly due to a contraction in the deposit portfolio.

Net asset value per share rose to Tk52.03 as of 30 September 2026 from Tk49.55 on 31 December 2025.

Following the earnings announcement, DBH Finance shares fell 0.76% to close at Tk39.10 on the DSE today.