The investment incentive package proposed in the national budget for the 2026-27 fiscal sends a generally positive signal to both local and foreign investors, prominent economist Dr Selim Raihan said today.

Dr. Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM), noted that the fiscal measures could provide crucial stability at a time when private investment remains sluggish and business confidence is fragile.

“Keeping corporate tax rates unchanged may help reduce policy uncertainty at a time when private investment remains weak, financing costs are high, external sector pressures persist, and business confidence is fragile,” Dr. Raihan said while sharing his immediate reactions to the proposed budget.

The economist termed the proposed reduction in withholding taxes on interest payments for foreign loans and machinery leases a "sensible move."

He noted that this measure is poised to lower the cost of capital for industrial firms, making foreign-funded investments significantly more attractive.

Dr. Raihan also lauded the budget's focus on modernizing trade infrastructure.  In this connection, he held up the proposals for Free Trade Zones, higher caps on foreign ownership in off-docks and inland container depots (ICDs), and new frameworks for private investment in ports, terminals, and air cargo facilities as part of a growing recognition of logistics in international trade.

“For an economy seeking export diversification and deeper integration into global value chains after graduating from the Least Developed Country (LDC) category, efficient customs services, warehousing, ports, and logistics are critical to competitiveness,” he emphasized.