AGP Executive Report

Budget & Deregulation: Bangladesh’s FY27 budget (Tk 9.38tn) is being pitched as business-friendly and reform-led, with Finance Minister Amir Khosru Mahmud Chowdhury saying licences and approvals will be automatically granted if no response comes within 7 days, via a single-window focal point. Energy & Industry: The budget earmarks over 99% of energy and power spending for development, including a solar push with a zero tax rate until 2035, while RNPP’s Unit-1 is expected to connect to the grid by end-August. Capital Markets & Finance: ICAB says hitting the Tk 695,000cr revenue target needs reforms and warns bank-financed deficits could crowd out private credit; FBCCI and MCCI back the budget but flag revenue feasibility and execution risks. Trade & Diplomacy: Bangladesh unveiled a roadmap for trade, growth and economic diplomacy, positioning the country as a stable investment destination; Bangladesh and Russia reaffirmed ties, including Rooppur progress. RMG & Labour: BGMEA welcomed the budget’s production and deregulation direction; Olympic Cement workers in Barishal protested job security and unpaid dues amid reported sale plans. Tax Policy: A 15% capital gains tax is proposed for gold, jewellery and digital currencies from next year. Climate & Water Risk: Teesta water levels are rising fast, with flood fears in coming days.

Budget & Markets: Bangladesh’s FY27 budget proposes a digital, time-bound IPO process but keeps the listing tax incentive unchanged, drawing criticism from merchant bankers as no new listing tax benefits were offered. Fiscal Risk: Finance ministry flags revenue shortfalls as the biggest domestic risk, warning debt could rise sharply if gaps persist. Business Climate: Trade bodies broadly welcome the budget but say execution, borrowing costs, energy shortages and sector-specific taxes remain key worries. Free Trade Zones: Govt plans free trade zones nationwide, aiming to cut supply-chain lead times; businesses expect lower cost of doing business. Energy Transition: ActionAid and JETnet-BD hail renewable energy tax/customs exemptions, including solar and EV-related incentives, as a boost for clean power and local green industries. Power Sector Governance: The energy minister says earlier “capacity charges” left a heavy fiscal burden and is reviewing contracts through legal processes. Education Push: Education allocation jumps sharply, with officials framing it as building a knowledge-based generation. Border Security: BGB and BSF DG talks focus on border deaths and illegal/forcible crossings, with renewed calls to stop pushbacks. Industry & Retail: Fresh Super Mart expands with new outlets at MRT Line 6 stations, while Kansat mango market sees a drive removing illegal structures. ADB Support: ADB announces a US$4bn crisis package for countries hit by West Asia conflict, including Bangladesh.

Power Sector Reform: Power Minister Iqbal Hassan Mahmood Tuku says the government is considering legal action over capacity-charge arrears tied to past private power deals, while also signalling reviews of capacity charges and power purchase agreements to cut generation costs. Energy Transition: Bangladesh targets 5,000MW solar by 2030 and plans to revive BAPEX with new drilling rigs to boost domestic gas exploration and reduce import reliance. Budget FY27 Push for Inclusion: Finance Minister Amir Khosru Mahmood Chowdhury pitches the Tk 9.38 lakh crore FY27 budget as “for all,” aiming to bring every citizen into economic planning, control inflation through reforms and supply efficiency, and shift toward an investment-driven economy. Digital Economy: The government’s “One Citizen-One ID-One Digital Wallet” plan is set to link identity and payments to expand access to services and boost ICT’s GDP contribution. Industry & Trade Diplomacy: A Dhaka summit will map “Trade, Growth & Economic Diplomacy 2026,” while a Chinese delegation is expected to visit within two months to explore industrial investment opportunities in the north. Urban Services: DNCC plans a modern waste management system with waste-to-energy generation and new collection equipment to clean up Dhaka. Policy Debate: CPD, BCI, MCCI and others broadly welcome the budget’s direction but warn implementation and revenue assumptions could be weak; BTCA criticises tobacco policy for enabling new nicotine products. Regional Finance Support: ADB announces a $4bn crisis package for Middle East fallout, with Bangladesh listed among affected countries seeking support. Border Coordination: BGB and BSF conclude DG-level talks in New Delhi with decisions on zero border killings, anti-smuggling and push-in management.

Budget & Tax Reform: Bangladesh’s proposed FY2026-27 national budget totals Tk 9.38 lakh crore, targeting 6.5% GDP growth and 7.5% inflation, with business groups urging faster execution and tax administration reform. Key moves include making TIN mandatory for new bank accounts, shifting TDS to advance tax, and introducing faceless/automated refunds. Telecom Inclusion: The government will withdraw the Tk 300 SIM tax, with operators welcoming the change but still calling for broader telecom tax rationalisation. Renewables Push: A 0% tax rate for solar components (up to 2035) plus incentives for solar electricity users aims to accelerate renewable capacity. Power & Infrastructure: The budget allocates Tk 17,345 crore for power/energy and highlights river dredging and flood control, with Padma Barrage planned over seven years. Industry & Trade Links: Bangladesh and China signed an agreement for the 9th Bangladesh-China Friendship Bridge in Patuakhali, while the budget also backs investment zones and credit support. Capital Market Reform: Plans to strengthen bonds, mutual funds, green bonds and Sukuk to reduce reliance on bank loans. Agriculture & Livestock: Proposed tax cuts may lower prices of fertilisers, pesticides, feeds and essentials; expansion of Black Bengal goat and native sheep is also in focus.

Budget 2026-27: Bangladesh unveiled a Tk 9.38tn ($77bn) FY27 budget aiming for 6.5% growth and 7.5% inflation, with spending up 19% and development outlay rising 47% to Tk 3.16tn, while financing a Tk 2.43tn deficit largely through higher foreign borrowing (net foreign borrowing nearly Tk 1.1tn, +89%). Tax & retail impact: The government moved to pull millions of retailers into the tax net via a 0.20% advance income tax on goods supplied to retailers, shifting collection to upstream suppliers. Consumer relief vs inflation risk: Sweeping duty/VAT cuts target essentials, medicines and EVs, but economists and business groups warned implementation and revenue realism remain key. Healthcare push: Health allocation nearly doubles to Tk 69,409cr, alongside tax relief on dialysis/heart stents and cancer-drug inputs. Pharma self-reliance: Import duty withdrawal on 51 new API raw materials and zero-duty/VAT relief on additional cancer-drug ingredients. Industry & tech incentives: Extended tax concessions for semiconductors/chips to 2031 and a plan to make Bangladesh a leading electronics manufacturing hub in five years. Infrastructure & logistics: A 3,000km expressway plan, metro expansion for Dhaka, and steps to upgrade air cargo clearance and logistics hubs. Energy & environment: Solar power gets 0% tax rate until 2035, plus an AI groundwater monitoring dashboard and river/canal excavation targets. Business reaction: Major chambers welcomed tax/VAT/customs reforms but flagged risks from heavy bank borrowing and inflation pressure. Retail hours: Shops and malls can stay open until 9pm under the new schedule.

Denim & Apparel Trade: The 20th Bangladesh Denim Expo opened in Dhaka under “Frontline to Future,” with EU and industry leaders urging decent jobs, skills, clean energy transition and higher-value growth as Bangladesh prepares for LDC graduation. RMG Export Pressure: Bangladesh’s readymade garment exports to the US fell 11.24% in Jan–Apr 2026, with April down 17.21%, reflecting weaker demand and lower unit prices. Budget Watch (FY27): The BNP government is set to place the FY27 budget in parliament today, with analysts warning the big test is financing without a debt trap; expectations include inflation control, social spending and investment, while markets stayed cautious ahead of the announcement. Energy & Industry: Patenga Container Terminal at Chittagong Port cut vessel waiting time to near zero, while Kaptai hydropower faces possible suspension as water levels drop. Payments & Fintech: Mastercard appointed Zakia Sultana as Bangladesh country manager, focusing on scaling digital payments and partnerships. Agriculture Inputs: The agriculture minister stressed soil fertility restoration as chemical overuse is driving acidity and lowering yields. Housing Affordability: REHAB urged budget measures like single-digit loan interest and lower construction taxes to make homes reachable for middle-income buyers. Market Sentiment: DSE closed nearly flat as investors waited for budget signals.

Investment Incentives: PM Tarique Rahman says the govt will offer a 1.5% commission/consultancy fee to individuals who successfully bring foreign investment to Bangladesh, aiming to mobilise diaspora networks and boost inflows. Renewable Power Push: 35MW has been added to the grid via rooftop solar and net metering as Bangladesh moves closer to its 20% renewable target by 2030. Trade & Investment Facilitation: The PM says investment procedures are being simplified through faster online import-export registration, updated export policy, removal of non-tariff barriers for export-oriented imports, and allowing imports via contracts without L/Cs. Energy Procurement: Cabinet committee approvals include importing gas oil, Jet A-1, furnace oil and octane for June-August to keep fuel supply steady. Budget in Focus: Finance Minister Amir Khosru Mahmud Chowdhury will present the FY27 budget tomorrow, projected as the country’s largest at Tk 9.38 lakh crore, with a “trillion-dollar economy” theme. Banking Stability: ABB chairman warns Islami Bank unrest is spilling into politics and could harm the wider banking sector’s confidence. RMG & Industry Outlook: Inditex’s regional chief tells the Denim Expo Bangladesh can become a top RMG sourcing hub if it improves lead times, value-added output and supply-chain collaboration. Export Diversification Finance: Economists welcome BB’s Tk 3,000cr refinance scheme to support non-RMG exporters and reduce dependence on garments. Agri-Soil Warning: Agriculture minister flags soil acidity (pH ~4.5) and calls for raising it above 6.5, warning excessive fertiliser and pesticide use is hurting yields. Infrastructure Approvals: ECNEC approved 10 projects worth Tk 38.91b, while sending back delayed items like the Khulna shipyard road revision. Economic Snapshot: BBS provisional estimates show FY25-26 GDP growth at 4.14% and per capita income rising to $3,020, with services and agriculture leading while industry growth softens.

Japan-Bangladesh Energy Support: Japan will provide an emergency loan of up to 50 billion yen (about US$312m), co-financed with ADB, to strengthen economic resilience and ensure stable energy supply amid global shocks. Bangladesh Bank Agri Push: BB has launched a Tk 100b (Tk 10,000cr) five-year refinancing scheme for agriculture, offering low-interest loans capped at 8%, with collateral-light terms for small/marginal and women farmers. Budget in Focus: Finance Minister Amir Khosru says the upcoming Tk 9.38tn budget aims to cover all sections despite limited resources, while inflation and weak revenue remain key concerns. RMG Cost Relief & Export Pressure: Govt may halve source tax on locally purchased cotton to 0.5% to cut input costs; BGMEA plans a “Charter of Policy Support” as garment exports keep sliding. Power & Industry Costs: BERC raised electricity tariffs for June billing, and solar at Padma Bridge service areas is cutting bills—an example of cost pressure meeting renewables. Financial Sector Cleanup: BB will appoint administrators for liquidation of five struggling NBFIs, with depositors up to Tk 10 lakh prioritized. Trade & Market Access: Alibaba.com appointed Springfield Corporation as its channel partner to help exporters, starting with textiles and apparel. Manpower Deal: Bangladesh and Russia discussed scaling manpower exports from nearly 10,000 to 100,000 workers within a year, alongside trade expansion. Border Security Risk: Another landmine blast on the Bangladesh-Myanmar border killed a man, highlighting ongoing frontier readiness gaps.

Energy Subsidy Shock: Finance Minister Amir Khosru told parliament Bangladesh may need an extra Tk 426bn in subsidies by June 2026 for oil, gas, electricity and fertiliser, driven by Middle East-linked fuel and LNG price spikes and higher import/production costs. Japan Financing: Japan confirmed a $312m (about Tk 3,800 crore) ODA loan for economic resilience and stable energy supply, with ERD and JICA signing notes and a loan agreement. Banking Trust Push: The finance minister said banking stability steps include merging five troubled Islamic banks into Sommilito Islami Bank, and expanding deposit protection under the Deposit Protection Act 2026 (coverage raised to Tk 200,000). Stock Market Penalties: BSEC fines of Tk 14.96bn were announced in parliament over alleged stock market irregularities and manipulation. ECNEC Approvals: ECNEC cleared 8 projects worth Tk 2,266.41 crore, spanning irrigation, highways, health and education. Agri-Tech & Data: CU inaugurated the country’s first Satellite Ocean Observation and Data Innovation Center, aimed at improving fisheries, shipping and marine research. Startup Funding: ICT minister said Startup Bangladesh has invested Tk 109 crore in 36 approved tech startups, with plans to scale funds to Tk 1,000 crore. Digital Telecom Move: Veon proposed a strategic combination involving Teletalk and an interest in acquiring Nagad.

RMG Labour Unrest: Garment workers blocked Dhaka roads for hours over sudden layoffs and unpaid wages, paralysing Mohakhali–Rampura traffic and stranding commuters. Bangladesh Bank Support: BB launched Tk 50,000cr revolving refinance for CMSMEs (max 9% lending rate) to ease working-capital stress and sustain production/jobs. Export Pressure & Policy Response: Commerce minister warned LDC graduation could cost $17.5b in exports from losing preferential access, while budget talks include halving advance income tax on export cash incentives to 5%. Trade & Growth Signals: Trade deficit widened to $22.21b in July–April as imports outpaced exports; PMI rose to 62.8 in May, with manufacturing and services expanding faster. Energy & Cost of Living: Renewables face “fiscal discrimination” as fossil fuels dominate budgets; meanwhile, electricity disruption claims continue despite official denials. Industry Outreach: BCCCI leads a 23-member Bangladesh delegation to China’s Kunming expo to push textiles, pharma, leather and agro exports. Labour Mobility: Bangladesh and Mauritius agreed to fast-track an MoU to reopen the Bangladeshi labour market. Research & Skills: BUET inaugurated a climate-health heat disparity project funded by Wellcome Trust; IUB topped private universities in Research.com’s Bangladesh ranking.

Bangladesh Bank Financing Push: BB launched Tk 5,000cr revolving refinance for CMSMEs (banks lend up to 9%) and Tk 1,000cr revolving refinance for green industries/factory buildings (PFIs refinance at 2%, lending capped at 5%), while also rolling out a Tk 10,000cr revolving refinance for agriculture and rural jobs to boost food security. Food & Agriculture Efficiency: State minister said Bangladesh wastes about 3.5mn tonnes of food yearly, citing UNEP’s Food Waste Index, while PKSF and CIMMYT discussed cooperation on climate-resilient crops, post-harvest loss reduction and farm mechanisation. Trade & Export Moves: Commerce minister said trade deficit widened to $24.16bn in FY25 and warned LDC graduation could risk $17.5bn in exports; meanwhile, leather policy support includes inter-bond transfer and a central bonded warehouse, and jute/agri export incentives expand beyond RMG. Halal Economy Linkages: Indonesia’s envoy urged Bangladesh firms to tap halal opportunities in processed food, fashion, pharma, healthcare, medical devices and digital tech, with a push to join D-8 Halal Expo 2026. Market & Industry Signals: DSE snapped a 10-day winning streak on profit-taking ahead of the budget; engineering exports rose 20% (July–May FY25-26) with electrical/electronics leading. Compliance & Operations: BSTI mobile courts fined fuel stations for dispensing irregularities; NASSA garment workers blocked Mohakhali road over unpaid wages.

Energy Security & Policy: A JS special committee submitted a 12-point plan to fix Bangladesh’s energy crisis, urging at least three months’ strategic fuel-oil reserves, diversified import sources, full automation and digital monitoring of the fuel-supply chain, tighter anti-smuggling rules, and faster work on key projects like the Dhaka–Chattogram pipeline and Eastern Refinery expansion. Budget Signals for Industry: The upcoming FY27 budget is set to include tax breaks for renewables, edible-oil production and SMEs, with long tax exemptions for solar investors and incentives for EVs. Hydrocarbon Push: Govt plans its first onshore oil-and-gas bidding round in 28 years, with Petrobangla drafting a new production-sharing contract to reverse declining gas output. Capital Market Overhaul: DSE turnover hit a near-2-year high as investors bet on BSEC reforms; the new BSEC chief Masud Khan pledged full digitisation and faster IPO processing. Credit & Inflation Pressure: Private sector credit growth stayed flat at 4.75% in April, while inflation rose to 9.4% in May, adding strain to business activity. Export Finance: Bangladesh Bank launched a Tk 30b refinance scheme to diversify exports beyond RMG, targeting priority sectors with low refinancing rates. Aviation & Tourism Stakeholders: Industry groups urged FY27 policy support, including jet fuel and leasing tax relief, to cut costs and boost demand. Food Safety Enforcement: BSTI-led drives fined two Boalkhali businesses Tk 1 lakh for selling expired, unhygienic products without proper licences.

Energy Security Push: A parliamentary special committee urged Bangladesh to expand strategic fuel reserves to at least three months, diversify import sources, and fully automate fuel supply with digital monitoring, alongside tougher anti-hoarding and anti-smuggling enforcement. Gas & LNG Roadmap: The energy minister outlined plans for 58 gas wells, offshore exploration, a floating and land LNG terminal in Maheshkhali, plus new transmission pipeline projects and targets to cut system losses. Power Demand Reality Check: Peak summer and irrigation demand is around 18,000MW; officials say there’s no overall shortage, but temporary disruptions persist due to primary fuel limits, grid constraints, maintenance and weather. Aviation Cost Relief: BERC cut Jet A-1 for domestic flights to Tk150.21/litre (down Tk15.67) and international rates to $0.9808/litre, easing airline operating costs. Trade Finance Upgrade: Mutual Trust Bank launched “MTB Trade X,” an in-house digital portal to streamline and track trade transaction requests end-to-end. Market & Macro Signals: DSE extended its winning streak to 10 sessions; inflation hit 9.42% in May. Export Diversification Funding: Bangladesh Bank rolled out a Tk3,000cr refinance scheme to support non-RMG exports and reduce product concentration risk. Urban Governance: DSCC held a public hearing on accountable, participatory city services, including waste, roads, waterlogging and trade licenses.

Energy Governance: Govt vows action against alleged power/energy-sector oligarchs and says lifeline and marginal electricity tariffs were reset to shield about 65% of consumers from hikes. Power Market Economics: Capacity payments and rental charges are projected to rise to Tk 52,608 crore in FY27, raising pressure for possible tariff increases as subsidy allocation stays near Tk 37,000 crore. Budget & Industry Policy: Officials discuss a people-friendly Budget 2026-27 and a new economic model targeting a $1tn economy by 2034, alongside a Tk 60,000 crore restructuring package to revive closed industries. Trade & Exports: RMG exports to major markets fell in July-May, while fruit exports hit a record $123m in FY26 on surging demand from expatriate Bangladeshis. Manufacturing & Compliance: Leather exporters blame long delays in a fully functional CETP for stagnant exports. Industrial Expansion: BSCIC plans a new industrial estate in Pabna, with plot and estate infrastructure issues to be reviewed. Denim Push: The 20th Bangladesh Denim Expo starts June 10 in Dhaka with 50+ exhibitors. Agro-Value & Jobs: Calls grow to boost agro-industrial value-addition and tech/innovation for agro-industry growth. Digital Risks: Info minister urges an e-Safety plan to tackle fake news and digital threats as AI adoption accelerates. Logistics & Safety: A probe body was formed after a HSIA cargo village fire; separate enforcement fined transport operators in Sirajganj for overcharging. Health & Tech: BAEC held a meeting on cyclotron-based PET radiopharma demand; experts call for dedicated budget for hypertension drug access. Green Finance: Civil society pushes a Tk 25,000 crore revolving green finance facility and near-zero tax on renewable energy equipment.

RMG Trade: Bangladesh’s ready-made garment exports fell 3.41% to $35.31bn in July–May FY25-26, with EU still the biggest buyer (49.15% share) but down 4.88% and the US nearly flat (-0.04%); non-traditional market shipments also slipped 5.95% to $5.68bn. Labour & Factories: Al-Muslim Group in Savar laid off 1,868 workers from seven factories, triggering protests over alleged Labour Act violations and unpaid dues. Port Policy: Conflicting shipping ministry letters have revived debate over Chattogram Port’s New Mooring Container Terminal (NCT) lease to DP World, though the shipping secretary says negotiations are ongoing. Health & Cities: DSCC launched a dengue crash program after a survey flagged 63 of 75 wards at risk; meanwhile, the health minister warned of action against Ad-Din Hospital if its show-cause reply on six newborn deaths is unsatisfactory. Standards & Consumer Safety: Industries minister urged BSTI to strengthen metrology and testing to protect consumer rights and improve trust in locally made products. Transport & Infrastructure: Jamuna Bridge saw 40,580 vehicles cross in 24 hours with Tk 3.14cr toll collected; MRT-6 extended night services by 20 minutes from tomorrow. Agro-Industry: Meherpur mango harvest is ramping up toward a 40,000 MT target; Dinajpur papad makers seek government support to reach global markets. Energy/Industry Costs: CNG station owners demanded a commission hike from Tk 8 to Tk 13.96 per cubic metre, citing rising electricity and operating costs. Diplomacy & Regional Links: Bangladesh and Türkiye agreed to form minister-level defence/foreign affairs committees and hold annual 2+2 talks; BIMSTEC SG said the bloc is set to strengthen regional cooperation.

Energy & Cost of Living: Thousands in Dhaka rallied against repeated electricity and fuel price hikes, with protesters saying the burden is becoming “unbearable” for working people. Power Sector Policy: Bangladesh Energy Regulatory Commission (BERC) moves around tariff changes, including rollback/adjustments for lifeline and low-use consumers, while opposition and parties continue to demand withdrawal of hikes. Industry Infrastructure: Industries minister Khandaker Abdul Muktadir said a new BSCIC industrial estate will be built in Pabna soon, with road widening, boundary walls and drainage upgrades in existing estates and a review of plot pricing/fees. Trade & Manufacturing: Apparel export data shows garment exports slipping to $35.3bn in July–May, with knitwear and woven segments both easing. Food & Supply Chain Tech: TCB is proposing an AI-driven system to monitor prices and supply of essentials and connect farmers directly to buyers to curb hoarding and manipulation. Digital Security: A call for a national SMS security framework to curb rising fraud via fake messages. Logistics Safety: A HSIA cargo village fire was brought under control with no casualties reported. Transport & Mobility: Akij Venture Group launched two electric vehicles (BAW M8 and BAW E7 Pro), pushing clean mobility. International Business: Uber debuted in Nepal, expanding ride-hailing with Uber Bike plus car options and plans beyond rides.