United News of Bangladesh

Rice alone contributed about 47 percent of total food inflation in October while vegetables posted a strong negative impact because of seasonal abundance, according to the latest Economic Update and Outlook for November 2025 prepared by the General Economics Division (GED). Protein items including beef, chicken and fish saw steady inflation during the month, driven by feed prices and transport costs, the report said. Overall inflation dropped to 8.17 percent in October 2025, from 10.87 percent a year earlier, driven almost entirely by a sharp fall in food inflation. Food inflation plunged from 12.66 percent in October 2024 to 7.08 percent in October 2025 as rice supply improved due to the Aman harvest, imports and public procurement. Read more: High price of rice in Bangladesh bucks the trend of easing inflation However, non-food inflation inched up to 9.13 percent, reflecting persistent pressure in housing, transport and healthcare—an indication that inflation remains far from under control. Election-related spending and possible disruptions during the transition are expected to add further pressure on inflation and the foreign exchange market, complicating stabilisation efforts, said the report. The report warns that large-scale dollar purchases by the central bank unless sterilized could fuel inflation and distort market-based exchange rate mechanisms. Bangladesh’s economic recovery depend heavily on political stability following the February national election and the next government’s willingness to carry out meaningful reforms, said the GED reprot. The report offers a cautiously optimistic view but warns that deep structural weaknesses along with the political transition period could constrain economic momentum. According to the analysis, the economy could regain pace if the election produces a clear political direction and the next government decisively undertakes long-delayed reforms, particularly in improving the business climate, stabilising the banking system, and ensuring fiscal and energy security. Without such reforms, the recovery may be short-lived, it said. Read more: Bangladesh economy in ‘waiting vortex’; experts urge credible elections The Asian Development Bank (ADB) has forecast around 5 percent GDP growth for FY26 following a sluggish period. Remittances and garment exports continue to provide much-needed resilience but the GED notes that the broader economic environment remains fragile as both investors and entrepreneurs appear to be “waiting” for political stability before committing to new ventures.= While bank deposits grew at nearly double-digit rates through August and September, private-sector credit growth fell to just 6.29 percent—the lowest in at least four years and well below the Bangladesh Bank’s FY26 target of 7.2 percent. High lending rates, cautious bank behaviour and political uncertainty have depressed investment appetite. Meanwhile, government borrowing from commercial banks surged 24.45 percent in September, raising concerns about crowding out private borrowers. Interest rate spreads also exposed deep structural distortions. Foreign commercial banks maintained spreads close to 9 percent—far higher than state-owned and private banks—highlighting issues such as high operational costs, non-performing loans and market concentration. Rising rice prices push food inflation higher in Bangladesh: Report Revenue collection in October 2025 fell short of the target by Tk 8,324 crore, achieving only 77.37 percent of the month’s goal. All major revenue streams—import duties, domestic VAT, and income tax—underperformed. Although collection was slightly higher than in October 2024, the growth of just 2.2 percent was described as “pessimistic” given inflationary pressures and increased public spending needs. ADP utilisation continues to lag despite marginal improvements. Up to October, utilisation stood at 8.33 percent, only a slight increase from 7.90 percent last year. Lower overall allocations and reduced spending under own-financing components indicate financial strain and weak project execution. The report notes that while utilisation rates improved marginally in some categories, the decline in total expenditure—from Tk 8,762 crore last year to Tk 7,720 crore this year—reflects ongoing bottlenecks in planning, fund release and implementation. Foreign exchange reserves improved significantly, rising from USD 24.35 billion in November 2024 to USD 32.34 billion in October 2025. BPM6 reserves also rose sharply, supported by stronger remittances and prudent reserve management. Bangladesh’s June inflation remains high with food inflation at 10.42% Remittances surged in the first four months of FY26, with each month outperforming the previous year and September recording the highest inflows. However, export earnings remained volatile. Exports peaked in July at USD 4.77 billion but suffered sharp declines in April and June. RMG exports mirrored these fluctuations, while non-RMG exports also experienced mid-year downturns. Imports especially capital machinery saw steep contractions year-on-year, signalling depressed investment demand. A slight month-on-month recovery in August and September suggests only tentative stabilisation. The real effective exchange rate (REER) appreciated notably, indicating eroding external competitiveness. Read more: Inflation in Bangladesh edges up to 8.36% in September

Bangladesh’s economy is caught in a debilitating ‘waiting vortex’ of stagnant investment, high inflation and weak business confidence, with experts saying only a credible and participatory election can restore stability and drive recovery. The prevailing consensus across the business and policy landscape is that the economy is currently ‘breathing, but unable to walk’ as it is paralysed by political uncertainty ahead of the general election expected next February. Business owners and entrepreneurs unanimously assert that new initiatives and investments are impossible without political stability and certainty. Professor Rashed Al Mahmud Titumir of Dhaka University, Liaquat Ali Bhuiyan, Senior Vice-President of the Real Estate and Housing Association of Bangladesh (REHAB), Inamul Haq Khan, Senior Vice-President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Anwar-ul-Alam Chowdhury (Parvez), President of the Bangladesh Chamber of Industries (BCI), and former Chief Economist of Bangladesh Bank Dr Mustofa K Mujeri talked to the UNB correspondent about the current economic situation in Bangladesh. Read more: Bangladesh’s reserves still remain above $31 billion after ACU payment The economy is sustained by political trust, and it is the government’s responsibility to restore that confidence, said economists, underscoring that without a stable political environment, the recovery process cannot begin. This sentiment is echoed by the country’s development partners. The International Monetary Fund (IMF) has reportedly linked the disbursement of the next tranche of its $4.7 billion loan to the formation of an elected government. Similarly, both domestic and foreign investors are reluctant to take risks, preferring instead to adopt a cautious ‘wait-and-see’ stance. Worrying Economic Indicators Private Sector Credit Growth: Loan growth to the private sector has dropped to around 6.5 per cent — roughly half the normal rate — signalling a sharp contraction in new business activity and entrepreneurship. Capital Machinery Imports: Imports of capital machinery, a key indicator of future industrial output, have declined by 25 per cent, casting a shadow over upcoming production and employment prospects. Inflation and Savings: Inflation has been persistently high, hitting 8.36 per cent in September 2025, hitting hard the purchasing power of ordinary citizens, with the sales of national savings certificates falling by over Tk 6,000 crore, making it clear that many are being forced to liquidate their savings. Foreign Investment: Foreign Direct Investment (FDI) fell by 22 per cent in the first quarter of the current fiscal year, as international investors remain cautious — with some existing firms even scaling back their operations. Govt moves to make SMEs a driving force of economy: CA’s office “Investment is now not just an economic question, but a question of social confidence,” one analyst observed, noting that political instability and deteriorating law and order are heavily discouraging entrepreneurs. Social Costs and Unemployment The economic stagnation is inflicting a deep social toll, with experts warning of rising poverty and worsening unemployment. Professor Titumir cautioned that high inflation has “reduced the purchasing power of the common people, increased poverty, and may push another 30 lakh people below the extreme poverty line.” The country now faces a mounting unemployment crisis, with around 13 lakh jobless youths — including one in every three university graduates. Industry Leaders Demand Clarity Business leaders across key sectors have emphasised the urgent need to restore political and policy clarity. Liaquat Ali Bhuiyan said that new investment in manufacturing, real estate, banking, and services has “nearly stopped.” Inamul Haq Khan noted that foreign buyers and partners, including the IMF, have little confidence in a temporary setup. Dhaka’s economy driven by manufacturing sector with 56% share: DCCI “IMF and foreign stakeholders are waiting for the new government. Only then will confidence and investment surge,” he added. Path to Recovery Economists argue that the top priority for the current interim administration must be to hold a swift, credible, and widely accepted national election, paving the way for an elected government to take charge. Anwar-ul-Alam Chowdhury (Parvez) told UNB that clarity on the election timeline and assurance of a peaceful process are the most crucial prerequisites for restoring economic stability. Dr Mustofa K Mujeri observed that the economic environment will remain fragile as long as high interest rates persist and political uncertainty continues to limit capital flow. Ultimately, analysts suggest that the nation stands at a “historic juncture,” where it must either accept the current stagnation or move decisively towards a new economic model anchored in political stability and trust. Read more: IMF to decide Bangladesh’s next loan installment after formation of political govt: Adviser

The point-to-point inflation in Bangladesh edged up slightly to 8.36 percent in September, from 8.29 percent in August. According to data released by the Bangladesh Bureau of Statistics (BBS) on Monday, the rate was significantly higher at 9.92 percent during the same month last year. Inflation has now remained above 8 percent for more than three years since August 2022. The BBS data shows that both food and non-food inflation increased in September. Food inflation rose to 7.64 percent from 7.60 percent in August, while non-food inflation climbed to 8.98 percent from 8.90 percent. Inflation falls to 8.29% in August, lowest in over 3 years A year earlier, in September 2024, food inflation stood at 10.40 percent and non-food inflation at 9.50 percent. Rural areas experienced slightly higher inflationary pressure than urban areas last month. Rural inflation rose to 8.47 percent in September from 8.39 percent in August. In the same month last year, it was 10.15 percent. In rural regions, food inflation edged up to 7.54 percent from 7.50 percent, while non-food inflation increased to 9.40 percent from 9.28 percent. In urban areas, overall inflation inched up to 8.28 percent in September from 8.24 percent the previous month. Urban food inflation rose to 7.94 percent from 7.87 percent, while non-food inflation moved slightly higher to 8.51 percent from 8.49 percent. Meanwhile, the BBS data shows that the general wage growth rate slipped to 8.02 percent in September from 8.15 percent in August. In September last year, the rate was 8.01 percent — marking the 44th consecutive month that wage growth has trailed behind inflation.  

Bangladesh’s economic outlook for August 2025 shows signs of stabilisation on the external front but troubling weaknesses in domestic investment, revenue collection and development spending, according to a government report. The latest monthly economic update by the General Economics Division (GED) under the Planning Ministry said inflation declined to 8.29 percent in August, the lowest since July 2022, after months of volatility that saw double-digit inflation from July to December 2024. Non-food inflation dropped below 9 percent for the first time in 20 months, helping offset a marginal rise in food prices. Food inflation stabilised at 7.6 percent for three consecutive months, a sharp improvement from the 14 percent peak in July 2024. Rice remains the single largest driver of food inflation, contributing 48.37 percent in August. Government procurement of 1.7 million tons of Boro rice, imports of half a million tons duty-free and higher distribution under public food schemes are expected to ease prices in the coming months. Still, GED noted that delays in real-time monitoring and policy response prevented earlier stabilisation. The report highlighted a robust performance in the external sector. Export earnings consistently crossed the $4 billion mark, hitting $4.77 billion in July 2025. The exchange rate remained stable at Tk 121–122 per USD, while foreign exchange reserves climbed from $24.86 billion in September 2024 to $31.17 billion in August 2025. This, according to GED, provided a solid cushion against trade shocks and debt obligations. Despite positive external indicators, the domestic financial sector showed deep stress. Private sector credit growth plunged to 6.49 percent in June 2025 — the lowest on record and far short of Bangladesh Bank’s target. Businesses remain reluctant to borrow amid high interest rates, political and economic uncertainty, and cautious bank lending. Commerce Adviser stresses surplus economy for sustainable growth By contrast, public sector credit rose sharply by 13.09 percent, driven by the government’s heavy reliance on bank borrowing to finance its fiscal deficit. This trend, GED warned, is effectively “crowding out” the private sector and undermining future investment and job creation. Revenue collection in August stood at Tk 27,162 crore, falling Tk 3,727 crore short of the target. While collections grew 17.6 percent year-on-year, the shortfall was mainly due to weaker import and income tax receipts. Only VAT at the local level showed improvement. The report flagged persistent revenue gaps as a key challenge in meeting the ambitious annual target of Tk 4,99,000 crore. Development spending remains another weak spot. ADP utilization dropped to 2.39 percent of allocation in the July–August period of FY26, down from 2.57 percent in the same period last year. Although August utilisation improved slightly year-on-year (1.71 percent vs 1.52 percent), GED noted that such low early-year implementation reflects structural bottlenecks, bureaucratic delays, and poor fund release capacity, raising the risk of back-loaded spending and inefficiency. While the decline in inflation and strengthening of reserves signal macroeconomic stability, GED cautioned that the domestic economy faces significant headwinds. Weak private investment, revenue shortfalls, and under-utilisation of development funds threaten to slow growth momentum. “The economy is showing resilience externally but risks remain high domestically. Without urgent measures to stimulate private credit, enhance revenue collection, and accelerate ADP implementation, medium-term growth prospects may weaken,” the report said.

In the bustling streets of Dhaka, countless lives teeter on the edge of survival, where each day’s earnings decide whether families eat or go hungry. Thirty-two-year-old Rina Begum sets up her modest stall near a busy bus stop, balancing two large pots on a makeshift wooden table as she sells puffed rice and fried snacks to rickshaw-pullers, day-labourers, and office-goers. On good days, she earns around Tk 500–600, but when rain falls or authorities force vendors off the streets, her earnings are halved. “The prices of oil, rice, and vegetables have doubled in the last two years, but my earnings remain the same. Sometimes I skip meals so that my children can eat,” she said, wiping sweat from her forehead as she fried ‘beguni’ in a sizzling pan. Rina’s story is far from unique. She is one of more than 6 crore Bangladeshis working in the informal sector, which constitutes nearly 85 per cent of the country’s workforce, according to the Labour Force Survey by the Bangladesh Bureau of Statistics (BBS). Off-season watermelon farming brings bumper gains to Narail farmers From domestic helpers and construction workers to street vendors and transport operators, these millions form the invisible backbone of Bangladesh’s economy, yet they receive little recognition or protection. A joint study by Karmojibi Nari and FES Bangladesh, covering informal workers in all divisions, found that most are employed in retail and sales, agriculture and livestock, food and beverage services, transport and crafts. Nearly 69 per cent of these workers are aged between 25 and 44. Various studies estimate that the informal sector contributes roughly 40–43 per cent of Bangladesh’s GDP. Without these jobs, many would face unemployment or underemployment. Despite their critical role, informal workers remain largely unrecognised, without legal protection, social security, or support systems, especially amid rising inflation. Economists say inflation has hit them hardest. Professor Dr M Shariful Haque, Chairman of the Department of Economics and Banking at the International Islamic University Chittagong, explained that high food inflation sharply reduces the real incomes of informal workers, whose cash wages and small-business revenues are not indexed. “When food inflation spikes, they have no cushion. Their choices are between eating less, borrowing, or pulling their children out of school,” he said. Bangladesh’s leather sector stuck at $1bn; $5bn could be tapped: Experts Prof Haque added that the average income of informal workers ranges from Tk 10,000 to Tk 30,000, but these earnings have not kept pace with inflation, which reached 10.03 per cent in the 2024–25 fiscal  year, the highest in 14 years. Food inflation rose to 10.70 per cent, while non-food inflation stood at 9.47 per cent. In August, the inflation rate fell slightly to 8.29 per cent, the lowest in over three years. Rice prices, in particular, are exerting strong pressure on both food and overall inflation, according to the latest economic update from the General Economics Division (GED) of the Planning Commission under the Planning Ministry. The report noted that rice’s contribution to food inflation rose from 40 per cent in May to 51.55 per cent in July. Bangladesh is densely populated, with more than 64 per cent of the population aged 15 years and above. Of this adult population, 59 per cent are economically active, though there is no precise data on how many are employed in the informal economy or their exact contribution. Unlike formal workers, informal earners generally lack appointment letters, fixed wages, or legal recourse in cases of exploitation. Illness or injury can instantly wipe out their income. Sumon Ali, 32, begins each day by pulling his worn helmet over his head and pushing his old motorbike onto the streets, whispering a small prayer, “Let me earn enough today to keep the family running.” On a good day, he earns between Tk 700 and Tk 800 ferrying passengers across Dhaka, but after deducting fuel, mobile data, and commissions, he is left with barely Tk 400. Back pain and strained eyesight already warn him that he cannot continue indefinitely. Bridge without roads leaves thousands stranded in Rangpur’s Mithapukur Similarly, 45-year-old rickshaw puller Mizanur Rahman pedals slowly home to his one-room tin-shed in Kamrangirchar after earning Tk 700. His daily rent of Tk 150 and the cost of food for his family of five leave almost nothing for emergencies. “If the wheel breaks or I fall sick, my family goes hungry. No one helps us,” he said. Syed Sultan Uddin Ahmed, Executive Director of BILS and Chairman of the Labour Reform Commission, stressed that recognition and legal protection are essential. “Without these, it will not be possible to ensure the rights of domestic and other workers. They remain invisible in our legal and economic frameworks.” Reform Proposals Earlier this year, the Labour Reform Commission recommended sweeping changes, including a national minimum wage, extension of maternity benefits to informal women workers and wage reviews every three years instead of five. They also proposed contributory social insurance for informal earners and emergency sectoral funds to support workers during crises. The commission further suggested making appointment letters mandatory within fifteen days for both formal and informal workers and establishing a digital labour registration system to ensure recognition. Regarding wages, the commission recommended criteria for determining a national minimum wage, to be announced subsequently. Millions of workers in Bangladesh and South Asia survive in the informal economy, including domestic helpers, street vendors, bike riders, and garment subcontractor helpers. In Bangladesh, nearly 85 per cent of the workforce is informal, compared to around 80–82 per cent in India and over 90 per cent in Nepal. These workers face daily uncertainty: low and irregular wages, no contracts, no health coverage, and limited legal protection. Rising inflation has worsened their struggles, forcing families to cut essential expenses. While social protection programmes exist on paper, coverage is limited and enforcement weak, leaving most informal workers vulnerable to accidents, illness, and poverty.

Despite a record Boro harvest, rice prices in Bangladesh remain unusually high, raising questions about market manipulation amid weak monitoring as well as regulation. A visit to several rice wholesale markets in Dhaka reveals only a marginal decrease in prices. Coarse rice is selling at Tk 55 per kilogram, while the “Atash” variety is priced at Tk 65 per kg. Medium-quality Nazirshail and Miniket varieties are going for Tk 70–75 per kg, while premium Kataribhog and Miniket are fetching Tk 85–90 per kg in some areas. All of these prices are roughly Tk 5 per kg higher than in the period just prior to the last Eid ul Azha. Human chain in Ctg demands urgent action to curb rice price hike The price of 50-kg sacks has increased by Tk 350–500, depending on the variety.                          At Uttar Badda’s rice market, popular brands like Diamond, Mozammel, Palki, Royal, and Rasid are being sold at higher prices. Retailers claim they’re not receiving enough supply from millers and are being forced to purchase at higher prices. A similar situation exists at Karwan Bazar, where long-established syndicates between rice agencies, millers and corporate houses can essentially collude to control the price of rice.  Defying The Trend  The latest monthly report of the Planning Commission’s General Economics Division notes that inflation has finally started easing in recent months. Point-to-point inflation in June was recorded at 8.48% by the Bangladesh Bureau of Statistics, marking the first time in 27 months that the inflation rate had fallen below 9%. The decline of 57 basis points (from 9.05% to 8.48%) was substantially larger than the one in May, when it declined by just 12 basis points (to 9.05% from 9.17% in April).  Although this has been attributed mainly to a decline in food inflation, which fell quite sharply by a full 120 basis points, or 1.2% in June (from 8.59% in May to 7.39%), the price of rice has bucked the trend and continues to exert upward pressure on the price level. Rice market remains volatile  despite large-scale imports from India Inflation in rice markets was recorded at an eye-watering 15% in June by BBS. It means even though Boro paddy collection started in late April, the market has seen little relief. With harvesting complete in many districts, the anticipated market correction has not materialised. The Department of Agricultural Extension (DAE) reports that around 5 million hectares were cultivated for Boro this season, targeting a final output of 22.6 million metric tons (MT)—1.6 million MT more than last year. However, increased costs for fertilizer, irrigation, and diesel have raised production expenses. Farmers say per-kilogram costs have risen from Tk 25 to Tk 28–30 this year. Farmers Blame Millers Farmers from Barishal, Jhalakathi, Barguna, Patuakhali and Pirojpur districts report that increased input costs — not adverse weather—are hurting them the most. Khokon Hawlader from Jhalakathi’s Nalchity upazila said, “Diesel prices are up by Tk 15 per liter, and fertilizers aren’t being sold at the government rate. We had to buy them without receipts at inflated prices. But even then, millers are not offering fair prices.” Abdul Khalek of Barishal’s Bakerganj said, “Millers set the price themselves. Until Eid-ul-Azha, paddy was in farmers’ hands and prices were stable. But once it reached the millers, prices spiked.” Neyamat Ali from Pirojpur’s Bhandaria echoed, “People think high rice prices benefit us. But we sell paddy cheap and buy rice at high prices. There’s no oversight—neither on fertilizer dealers nor on stockpiling millers.” Can Imports Pull Down the Price? The government began procuring Boro paddy on April 24 and will continue until August 31. It plans to buy 3 lakh MT of paddy at Tk 36 per kg and 1.4 million MT of rice at Tk 49 per kg, according to Food Adviser Ali Imam Majumder. Fearing poor Aman yields due to erratic weather, the government also plans to import 4 lakh MT of rice from international markets and allow private import of another 5 lakh MT, adding up to 9 lakh MT. Finance Adviser Salehuddin Ahmed told reporters that lower global rice prices will help stabilize the market once imports begin. The Consumers Association of Bangladesh (CAB), however, argues that rice imports are not a sustainable solution. Vice President SM Nazer Hossain said although private companies get import approval, they rarely open LCs (Letters of Credit) to follow through. “Last year too, traders showed no interest in importing rice. That’s because they already had stocks and preferred selling them at high prices,” he said, adding, “No one monitors why they aren’t importing even after getting approval.” Agricultural experts say the DAE increases paddy production targets yearly without verifying whether the targets are met. CAB’s Nazer said, “Whenever prices rise, these narratives emerge. It’s a tactic to divert public attention and protect unscrupulous traders.” Strict monitoring from production to retail, punishment for hoarding, and cracking down on inflated production costs are the key to stabilising rice prices with the existing domestic supply.  

Bangladesh is currently facing a range of macroeconomic challenges, including a slowing economy, high inflation and a decline in foreign investment, said Hoe Yun Jeong, Country Director of the Asian Development Bank (ADB) Resident Mission in Bangladesh on Wednesday. He said the country is facing a decline in foreign direct investment (FDI) and an alarming rise in non-performing loans (NPLs) within the banking sector, with insufficient foreign exchange reserves adding to the mounting pressure, hindering the country’s ability to navigate the economic turbulence. World Bank, ADB approve budget support worth $1.1 billion Yun Jeong made the remarks while delivering his introductory speech at the launch of the ADB’s flagship publication, Asian Development Outlook (ADO) April 2025, held at the ADB office in Dhaka. “Nevertheless, it is encouraging to note that the interim government has prioritised macroeconomic stability, along with institutional, social and political reforms,” Jeong said. The ADB expects inflation in Bangladesh to remain elevated, with monetary policy likely to stay tight, focusing on resolving vulnerabilities in the banking sector, particularly the issue of rising NPLs. On the external front, Jeong noted that the current account deficit is expected to narrow slightly, supported by strong remittance inflows. Bangladesh, ADB ink $600m loan deal for structural reforms In the fiscal sector, the ADB anticipates the fiscal deficit will remain close to the FY2024 level, driven by improved revenue mobilisation and increased recurrent government spending. Jeong warned of downside risks to the economic outlook, including persistent inflation, prolonged monetary tightening, political uncertainty, adverse weather events and a potential global slowdown triggered by new US tariffs. Looking ahead, he expressed the hope that the government would accelerate reforms to enhance domestic revenue collection, address high NPL levels, ensure energy security and stimulate private sector investment. He also stressed the importance of improving public investment management, especially in enhancing project readiness and implementation capacity. “As a longstanding development partner, ADB will continue to support the government through policy-based loans, project investments, and technical assistance,” Jeong said. He highlighted ADB’s focus on private sector development, disaster resilience, digital transformation, regional cooperation, and the provision of regional public goods and empowerment. “Despite global challenges, Bangladesh’s economy remains resilient. To sustain higher growth, the country must implement essential reforms without delay, especially as it prepares for its graduation from Least Developed Country (LDC) status in November 2026,” he added. Jeong also mentioned an upcoming joint report by ADB and the Organisation for Economic Co-operation and Development (OECD), titled “Roadmap for Investment Policy Reforms and Sustainable Development in Bangladesh,” which outlines key reforms needed to boost trade and attract FDI in the post-LDC graduation era. “Economic growth is only part of the equation — sustainability is the other. We reaffirm ADB’s continued support to the government in implementing necessary reforms and pursuing key projects to help Bangladesh achieve its sustainable development goals,” he said.  

Bangladesh’s general point-to-point inflation rate rose slightly to 9.35 percent in March 2025, up from 9.32 percent in February, according to the latest data released by the Bangladesh Bureau of Statistics (BBS). The slight increase was mainly attributed to a rise in non-food inflation, while food inflation showed a decline. In March, food inflation fell to 8.93 percent from 9.24 percent in February, while non-food inflation edged up to 9.70 percent from 9.38 percent the previous month. The data also revealed differing trends between rural and urban areas. In rural regions, point-to-point inflation dropped to 9.41 percent in March from 9.51 percent in February. Rural food inflation declined to 8.81 percent from 9.15 percent, though non-food inflation rose slightly to 9.97 percent from 9.85 percent. Paul Krugman slams US tariffs on Bangladeshi clothing Urban areas experienced an uptick in overall inflation, rising to 9.66 percent in March from 9.34 percent in February. Urban food inflation declined to 9.18 percent from 9.47 percent, but non-food inflation climbed to 9.95 percent from 9.27 percent. The 12-month moving average inflation rate from April 2024 to March 2025 stood at 10.26 percent, up from 9.69 percent during the same period a year earlier. The wage rate index in March was recorded at 8.15 percent, compared to 8.12 percent in February.

Controlling inflation, implementing economic reforms and ensuring macroeconomic stability will be the biggest challenges for Bangladesh’s interim government in formulating the budget for the next fiscal year, according to experts. They said the interim government, led by Professor Muhammad Yunus, faces a series of formidable economic challenges as it prepares the national budget for the 2025-26 fiscal year as the nation is grappling with high inflation, dwindling foreign exchange reserves, a burgeoning external debt and an unstable foreign exchange market. Next budget to see cuts in tax waiver: NBR Chairman The main challenges for the interim government in the next fiscal year will include implementing effective fiscal and monetary measures to bring inflation down to the target of 6.5%, introducing structural reforms to enhance revenue collection, curbing corruption and improving public sector efficiency. Besides, formulating policies to address economic challenges following Bangladesh’s graduation from Least Developed Country (LDC) status will be crucial. Ensuring stability through prudent fiscal management, debt control, and fostering a congenial environment for investment and growth will also be among the top priorities. Economist and Dhaka University Professor Rashed Al Mahmud Titumir said the interim government should declare a revised budget just after assuming power as it inherited a precarious fiscal balance. “They had inherited a precarious economy which was on the cliff,” he said. NBR invites budget proposals for FY 2025–2026 Prof Titumir said the previous government’s debt was mounting, as it continued borrowing new loans to repay old ones.  “They (interim govt) have inherited such an economy where there is outflow, but no inflow, the economy was stagnant -- they have inherited a crisis of income and expenditure,” he said. Due to inflation, Titumir said, consumption had decreased and wages shrunk, leading to a rising trend of poverty even before they came to power. He said that there was no social security, while social protection remained fragmented and plagued by inclusion and exclusion errors. The government failed to address this issue due to the absence of a robust fiscal policy to drive economic growth. The Dhaka University teacher said that enterprises were reluctant to invest due to the ongoing liquidity crisis, which has consequently led to a rise in unemployment.  “As a result, a huge number of the youth population was supposed to be there for absorption in the job market, but they became precariat class,” he said. Talking about the challenges for the next budget, Titumir, a professor at the Department of Development Studies, pointed out that revenue generation will be a challenge for the government while formulating the budget for the next fiscal. Titumir said the government has to go for a good debt management which will take time, for this it should go for a common minimum reform programme. There should be a quick election for an elected government so that confidence may grow among the people of the country which will lead to the predictability of economic activity and stability, he said. He stressed for creating depthness in the social protection system as the inflation prolonged in the country. Rashed Al Mahmud Titumir, who is also the Chairperson of think tank Unnayan Onneshan, said that the government should go for a performance based subsidy programme shunning the pick and choose one. He slammed the government for not scrapping the capacity charge system in the power sector. “Subsidies in the energy, power and road sector were visible,” he added. Prof Titumir said that the government should provide a roadmap for the enterprises which are refraining from making new investments currently. “The government has to show that it has brought discipline in every sector, we are not seeing any discipline in the capacity charge system or other agreements that have done previously.” He also stressed the importance of bringing harmonisation of the fiscal and monetary policy which is still absent. Talking to UNB, former National Board of Revenue (NBR) chairman and a member of the advisory committee to initiate reforms in the NBR, Muhammad Abdul Mazid said that there is an uncertain time in the coming days. “New government will come, but this interim government will stay in power for how long, there will be a surface level budget which will be automatically small one,” he said. There should be no mega projects in the next budget, he said, adding: “The next budget will emphasise the rebuilding of the economy, subsidy, social-safety net programmes and containing the inflation.” Talking about the deplorable condition in the banking sector, Mazid, chairman of the Social Development Foundation (SDF), said that the bleeding in the banking sector has stopped. “It is now in the recovery sector, if some of the siphoned money can be brought back it would be very good, the challenge will be in the reconciliation of the banking sector with the depositors,” he said. He also criticised the previous Awami League government for granting immunity in the power sector, a policy that continues to this day as there is no viable exit strategy midway. Currently, controlling inflation is the primary focus for the upcoming budget. Over the past two and a half years, overall inflation in Bangladesh has consistently surpassed 9%, with food inflation reaching double digits. In December 2024, inflation surged to 11.38%, marking a four-month high. The interim government aims to reduce the average inflation rate to 6.5% in the next fiscal year. To achieve this, the government plans to implement cost-saving measures in public spending, coordinate with a contractionary monetary policy, and proceed with caution in project implementation. These efforts are designed to restore macroeconomic stability and ease the financial burden on citizens. Revenue collection has fallen short, with a gap of approximately Tk 38,000 crore against the revised target of Tk 4,10,000 crore for fiscal year 2024. The banking sector is grappling with significant challenges, particularly a high volume of non-performing loans (NPLs). Political transitions have resulted in leadership vacuums within the central bank, further destabilising the sector. Liquidity shortages are acute, with banks struggling to secure funds even in the call money market. The interim government is prioritising reforms to address these vulnerabilities, focusing on enhancing transparency, improving governance, and restoring confidence in the financial system. A major concern is the $500 million debt owed to India’s Adani Group for electricity supplied from its 1,600 MW coal plant. This liability, inherited from agreements made under the previous administration, is a substantial financial burden. The interim government is reassessing such energy deals, aiming to renegotiate terms to ease fiscal pressures. Plans include reintroducing competitive bidding and implementing regulatory reforms to ensure transparency and cost-effectiveness in future energy agreements.  

The world economy resisted battering by conflicts and inflation last year and is expected to grow a subdued 2.8% in 2025, the United Nations said Thursday. In “World Economic Situation and Prospects 2025,” U.N. economists wrote that their positive prediction was driven by the strong although slowing growth forecast for China and the United States and by the robust performances anticipated for India and Indonesia. The European Union, Japan, and United Kingdom are expected to experience modest recovery, the report says. “We are in a period of stable, subpar growth,” said Shantanu Mukherjee, chief of the Global Economic Monitoring Branch at the Economic Analysis and Policy Division at the U.N.'s Department of Economic and Social Affairs. “This may sound a bit like what we were saying last year, but actually if you lift the hood and take a peek at the engine things are humming,” he said. The report says the U.S. economy outperformed expectations last year thanks to consumer and public-sector spending, but growth is expected to slow from 2.8% to 1.9% this year. The report points out that China sees its own strong growth slowing slightly from 4.9% in 2024 to 4.8% in 2025 due to lower consumption and property-sector weaknesses that are failing to make up for public investment and export strength. This is forcing the government to enact policies to lift property markets, fight local government debt and boost demand. Read: ADB, WTO strengthen collaboration for sustainable economic growth in Asia-Pacific region China's “shrinking population and rising trade and technology tensions, if unaddressed, could undermine medium-term growth prospects,” the report reads. The U.N. projected last January that 2024 global economic growth would be 2.4%. It said Thursday that the rate was estimated to have been higher, at 2.8%. Both remain below the 3% rate that the world saw before the COVID-19 pandemic started in 2020. European growth this year is projected to gradually pick up after a weaker than expected performance in 2024. Japan is poised to pick up from periods of near-recession and recession. India is expected to drive a strong outlook for South Asia, with regional growth projected at 5.7% in 2025 and 6% in 2026. India's 6.6% growth forecast for 2025 is backed by solid private consumption and investment growth, the report says. “The global reduction of poverty over the past 30 years has been driven by strong economic performance. This has been especially true in Asia, where rapid economic growth and structural transformation have allowed countries such as China, India, and Indonesia to achieve poverty alleviation unprecedented in scale and scope,” the report says. Read mor: Japan reaffirms commitment to support Bangladesh’s reform agenda and economic growth “The world economy has largely avoided a broad-based contraction despite the unprecedented shocks of the last few years and the most prolonged period of monetary tightening in history,” said Li Junhua, director, of the Economic Analysis and Policy Division at the Department of Economic and Social Affairs. However, he cautioned, “the recovery remains driven primarily by a few large economies.”