United News of Bangladesh

Finance Minister Amir Khosru Mahmud Chowdhury on Sunday informed Parliament that the total amount of default loans in nine state-owned banks stood at Tk 188,701.75 crore as of May 31 this year. Replying to a question from reserved seat Jamaat-e-Islami MP Sabikun Nahar during the question-answer session, the minister said the figure was based on data submitted by the banks to the Credit Information Bureau (CIB) database of Bangladesh Bank. The minister said the nine state-owned banks are Agrani Bank, Janata Bank, Rupali Bank, Sonali Bank, BASIC Bank, Bangladesh Development Bank, Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and Probashi Kallyan Bank. He said reducing the high level of default loans is essential to restoring discipline in the country's banking sector. Responding to a question from Jamaat MP Golam Rasul, the finance minister said the government's total outstanding debt stood at Tk 2,206,462 crore as of December 31. Of the total, external debt amounted to Tk 959,311 crore, while domestic debt stood at Tk 1,247,151 crore. Answering another question from Jamaat MP Shahjahan Chowdhury, Amir Khosru said the government repaid foreign loans worth US$4.65 billion during the 2025-26 fiscal year. Of the total, US$3 billion was repaid as principal and US$1.65 billion as interest. In reply to a question from Jamaat MP Mahbubul Alam, the minister said Bangladesh Bank has taken several initiatives to provide easier access to loans for young entrepreneurs. He said the central bank has increased the refinancing fund for new entrepreneurs in the cottage, micro and small enterprise sector from Tk 100 crore to Tk 500 crore. Under the scheme, new entrepreneurs can obtain collateral-free loans of up to Tk 10 lakh at a maximum interest rate of 7 percent, while loans of up to Tk 35 lakh are available against collateral. Replying to a question from reserved seat MP Nilufar Chowdhury Moni, the minister said outstanding customs duties and taxes on imported goods collected by various customs houses under the National Board of Revenue over the past five years amounted to Tk 25,504.3 crore. He added that out of Tk 3,912 crore payable by Bangladesh Petroleum Corporation, Chattogram Custom House had recovered Tk 590 crore by June this year. Responding to a question from Dhaka-18 MP SM Jahangir Hossain, the finance minister said the government had decided to waive agricultural loans of up to Tk 10,000, including interest, for farmers across the country covering crops, livestock, fisheries and other agricultural activities. Under the programme, banks had received Tk 1,352.74 crore from the government by July 2 to settle dues for 1,434,482 farmers, he said. In reply to Nilphamari-4 MP Abdul Muntakim, the minister said Bangladesh Bank's regulations stipulate that a bank's fixed assets cannot exceed 30 percent of its paid-up capital. As Sonali Bank's fixed assets are already significantly higher than the prescribed limit, the bank is currently unable to purchase additional fixed assets or construct new buildings, he added. Answering a question from Cumilla-9 MP Abul Kalam, the finance minister said discussions between the Economic Relations Division and the World Bank are underway to prepare the financing pipeline for the 2026-27 fiscal year. He said budget support remains one of the World Bank's financing instruments for Bangladesh, and the government's requirement and target for such support in FY2026-27 will be determined following consultations with the relevant stakeholders. The government will decide the sectors in which any budget support funds will be utilised based on national priorities.

Finance Minister Amir Khosru Mahmud Chowdhury on Wednesday assured that depositors of the country's troubled five banks will receive their money back in full, along with interest, and categorically ruled out any "haircut" on deposits. Responding to a notice from BNP reserved-seat MP Rahana Akter Ranu, he acknowledged the hardship faced by millions of depositors, describing the banking crisis as "a heartbreaking situation" inherited by the government. "I have already said in Parliament that all depositors will get their deposits back with interest, Insha-Allah. However, they will have to be a little patient," the minister said. He said the affected banks are operating at heavy losses, making it difficult to repay depositors immediately while also paying interest. "These banks are all running at a loss, and those losses are increasing every day. You have to understand how difficult it is for a loss-making bank that cannot even return deposits to also pay interest. Even so, an elected government is committed to protecting the interests of the people," he told the House. Khosru gave an unequivocal assurance that depositors will not face any reduction in the value of their savings. "There will be no haircut. The question of a haircut does not arise," he said, responding to concerns raised by the BNP lawmaker. He acknowledged the severe human suffering caused by the crisis, noting that many depositors are unable to pay for medical treatment or arrange family necessities because their savings remain inaccessible. "I know people cannot afford to wait. Some are dying without treatment, while others cannot arrange their daughters' marriages. I face these problems every day," the minister said. He, however, cautioned that resolving the crisis will require a medium- to long-term approach. "It will take some time, but I can assure you that depositors will receive their money back with interest," he added. Khosru outlined the government's banking sector recovery strategy, saying a comprehensive resolution framework has been established under the Bank Resolution Act, 2026 to restore stability in the financial sector. Under the framework, five troubled Islamic banks – Export Import Bank of Bangladesh (EXIM Bank), First Security Islami Bank, Global Islami Bank, Social Islami Bank and Union Bank – have been merged into a new entity named Combined Islami Bank PLC, which he described as the most significant resolution measure undertaken so far. The minister said the merger has protected the interests and claims of all depositors of the five banks. He also noted that the Deposit Protection Act, 2026 has doubled the insured deposit limit from Tk 100,000 to Tk 200,000 and extended deposit protection to finance companies, which were previously outside the scheme. According to Khosru, depositors of banks under resolution are already receiving their money in phases in line with Bangladesh Bank's resolution scheme. He said special forensic audits are underway to identify those responsible for loan irregularities in the five banks, with asset recovery measures to follow based on the audit findings. The minister added that Section 57 of the Bank Resolution Act empowers Bangladesh Bank to seize and control assets, income and property acquired through misappropriated bank funds, enabling authorities to recover money through asset sales and auctions. He also said the government has launched civil as well as criminal proceedings to recover defaulted loans and repatriate funds allegedly laundered abroad. Around 30 affected banks have initiated the process of appointing nine international legal firms on a "no win, no fee" basis after signing non-disclosure agreements to pursue recovery of overseas assets, Khosru said. Among 11 priority cases, civil proceedings have already begun against business groups and individuals, including S Alam, Beximco, Sikder Group, Nassa Group and Orient Group, he added. During the debate, Rahana Akter Ranu welcomed the government's commitment but expressed concern that auctioning domestic assets alone will not be sufficient, claiming those responsible had siphoned off amounts many times greater than the value of their assets in Bangladesh. She also urged the government to formally withdraw any proposal for a "haircut" on deposits, arguing that the burden of bank fraud should not fall on innocent depositors who had trusted the banking system with their savings. The BNP lawmaker referred to demonstrations by depositors outside the finance minister's residence in Chattogram and said about 75 lakh customers were anxiously waiting for the return of their money. She demanded that those responsible for looting banks be brought back to Bangladesh and compelled to repay the stolen funds.

The government has incorporated a series of special measures in the national budget to address potential external pressures arising from global economic uncertainty, the conflict in the Middle East and other external risks, Finance Minister Amir Khosru Mahmud Chowdhury told Parliament on Wednesday. Responding to a tabled question from ruling party lawmaker Md Jalal Uddin elected from Chandpur-2, the minister said the government has adopted a comprehensive strategy to safeguard macroeconomic stability and strengthen the country's resilience against external shocks. He said the first priority is maintaining stability in the external sector through export diversification and export growth, expansion of remittance inflows and control of non-essential imports to preserve balance in external transactions. The government is also placing emphasis on strengthening foreign exchange reserves to ensure greater stability in the exchange rate of the taka, he added. Addressing concerns over the Middle East crisis, the finance minister said the budget includes measures to tackle potential increases in international prices of fuel, liquefied natural gas (LNG) and fertiliser. These measures include diversifying energy sources, intensifying domestic gas exploration, improving power and energy supply systems and continuing subsidy support where necessary, he said. The minister also highlighted the government's 3R Strategy—Recovery and Stabilisation, Restoration, and Reconstruction for Acceleration—to manage external risks. Under the recovery phase, the focus is on maintaining macroeconomic stability; the restoration phase aims at export diversification and strengthening the external sector; while the reconstruction phase seeks to build a more productive and competitive economy, he said. The finance minister noted that the Middle East remains the principal destination for Bangladeshi migrant workers as prolonged instability in the region could affect overseas employment opportunities and remittance inflows. To mitigate such risks, the government is placing special emphasis on creating new overseas labour markets. Initiatives have already been taken to sign bilateral agreements with countries including Russia, Portugal, Romania, Brazil, Greece, Serbia and North Macedonia as alternative destinations for Bangladeshi workers. In addition, efforts have begun to reopen labour markets in Malaysia, Oman, United Arab Emirates and Kuwait, which had remained largely closed for an extended period. The minister further said the government will continue providing a 2.5 per cent incentive on remittances sent through legal channels and has adopted precautionary measures to address any emerging pressures on the external sector.

The government plans to bring several business sectors including grocery shops and beauty parlours under the Value Added Tax (VAT) net in the 2026–27 fiscal year, Finance Minister Amir Khosru Mahmud Chowdhury told Parliament on Wednesday. The minister disclosed the plan while responding to a tabled question from reserved-seat lawmaker Selina Sultana. The  finance minister said  the sectors being considered for inclusion in the VAT framework include garment and clothing retailers, confectionery businesses, cosmetics shops, sellers of plastic and ceramic household products, footwear outlets, hardware stores, decorators, and retailers of mobile phones, air conditioners, refrigerators, ovens and other electronic goods. The proposed expansion of the VAT net would also cover paint and hardware businesses, sanitary ware and fittings shops, tile retailers, corrugated sheet outlets, rod and cement traders, furniture businesses, sweetmeat shops and restaurants. The move is part of the government's broader efforts to widen the tax base and enhance domestic revenue mobilisation. The minister also informed Parliament that the government collected Tk 141,586 crore in VAT revenue during the 2024–25 fiscal year.

Finance Minister Amir Khosru Mahmud Chowdhury on Sunday said the government will overhaul its public finance architecture to fund the proposed budget for the fiscal year 2026-27 while minimising debt burden on the economy. “We cannot keep looking towards the World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB). We need to restructure our own public financing,” he said while speaking at the “CPD Budget Dialogue 2026” organised by the Centre for Policy Dialogue (CPD) at a city hotel. The minister said the government is working to develop alternative financing channels and will introduce market-based financing mechanisms for budget funding. He noted that the gap between multilateral financing rates and market interest rates is narrowing, making borrowing costs considerably higher and leaving little option but to rely on market-based instruments. Announcing a phased withdrawal from local bank borrowing, Khosru said local banks are charging 12-14 percent interest, a burden that even the private sector struggles to bear. “It is simply not feasible for the government to sustain such borrowing costs.” On broader economic challenges, he highlighted that the Middle East labour market, worth $4 billion, is facing headwinds, and that the government inherited hundreds of crores of taka in outstanding bills across every sector upon taking office. The minister also noted the government got only one and a half months to prepare a budget that normally takes six months. He said the government inherited 1,300 projects from the previous administration, many conceived to serve personal interests, and that a number of schemes have since been cancelled or repurposed. Projects that were 80 percent complete were being finished despite uncertain returns. To ensure accountability, Khosru announced that an ADP dashboard will go live in the first week of July, allowing real-time tracking of project progress and implementation status. On trade facilitation, he said Bangladesh will gradually move away from the letter of credit (LC) system towards direct payment mechanisms for import-export, in line with global practice, allowing credible businesses to trade internationally without opening LCs. About education, the minister said the allocation will be raised to 5 percent of the ADP by the end of the government's current term, up from the current 2 percent. He stressed that vocational training will receive the strongest emphasis this year, citing China's model, where 60 percent of students pursue vocational education after secondary school. “Bangladesh's certificates hold little value in the job market because skills are absent. Vocational training is how we bridge that gap.” On health, Khosru said the government is working towards establishing universal healthcare, with preventive healthcare as the first priority. Addressing questions over the Family Card programme, he said 72,000 people have already received cards under a pilot project, which he described as the largest social protection initiative in Bangladesh's history. The minister said the selection process has been deliberately kept free of political interference, with a new formula developed to ensure fairness at both local and central levels. He acknowledged a roughly 1-1.5 percent error rate and said the government is actively working to identify and resolve the causes. Khosru reaffirmed the government's commitment to carrying out all necessary economic reforms during its tenure.

Finance Minister Amir Khosru Mahmud Chowdhury has said the government expects inflationary pressures to ease gradually through structural reforms aimed at reducing the cost of doing business, improving efficiency and strengthening supply chains. “Inflation in Bangladesh is not a short-term phenomenon but the result of several years of accumulated pressures, compounded by global conflicts, rising import costs and weaknesses in the banking sector,” he said today (Friday), while addressing a post-budget press conference at the Osmani Memorial Auditorium. The finance minister, who presented his first budget yesterday, noted that inflation has remained above 9 percent for the past three years. External factors, including conflicts in the Middle East, have pushed up global commodity prices, while capital shortages in banks caused by loan defaults, fraud and money laundering have increased the cost of funds. He said that imported goods had become more expensive due to global developments and that Bangladesh had limited control over such external inflationary pressures. However, the government could reduce domestic inflation by lowering business costs through deregulation, administrative reforms and improved efficiency, he said. According to Amir Khosru, businesses in Bangladesh face excessive costs due to lengthy approval processes, bureaucratic delays, high borrowing costs, inefficiencies at ports and weaknesses in taxation and regulatory systems. “Inflation cannot be controlled by deploying police, regulatory agencies or government officials in markets. It has to be managed through sound policies and efficient administration,” he said. The newly elected BNP government's first budget set an inflation target of 7.5% for the next fiscal, against a GDP growth expectation of 6.5%. Khosru said the government would focus on improving ease of doing business, reducing unnecessary regulations and ensuring greater transparency across public institutions. He added that reforms in ports, logistics and procurement systems would also help lower costs. The finance minister stressed the need for long-term procurement planning, saying Bangladesh should maintain strategic reserves of fuel, food and fertiliser to reduce vulnerability to global market shocks. Referring to energy imports, he criticised past reliance on spot purchases and said the government intended to pursue longer-term procurement arrangements to secure better prices and ensure energy security. On the government’s decision to increase salaries for public servants, Khosru said the move was necessary to address rising living costs after years without significant adjustments. “When people face financial hardship, the tendency towards corruption increases. Improved salaries should help reduce that pressure while ensuring a better standard of living for government employees,” he said. The finance minister also highlighted employment generation as a central objective of the budget, saying investments in education, skills development and private-sector growth would help create jobs both at home and abroad. He said the government had placed particular emphasis on vocational education, reskilling and upskilling programmes to improve employability, especially among young people and educated jobseekers. “Investment means employment. Our focus is on creating demand for jobs through increased investment and improved skills,” he said. Khosru said the budget represented a shift from traditional approaches and reflected changing global economic realities. He reiterated the government’s commitment to reducing dependence on domestic bank borrowing, which he said often crowded out private-sector lending. He noted that planned borrowing from local banks had already been reduced compared with the previous fiscal year and that the government would continue this trend in the coming years. The minister also defended the budget’s emphasis on social protection programmes, saying the largest investments were being made in initiatives designed to support low-income and vulnerable groups. Programmes such as the Family Card, support for farmers, universal healthcare and preventive healthcare services were aimed at improving living standards while preparing beneficiaries for better employment opportunities, he said. Khosru placed special emphasis on the government’s proposed “creative economy” initiative, which seeks to integrate artisans, cultural workers, performers and rural entrepreneurs into the mainstream economy. He said the programme would provide financing, training, design support and market access to traditional craftsmen, weavers, potters, musicians and other creative workers whose contributions had long remained outside formal economic planning. The minister said the government had allocated Tk 800 crore to launch creative economy initiatives, including creative centres, cultural districts, tourism-linked projects and heritage restoration programmes. “Our objective is to monetise culture and creativity so that artists, craftsmen and performers can improve their livelihoods while contributing to economic growth,” he said. Khosru also said the government was reviewing outdated mouza land valuation rates, which are often significantly below market prices, to curb opportunities for whitening undisclosed income through property transactions. A committee has been formed to revise mouza rates and bring them closer to actual market values, although he acknowledged that the exercise would require a nationwide survey and could not be completed before the budget. Responding to concerns about implementation, the finance minister said the government would establish a high-powered task force and an online complaint platform to monitor reform measures and ensure accountability. “No one will be exempt from scrutiny if delays or violations occur. We are committed to implementation,” he said. Earlier, in his opening remarks, Khosru described the budget as an “inclusive” one prepared under exceptional circumstances within less than two months of the new government’s formation. He said the budget sought to move away from what he described as a patronage-based economic model and instead promote “economic democratisation” by extending opportunities to all sections of society. The minister said the government inherited an economy weakened by institutional erosion, financial mismanagement and global economic uncertainty, making budget preparation particularly challenging. He added that future public spending and development projects would be evaluated on four key criteria: value for money, return on investment, job creation and environmental sustainability. “The budget is for all Bangladeshis. No group, profession or community has been left outside its scope,” he said.

Finance Minister Amir Khosru Mahmud Chowdhury on Thursday placed the budget for the 2026-27 fiscal with a call for national unity, inclusive development, and continued reform-driven progress, emphasising the collective role of citizens from all walks of life in building a prosperous Bangladesh. This is the first budget of the BNP government after winning the February 2026 election. Amir Khosru Mahmud Chowdhury as the Finance Minister delivered his maiden budget speech under the theme ‘Journey Towards a Democratic, Humane and Inclusive Economy’. In the course of his nearly 4-hour budget speech, Amir Khosru, dressed in a dark grey suit paired with dark blue tie, repeatedly urged lawmakers and citizens including farmers, workers, students, women, youth, and expatriates to strengthen cooperation in achieving the country’s development aspirations. The finance minister took just two short breaks - that too for the Asr and Maghrib prayers.  He disclosed the government's vision to reduce inflation to 7.5 percent and raise GDP growth to 6.5 percent in the coming fiscal (2026-27). For this, Khosru said he wants to rely on inclusive development, quality education and healthcare for all, universal social protection, an economy driven by investment, employment, and production. He said he wants to step up deregulation and present a cost-effective, simplified business environment, financial sector stability, energy security, digital transformation and ICT development, management of life, nature, environment, and water resources and transparent, efficient, and accountable institutions and administrative systems. The address highlighted that Bangladesh’s progress depends on the sustained implementation of electoral commitments, bold reform initiatives, and a united national effort. “We firmly believe that through continued implementation of our electoral commitments, bold reform initiatives, and a united national effort, Bangladesh will advance steadily toward its development aspirations,” the Finance Minister said. He said that it underscored the vision of building a society where equal opportunities are accessible to all, enterprise and innovation are encouraged, and the rewards of hard work are ensured, with the benefits of economic growth shared broadly among citizens. “Our commitment is to build a Bangladesh where equal opportunities are available to all… through economic democratisation, deregulation, and the empowerment of the people, we shall build a prosperous and confident Bangladesh, InshaAllah,” he added. Highlighting the importance of human capital, he said the strength, creativity, and entrepreneurial spirit of people remain the nation’s greatest asset. The proposed national budget for the 2026–27 fiscal year has been framed with a strong emphasis on economic stability, investment, production, employment generation and building a more equitable society. The government has set out an ambitious long-term vision of transforming the economy into a USD 1 trillion economy by 2034 through sustained and stable economic growth, driven by what it describes as “economic democratisation”, aimed at ensuring financial recovery and welfare for all citizens. The budget claims to prioritise a shift away from debt-dependent growth towards a production- and private investment-led economic model. In the medium term, efforts will be made to increase revenue collection, maintain budget deficits at sustainable levels, and restore discipline in debt management, with the aim of improving the country’s credit rating from moderate to low risk. The budget deficit has been targeted at 3.6 percent of GDP, which will help keep borrowing risks at a manageable level.To encourage private sector investment, government borrowing from the banking sector will be gradually reduced. At the same time, the government planned to diversify and strengthen the bond market through the introduction and expansion of corporate bonds and municipal bonds, thereby easing pressure on the banking system. For the 2026–27 fiscal year, total revenue collection has been projected at Tk 6,95,000 crore, equivalent to 10.2 percent of GDP. Of this, Tk 6,04,000 crore is expected to come from the National Board of Revenue (NBR), i.e. tax collection. The tax-to-GDP ratio fell below 7 percent in FY2024–25, and the government said efforts will be made to significantly increase it in the coming years. The total outlay proposed, or budget size, clocks a hefty Tk 9,38,000 crore, covering both operational and development spending - signaling a return to the expansionary fiscal policy that characterised much of the deposed Awami League government's tenure from 2009-24.  The interim government led by Dr Muhammad Yunus bucked that trend, as Finance Adviser Dr. Salehuddin Ahmed unveiled a Tk 7,90,000 crore national budget for the 2025–26 fiscal, marking a rare contraction of about 1% from the previous year's outlay. If Khosru's proposed budget is passed without any major changes, it would mark an 18% jump over the current year's budget. One of the most significant points of departure between the two is the return to a much larger Annual Development Programme. Operational expenditure includes subsidies, interest payments on public debt, procurement of capital equipment, food accounts, and administrative costs including advances to employees and state-owned enterprises. The development budget, which is mainly made up of the ADP but includes some non-ADP schemes as well, stands at Tk 3,16,075 crore - nearly a third of the total outlay.  Priority has been given to investment-led and sustainable development initiatives. In line with the party's promises on the campaign trail, the allocations for education and health have been significantly ramped up with a view to improve human capital development. Education sector has been allocated around 2 percent of GDP, amounting to Tk 1,36,606 crore, compared to Tk 87,206 crore in the current fiscal year (1.39 percent of GDP). The allocation spans multiple ministries beyond education including technical and vocational institutions under different sectors such as textiles, railways, defence, agriculture, fisheries, and ICT. Similarly, the health sector's allocation has been increased to Tk 69,409 crore, equivalent to 1.01 percent of GDP, up from 0.58 percent in the current fiscal year. The allocation includes spending by various ministries and agencies, including local government bodies, the Islamic Foundation, police-run hospitals, and social welfare institutions. The government has indicated a plan to gradually raise combined education and health spending to 5 percent of GDP in the future.

Finance Minister Amir Khosru Mahmud Chowdhury on Thursday said prolonged instability in the Middle East may adversely affect employment opportunities abroad, income flows, and the continuity of remittance inflows. If this trend persists, the Finance Minister said it may emerge as a matter of serious concern for the external sector and labour market stability. He said although remittance receipts have not yet shown any negative impact, early signs of pressure are being observed in manpower deployment. For instance, he said, while around 95,000 workers departed for overseas employment in January 2026, this number declined to around 44,000 in March. Unveiling the national budget for the fiscal year 2026-27 in Parliament, the Finance Minister said the Middle East remains the most significant destination for Bangladesh’s migrant workforce. He said the reality of today’s global economy is that uncertainty is no longer an exception; rather, it has become a permanent feature of economic management, a ‘Neo-Normal’. War, volatility in energy markets, fluctuations in global interest rates, changes in trade policies, and disruptions in supply chains - any one of these can quickly place significant pressure on an import-dependent economy such as ours, he said. In this context, the Finance Minister said their objective is to manage the economy in such a way that minimizes the impact of external shocks on domestic macroeconomic stability, ensuring resilience and continuity in growth and development.

Finance Minister Amir Khosru Mahmud Chowdhury is preparing to unveil the Tk 9.38 lakh crore national budget for Fiscal Year 2026-27 on June 11, while the newly formed government faces some big challenges. Tasked with financing an ambitious economic recovery plan, policymakers are trapped between a fragile macroeconomic landscape inherited from previous administrations and structural vulnerabilities that threaten to push the nation into a debt trap. The upcoming budget faces a near-impossible revenue challenge. A deep dive into the country's financial state reveals that the government's ability to fund its spending is being severely squeezed from five distinct pressure points. The Revenue Shortfall: The primary engine of budget funding—tax collection—has effectively stalled. According to data from the Centre for Policy Dialogue (CPD), the National Board of Revenue (NBR) suffered a staggering shortfall of Tk 1.04 lakh crore during the July-April period of the outgoing fiscal year FY 2025-26. "Meeting the annual revenue target would now require an impossible growth rate of over 128 percent in the final two months," stated Dr. Fahmida Khatun, Executive Director of CPD. Bangladesh's revenue-to-GDP ratio hovers under 8 percent, one of the lowest in Asia, leaving the state heavily reliant on bank borrowing to plug a widening budget deficit. A Crippled Banking Sector and Toxic Loans: The government's traditional safety net—borrowing from local commercial banks—is running thin due to deep banking sector fragility. “Decades of poor governance, political cronyism, and unmitigated loan rescheduling have pushed the non-performing loan (NPL) ratio to a historic 30.6 percent,” said Dr. Zahid Hussain, a prominent Bangladeshi economist and the former Lead Economist at the World Bank’s Dhaka office. With billions of taka trapped in default loans, local banks are facing severe liquidity crunches. Economists warn that the government’s excessive domestic borrowing—which reached 98.5 percent of its full-year target by March 2026—risks completely "crowding out" private sector credit, starving legitimate businesses of capital, he pointed out. Starved Investment and Low FDI: Investor confidence in Bangladesh has cooled significantly due to regulatory unpredictability, energy shortages, and political transitions. Foreign Direct Investment (FDI) remains critically low, while private-sector credit growth dropped by over 6 percent year-on-year, said Dr. Fahmida. Compounding this crisis is the looming shadow of November 2026, when Bangladesh is scheduled to graduate from Least Developed Country (LDC) status. “Graduation means losing vital preferential tariff access for the Ready-Made Garments (RMG) sector, which is already seeing negative export growth trends. Without a rapid injection of local and foreign investment, funding structural growth will be unsustainable,” she opined. Global Shocks and Crushing Energy Prices: External shocks, particularly regional conflicts in the Middle East, have heavily disrupted global energy supply chains. Bangladesh has been forced to buy liquefied natural gas (LNG) from the spot market at nearly two-and-a-half times its usual price, said Dr Khondaker Golam Moazzem, a prominent industrial economist in Bangladesh who also serves as the Research Director at the Centre for Policy Dialogue (CPD). The government has earmarked an enormous US $3.5 billion purely for electricity and LNG subsidies in the upcoming budget. While retail power tariffs were recently hiked by Tk 1.52 per kWh to offset costs, these soaring energy bills are draining precious foreign exchange reserves and eating up fiscal space that should have gone toward infrastructure development, he said. Stagnant Wages and Surging Unemployment: On the human front, the economic slowdown has manifested as a severe employment crisis. Real GDP growth has slowed to roughly 3.9 percent, a sharp drop that has severely limited the creation of formal, well-paying jobs. With inflation stubbornly high at over 9 percent, low-income workers are seeing their purchasing power rapidly erode, said Dr. Zahid Hussain. The national poverty rate rose to 21.4 percent. Consequently, the government is being forced to expand costly social safety net programs, such as the Family Card cash-transfer scheme to 40.1 lakh households, adding further strain to an empty treasury, he said. "Resilience has underpinned Bangladesh's growth story," noted Jean Pesme, World Bank Country Director. "But without decisive, bold structural reforms in revenue mobilization and the financial sector, this resilience cannot last." As June 11 approaches, the Finance Minister faces a clear ultimatum from the country's top economic analysts: the FY2026-27 budget cannot rely on the old formula of printing money or heavy bank borrowing. To keep the economy afloat, the new government must focus on restoring governance to the banks, cutting bureaucratic waste, and radically restructuring how it collects revenue.  

Finance Minister Amir Khosru Mahmud Chowdhury on Tuesday said the government is completely restructuring the Securities and Exchange Commission (SEC) with a new leadership team selected independently on the basis of professional expertise, as part ofbroader efforts to restore confidence in Bangladesh’s capital market. He said the reconstituted commission, comprising a chairman and four commissioners, would be announced within the next two weeks. “We are completely reorganising the Securities and Exchange Commission. Within the next two weeks, people will know about the new team,” the finance minister said while speaking at a pre-budget discussion organised by the Economic Reporters’ Forum at its office auditorium. Emphasising the independence of the selection process, Khosru said the appointments were made without political considerations. “No politician’s opinion was taken into account. The selection has been made independently. We have chosen professionals who understand the market and have experience in capital market-related activities,” he said. The finance minister expressed optimism that the new leadership would help restore investor confidence and attract greater domestic and international interest in Bangladesh’s stock market. According to him, the government is also amending relevant laws and regulations to create a more transparent and investor-friendly market environment. “We are already receiving international interest. We are changing the laws and regulations. Many good companies are now approaching us and expressing interest in becoming listed,” he said. Khosru noted that a number of companies had previously been reluctant to enter the stock market due to concerns over governance and market integrity. “Many companies used to say they wanted to be listed on a stock exchange, not in what they considered a casino. We are changing that perception,” he said. The finance minister said the government’s objective is to transform the capital market into a credible source of long-term financing for businesses, reducing excessive dependence on the banking sector. He observed that banks are currently under pressure as they collect largely short-term deposits but provide long-term loans, creating structural challenges in financing large investment projects. “Companies should be able to raise funds from the stock market and issue bonds. This will reduce pressure on banks,” he said. Khosru also pointed to the high lending rates in the banking sector, saying they are creating difficulties for businesses seeking large-scale financing. “At present, lending rates of 12 to 13 per cent are not feasible for many businesses. When companies need financing of Tk 500 crore or Tk 2,000 crore, banks face challenges because deposits are mostly short-term while lending requirements are long-term,” he said. Highlighting the importance of a vibrant capital market in supporting economic growth, the finance minister said strengthening the stock market is essential for ensuring sustainable financing of private-sector investment. “The capital market has to function properly. Inshallah, it will become functional in no time. I can assure you that we are working to make it effective,” he said. He also encouraged companies and investors to participate more actively in the market as reforms are implemented, expressing confidence that the planned changes would help establish a stronger and more efficient financial ecosystem in Bangladesh.