United News of Bangladesh

The interim government has reversed years of aggressive bank borrowing, opting instead to repay outstanding loans in a move economists said could unlock fresh credit for the private sector and cool inflationary pressures. The policy shift marks a clear departure from the previous administration, which had leaned heavily on bank financing to meet its fiscal needs, they said. In contrast, the new government has prioritised debt reduction, expenditure restraint and project rationalisation, a combination analysts describe as rare in the country’s recent fiscal history. “The country’s economic landscape has seen a notable change over the last year, as the interim government is repaying its outstanding loans to the banking system,” said Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD). He said the administration’s approach is already forcing banks to reorient their portfolios towards the private sector after years of safe lending to the government. Mustafizur Rahman praised the decision not to take fresh bank loans this fiscal year while paying down legacy debt, calling it “a clear example of fiscal discipline” and a shift towards “a more responsible pattern of public expenditure”. Economist Abu Ahmed echoed that view, arguing that spending cuts – particularly on “highly ambitious and unnecessary” projects – had become essential to rebalance the credit market. Ahmed, who also chairs the Investment Corporation of Bangladesh (ICB), noted that government borrowing had previously crowded out private investment by drawing banks into low-risk lending to the public sector. Devt partners push govt for tougher tax measures amid debt pressure: NBR head “Banks got an opportunity to lend to the government, and they felt shy to invest in the private sector as there is a risk of recovery,” he said. Debt Reversal Data from the Bangladesh Bank shows a dramatic turnaround. Between July and October of FY2025–26, the government repaid Tk 503 crore to the banking system. During the same period last fiscal year, it had borrowed Tk 15,450 crore. The total net government debt with banks has also edged down. From Tk 5,50,904.96 crore at the end of June, it fell to Tk 5,50,401.65 crore by 30 October.On that day alone, repayment totalled nearly Tk 1,009 crore, including Tk 899 crore to the Bangladesh Bank and Tk 2,541 crore to scheduled banks, driven largely by clearance of short-term “Ways and Means Advance” obligations. Non-Bank Funding Rises The government has simultaneously strengthened its reliance on non-bank financing. Between July and October, it raised Tk 9,565.52 crore through treasury bills and bonds sold to non-bank financial institutions, insurers and individual investors. Excluding National Savings Certificates, total domestic borrowing from non-bank sources stands at Tk 9,062 crore. Economists say the fiscal tightening reflects a broader rethink of development spending. The interim government has cancelled or suspended numerous non-priority and non-profitable development projects, while slowing the pace of many others. IMF-WB proposes unified debt management office in Dhaka to strengthen public debt governance Insiders attribute the lower debt needed to this project screening, along with stricter revenue management. Former National Board of Revenue chairman Dr Muhammad Abdul Mazid said stronger-than-expected tax collection in the first quarter had also supported the government’s ability to repay loans. “This strong revenue position, combined with the government’s firm stance on expenditure control, has made it possible to repay debt instead of taking new loans,” he said. He said reduced government borrowing should ease inflationary pressure while expanding banks’ lending space to the private sector, a shift that could boost production and job creation. Risks Ahead Despite widespread praise for the government’s fiscal prudence, analysts warn that prolonged delays or cuts in development projects risk slowing investment and dragging on growth. For now, however, Bangladesh’s banking sector is preparing for a new era in which the government is no longer its largest and most reliable borrower – and the private sector may once again take centre stage in the credit market. Read more: Banking, power, revenue reforms in focus as govt faces IMF debt concerns: Salehuddin

The Centre for Policy Dialogue (CPD) on Thursday recommended scrapping the proposed plan to introduce an Upper House in the next (13th) national parliament, saying the move will not bring any effective change but rather add further complexity to Bangladesh’s parliamentary system. The observation came at a seminar titled ‘Proposed Upper House in the National Parliament: Can it Ensure Accountability of the Majority Party?’ held at a city hotel. Presenting the keynote paper, CPD Research Director Dr Khondaker Golam Moazzem said the proposed Upper House lacks both logic and necessity in the country’s existing Westminster-style parliamentary system. Prolonged short-term govt not good for economy: CPD He urged the National Consensus Commission to focus on essential reforms instead of pursuing discussions on creating a second chamber. “Instead of an ‘Upper House’, a ‘Parliament Commission’ could be formed to act as the third eye of the legislature,” Moazzem suggested. Sharing his experience, Moazzem said the Speaker often feels powerless when making crucial parliamentary decisions. “A separate commission can empower the Speaker and make parliament more effective,” he added. Pointing to the dominance of the ruling party under the current system, he said, “In Bangladesh’s Westminster model, accountability is almost nonexistent. The majority party dominates nearly all law-making decisions—around 99 percent of the legislation.” Moazzem also highlighted that the parliament has around 50 committees, but most are largely ineffective. “If these committees were truly functional, accountability in lawmaking would naturally follow. We can strengthen parliamentary accountability within the existing structure. There is no need for an Upper House,” Moazzem said. Bangladesh needs 35 GW renewable energy to meet 2040 clean power target: CPD Supporting this view, Professor Nizam Ahmed of the University of Chittagong, another keynote speaker, called the rationale for the Upper House ‘weak and unconvincing’. He pointed out that under the current proposal, bills passed by the lower chamber would be sent to the Upper House for review, but the latter would have no authority to amend them. “If the ‘Upper House’ can only make recommendations, how will it ensure accountability?” he questioned. He also noted that while the Lower House would be elected through direct voting, the Upper House would use proportional representation, potentially giving the opposition more influence. “How the balance between the two chambers will work must be carefully examined.” However, Election Commission Reform Commission member Abdul Alim offered a partial defence of the concept, saying that a second chamber could help curb authoritarian tendencies. “If there’s an Upper House, the ruling party cannot act autocratically. It will naturally create a sense of internal accountability,” Alim said. Still, he warned, the process might lead to political deadlocks and unnecessary duplication. Presiding over the session, Prof Rounaq Jahan, a CPD Distinguished Fellow, emphasised the need for a Code of Conduct for Members of Parliament to strengthen accountability within the existing system. She urged policymakers to fix the flaws in the current framework before experimenting with a new one.  

Eminent economist Dr Debapriya Bhattacharya on Wednesday described the proposed budget for the 2025–26 fiscal year as “in many ways, a budget of disappointment.”  “This (budget) has turned out to be a budget of disappointment in many cases, this disappointment has come from expectations because our desire was something different, but we are seeing that in many cases it is traditional,” he said. The distinguished fellow of Centre for Policy Dialogue (CPD) made the remarks while delivering his introductory speech at a discussion meeting titled ‘National Budget 2025-26: What is there for the left-behinds’. Citizen’s Platform for SDGs, Bangladesh organised the programme at a city hotel where Senior Research Fellow of the CPD Towfiqul Islam Khan presented the keynote speech at the event. Dr Debapriya said this budget was the budget of big expectation as the government has come through a big political uprising. “This government has been formed through an anti-discrimination spirit. So, this budget was supposed to be something different, we have that huge expectation from this budget,” he said. The CPD distinguished fellow also alleged that this budget was presented to the public before getting a nod from the cabinet. “Usually, the budget passed in the cabinet first, this has come in front of people without administrative and state approval,” he said. Senior Research Fellow of the CPD Towfiqul Islam Khan, in his keynote speech, mentioned that Macroeconomic realities are not fully reflected in the setting benchmark and economic policy. “Fiscal framework remains unrealistic and expected to go through a significant change as the tradition of the past regime continues, Fiscal measures lack transparency and are often not backed by evidence with the legalising black money provision remaining in place without justification,” he said. He mentioned that Revenue mobilisation will continue to rely on indirect taxes, disproportionately putting a burden on low-income people; the budget signals no meaningful structural shift in revenue mobilisation. “Limited fiscal space will continue to haunt Bangladesh. TIB comes down hard on govt for retaining black money whitening provision Towfiqul Islam Khan said there is no significant positive change in allocating resources for priority sectors for the LNOB groups although social protection has brought some positive changes. “ADP allocation mirrors past trends, with no major shift in priorities or project quality improvements,” he said. He said the budget remains disconnected from the government's broader reform agenda, Budget process lacks inclusivity and rigour, and political actors were completely ignored, and data transparency remains poor,” he observed. In the winding up speech, Dr Drbapriya Bhattacharya called the 2025-26 as the budget of mistakes and errors, anti-reform budget and anti-equality budget. He attributed this outcome partly to citizens, citing a "demand-side failure"—a lack of sufficient public pressure on the interim government.  “Taking lessons from this we have to continue our pressure on the government in the coming days. Election will be held today or tomorrow, we have to put this pressure on the future leaders,” he said. He said the financial security of the already solvent section of society could be at risk if 80 percent of the population continues to be neglected. Social security programmes get bigger allocations in national budget for FY26  

Bangladesh should not be overly concerned about potential reciprocal tariffs from the United States, said Dr Debapriya Bhattacharya, Distinguished Fellow at the Centre for Policy Dialogue (CPD), on Saturday. Speaking at a seminar titled “U.S. Reciprocal Tariff and Way Forward for Bangladesh”, Dr. Bhattacharya asserted, “I say this with responsibility. The impact of the tariffs is also affecting our competitor countries. As a result, we are not losing too much in comparative competition.” The seminar was jointly organised by the Dhaka Chamber of Commerce and Industry (DCCI) and Business Initiative Leading Development (BUILD), and held at DCCI’s Motijheel headquarters. Dr. Debapriya presented the keynote paper. Describing the US counter-tariff regime as a “toxic tariff treatment,” he said the measures under the new US administration appear more politically motivated than economically sound. He questioned the effectiveness of President Trump’s counter-tariff policy, expressing doubt that it would deliver on its intended goals, or be readily accepted by the market. According to Debapriya, the policy is flawed in its reliance on goods trade deficits as the basis for imposing duties, overlooking the rapid expansion of the global service sector. He also noted the instability caused by annual tariff adjustments, which he said discourages investment. Policy Research Institute launches Monthly Macroeconomic Insights Debapriya urged policymakers to treat this challenge as an opportunity to implement long-overdue trade and policy reforms. Commerce Secretary Md Mahbubur Rahman said Bangladesh is now prioritising bilateral discussions with the US rather than relying solely on multilateral forums. Bangladesh believes it is currently on the right diplomatic and trade path, which is why it has not tabled any formal proposal at the World Trade Organization (WTO), he added. Mahbub revealed that talks are ongoing with the US on 100 specific Bangladeshi products, including a review of how US imports from third countries are accounted for in trade figures. He warned that if the US does not accept Bangladesh's position, the country may revise its import policies—possibly banning imports from those third countries. Such a policy already applies to certain automotive imports. He also pointed to recent steps to reduce trade barriers, including the scrapping of unnecessary radioactivity tests. Special guests at the seminar included Mahbubur Rahman, President of the International Chamber of Commerce (ICC) Bangladesh, and Moinul Khan, Chairman of the Bangladesh Trade and Tariff Commission.

Investment in Bangladesh could face obstacles if the upcoming national election is not held within the promised timeframe, warned Professor Dr Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD). "If the next election in Bangladesh is not held within the pledged timeframe, political uncertainty may arise, consequently hampering investment," he said while speaking at a shadow parliament debate competition on 'Prospects and Challenges of Foreign Investment' organised at the FDC on Saturday. Mustafizur Rahman emphasised that political stability was essential for sustainable investment. Although a recent investment summit had generated optimism about foreign investment in Bangladesh, the actual commitments received were not particularly substantial, he added. Then CPD Distinguished Fellow said the ambition expressed at the summit to elevate Bangladesh to Singapore’s level within the next decade was unrealistic, but if an investment-friendly environment was maintained, the country could achieve a position comparable to Thailand within that time. Reflecting on past government reports, he said, "Investment statistics during previous administrations often presented an unrealistic picture. For instance, the Seventh Five-Year Plan projected $33 billion in foreign direct investment (FDI), whereas the actual inflow was only $11 billion." Bangladesh lost estimated Tk 226,236 crore to tax evasion in 2023: CPD Dr Mustafizur Rahman also compared Bangladesh's FDI situation with other countries, saying, "Vietnam’s current FDI stands at $360 billion, while Bangladesh has attracted only $22 billion. Moreover, the current situation in India and Pakistan poses concerns for foreign investment in Bangladesh. If war breaks out, India's military expenditure will rise, potentially disrupting the tariff advantages we currently enjoy with them." At the shadow parliament debate organised by Debate for Democracy, Eden Mohila College defeated Dhaka College to emerge victorious. The event was held with its chairman Hasan Ahmed Chowdhury Kiron in the chair.

Bangladesh lost an estimated Tk 226,236 crore in tax revenue in 2023 due to evasion and avoidance, driven by the lack of a fully digitalised tax system. This finding was revealed in a study report of the think tank the Centre for Policy Dialogue (CPD) unveiled on Monday. On the occasion, the research organisation a briefing on corporate income tax reform for graduating Bangladesh at the CPD office in Dhanmondi, Dhaka. Now US could collect over $1 billion in tariffs from Bangladeshi goods: CPD study The CPD study estimated that around 50 percent has been lost to corporate tax evasion. The estimated corporate tax evasion in 2023 would be roughly Tk 113,118 crore. The global trend in corporate income tax (CIT) has declined in recent years, dropping from 27.5 percent in 2006 to about 23.6 percent in 2016. Many developing countries maintain standard CIT rates of 25%, 30%, or higher; for instance, China has a CIT rate of 25 percent, Malaysia 24 percent, Indonesia 22 percent, Pakistan 29 percent and Myanmar 22 percent. Some developing countries offer significantly lower CIT rates, such as Oman and Uzbekistan at 15 percent, and Paraguay and Kyrgyzstan at 10 percent. Tax Structure of Developing Countries and LDCs Country Group CIT Rate Global Trend (2006-2016) 27.5% (2006) to 23.6% (2016) Developing Countries 22%-29% Least Developed Countries (LDCs) 10%-35% Graduated LDCs 21%-35%.

Eminent economist and Chairman of the Centre for Policy Dialogue (CPD) Professor Rehman Sobhan on Thursday urged Bangladesh to seek alternative export markets to counter the uncertainty in global trade created by US President Donald Trump's new tariff policy. “The United States is Bangladesh’s largest export market. But the level of uncertainty there is now so great that we must adopt a strategy to increase exports to the European Union, Canada, Australia, Japan and emerging markets in Asia,” he said at a CPD dialogue. The dialogue, titled ‘Trump's Reciprocal Tariffs and Bangladesh: Implications and Response’, was held at a hotel in Gulshan, Dhaka. “Asia will be the biggest growth centre in the world economy over the next 25 years. If this region is not prioritised, we risk falling behind,” Prof Sobhan added. The keynote paper was presented by CPD Distinguished Fellow Prof Mostafizur Rahman, who highlighted that in 2024, the US collected approximately $1.27 billion in tariffs on Bangladeshi products, while Bangladesh received only $180 million in tariffs on US imports. “This issue cannot be resolved simply by reducing tariffs. In fact, such measures could lead to even greater tariff-related losses,” he said. Now US could collect over $1 billion in tariffs from Bangladeshi goods: CPD study The CPD underscored the importance of closely monitoring the impact of US tariffs on Bangladesh’s export competitiveness, especially in comparison with countries like Vietnam. It also emphasised the need to engage with the US through the Trade and Investment Cooperation Forum Agreement (TICFA). Prof Mostafizur also stressed the importance of pursuing a new trade agreement with the US administration and strengthening diplomatic engagement to address the challenges posed by Trump’s tariff policy. At the same time, Bangladesh must explore strategic alternatives, he said. Currently, Bangladesh imposes an average tariff and other duties of 6.2 percent on US imports, which drops to 2.2 percent when rebates are factored in. In contrast, US tariffs on Bangladeshi imports average 15.1 percent. Mustafa Abid Khan, former member of the Bangladesh Tariff and Trade Commission, said, “This is not a reciprocal tariff. We need to understand the US position and continue seeking a solution through dialogue. Signing a free trade agreement (FTA) with the US is not straightforward. They have repeatedly stated that Bangladesh is not ready yet. Speakers at the dialogue called for the development of a strategic commercial plan and greater export diversification in response to the imposition of counter-tariffs by the US. CPD Executive Director Dr Fahmida Khatun moderated the event, participated by representatives of trade bodies and labour leaders.

The Centre for Policy Dialogue (CPD) has called for holding national election soon, stressing that a stable political environment is crucial for economic and investment growth. "The sooner a conducive environment is created, the faster the election can be held. There is no reason to delay it," CPD Executive Director Dr. Fahmida Khatun said on Wednesday. She made the remarks while responding to a question during the release of the “State of the Bangladesh Economy in FY2024-25” report at CPD’s office in Dhanmondi, Dhaka. LNG import deals not needed for Bangladesh: CPD Dr. Fahmida underscored the importance of setting a clear timeline for elections, suggesting a window between December 2025 and June 2026. "Uncertainty is inherent in any temporary system," she noted. "An interim or caretaker government operates for a short time, while a political government holds a longer-term mandate from the people." She said that a government without a public mandate cannot remain in power indefinitely and emphasized the urgent need for stability to foster business and investment confidence. “For business and investment, stability is urgently needed, organizational stability which will work with skill and accountability,” she said. Severe floods in southeastern region cause losses of Tk 14,421 crore: CPD Dr. Fahmida also pointed out that ongoing policies and reforms would ultimately depend on an elected government for implementation. "In such an uncertain situation, major investments will not materialize. Big decisions, structural changes, and organizational transformations cannot move forward without stability," she said. "That is why holding elections is essential, and we continue to advocate for it." CPD’s Distinguished Fellow, Dr. Mustafizur Rahman, echoed similar sentiments, saying that political and economic reforms are not mutually exclusive and can proceed simultaneously. CPD study on debt portfolio flags fast rising external debt as 'reason for concern' He emphasized the need for democratic processes within political parties to ensure sustainable governance. "I personally believe the country must progress through a democratic process swiftly," Dr. Rahman said, urging for continued political and economic reforms. "These reforms are critical for our future," he concluded.

The Centre for Policy Dialogue (CPD) on Wednesday said the interim government requires a comprehensive approach that balances short-term relief with handling long-term issues, while implementing sustainable economic reforms. “The interim government has been tasked with addressing the critical challenges of the economy. Addressing these multifaceted challenges requires a comprehensive approach— balancing short-term relief for the public, tackling longstanding issues, and implementing sustained reforms to strengthen economic fundamentals,” it said. The independent think tank came up with this prescription in a report titled 'State of the Bangladesh Economy in FY2024-25', released Wednesday at its Dhanmondi office in the capital. LNG import deals not needed for Bangladesh: CPD CPD Executive Director Dr Fahmida Khatun presented the report highlighting its salient points, while other members of her team were present and answered questions. As per the report, Bangladesh's economy has come under significant challenges during the last few years. Among several problems, weak revenue generation leading to constrained fiscal space, heavy reliance on bank borrowing to meet budget deficits, tight liquidity in banks, high prices of essential commodities, low investment and declining foreign reserves were highlighted as the most urgent issues affecting macroeconomic stability. Given the ongoing economic situation, the report said that a coordinated approach is needed to overcome the multifaceted challenges, that include stabilising the economy, and protecting the vulnerable, low- and limited- income households. “To address Bangladesh’s economic challenges in the coming months, the interim government must adopt a balanced and effective strategy that addresses immediate crises and initiates medium to long-term reforms to be carried out by the politically elected government.” The report said that in the public finance sector, the interim government should prioritise preventing tax evasion, limiting tax avoidance, and bolstering compliance systems to create a more inclusive fiscal base and reduce revenue leakages. The recently implemented practice of excluding non-productive initiatives from the ADP will need to be continued. Special emphasis should be placed on ADP projects nearing completion, setting a benchmark at those over 85 percent complete by June 2025, since these can help to quickly stabilise the economy, attract private investment, and create additional jobs. To contain inflation, the report suggested market monitoring, limiting intermediaries, connecting farmers directly to buyers, and regulating hoarding and stockpiling by rice warehouse operators and millers. Provision of improved storage facilities and adequate transportation systems are integral to reducing post-harvest loss of agricultural commodities. Educating farmers to adapt agricultural best practices, expanding the use of existing modern technologies, and improving their negotiation skills to secure fair prices are also advised. To tackle the external sector, it said that given the emerging global and regional trading scenario, including the uncertainties as regards USA trade policy under the new Trump administration, the government should undertake renewed efforts to realise untapped export potentials in the markets of neighbouring regions of South Asia, East Asia and ASEAN by pursuing Free Trade Agreements and Comprehensive Economic Partnership Agreements, and through triangulation of investment, transport and trade connectivities. It is advised to implement the Smooth Transition Strategy, which has been prepared in anticipation of Bangladesh’s upcoming LDC graduation, particularly because any request for deferment of graduation is unlikely to succeed. Meanwhile it will leave Bangladesh as the only LDC in South Asia other than the war-torn Afghanistan. CPD mentioned that the government should prioritise immediate improvements in the law-and-order situation to ensure businesses can operate safely without the threat of extortion. It also called for exploring further reductions in fuel prices using a market-based pricing model, with the potential to lower costs by Tk 10-15 per litre, as suggested by CPD. It also suggested designing a subsidised credit facility with lower interest rates to support SMEs. In Agriculture, CPD said that given the rise in demand for non-household consumption, particularly animal feed and industrial use, a proper estimation of annual rice demand is highly required. The government may explore long-term contracts with Middle Eastern countries to import fertiliser, which would reduce fertiliser costs. The rice procurement process must be revised and made transparent, open and accessible to all. In the Power and Energy sector, CPD's report said that a specific two-year plan with an agenda to end the cycle in which the whole sector is caught needs to be identified. The government should deprioritise importing LNG and focus on the exploration of domestic natural gas. CPD emerged as a vital platform for public interest beyond political boundaries, Amir Khosru says All documents and reports related to public procurement, especially power plants, should be accessible to the public as these are not confidential documents by law. For the troubled Banking sector, CPD mentioned that concrete measures such as improving loan sanctioning practices, enforcing single borrower exposure limits, an end to loan rescheduling at will, strengthening internal controls and developing an exit policy for troubled banks should be initiated by the Bangladesh Bank. Bank accounts of wilful defaulters and their immediate family members should be frozen immediately upon their defaulting, with their assets liquidated, and their businesses temporarily nationalised. Although vested interest groups may strongly oppose such moves, an all-out effort should be taken and continued, backed by political commitments from the highest level, to continue banking reforms.  

The Centre for Policy Dialogue, an influential Dhaka-based think tank, on Wednesday said signing deals to import LNG (liquefied natural gas) does not align with the interim government’s policy position. “If I think from the point of view of the interim government, then this LNG deal actually does not go with their stance,” said Helen Mashiyat Preoty, Senior Research Associate at CPD. Preoty was referring to the non-binding agreement signed by the government with a new US firm, Argent LNG, to purchase up to 5 million metric tonnes of LNG annually. Argent LNG is developing a 25 million metric tonnes per annum (MTPA) LNG facility in Louisiana. It hopes to start deliveries in 2030.Bangladesh Investment Development Authority (BIDA) Executive Chairman Chowdhury Ashik Mahmud Bin Harun, better known as Ashik Chowdhury, signed the deal on behalf of Bangladesh side – raising further questions over its propriety. Preoty did not let it slide.  “There is question whether BIDA chairman could sign this kind of deal, this is the first time we came to know that BIDA chairman signed this kind of deal,” she said. Nevertheless, it was touted as the first major US LNG supply deal since President Donald Trump took office for a second term last January, in a statement issued by Argent. CPD emerged as a vital platform for public interest beyond political boundaries, Amir Khosru says Preoty was taking questions Wednesday at a CPD programme to release its latest Independent Review of Bangladesh’s Development, titles ‘State of the Bangladesh Economy in FY2024-25: Navigating Expectations in Turbulent Times’, held at its office in Dhanmondi. CPD Executive Director Dr Fahmida Khatun presented the iRBD report. Preoty, meanwhile, also said that Bangladesh has stopped making payments against its LNG import bills from Qatar and Oman.“And yet, we are signing another deal for importing LNG again,” she added. Bangladesh's economy lags behind Sri Lanka, Nepal: CPD Preoty also mentioned that BAPEX is failing to act on nine drilling work orders due to a fund crunch, further reinforcing her portrayal of the government as broke. She reiterated that CPD thinks that there is no need to sign any short or long term deal for importing LNG for the country.