Bangladesh Faces Rising Inflation Pressures

• The World Bank revised Bangladesh’s FY25 growth forecast to 4%, highlighting liquidity challenges Source

• LC confirmation charges surged to 4%, up from 2.5%–3%, intensifying import costs and inflationary pressures Source

• Gold prices fluctuated this week, first rising by BDT 2,822 per bhori before dropping by BDT 1,890 Source

• Japan unveiled a $140bn stimulus package to boost consumer spending and aid small businesses Source

• Rich nations pledged $300bn annually for developing countries to combat climate change under a COP29 agreement Source

• JICA committed 382bn yen to Bangladesh’s Jamuna Bridge project, boosting connectivity and development Source

• Bangladesh plans to settle $450mn in power sector dues to meet IMF conditions and stabilize finances Source

• Bangladesh’s EU exports may drop by 20%, impacted by LDC graduation and the EU-Vietnam FTA Source

• The US announced new tariffs of 25% on Mexico and Canada, shaking trade relations Source

• Revenue collection fell 1% YoY, tightening fiscal space and curbing public spending Source

Banking & Economy

• Bangladesh Bank Introduces Longer-Term Bills: To combat excess liquidity and inflation, Bangladesh Bank is introducing two longer-term bills alongside existing short-tenure ones Source

• Revenue Collection Declines by 1%: Revenue collection in the first four months of FY25 dropped by 1% YoY, raising concerns about fiscal constraints and development spending Source

• Government to Accelerate ADP Spending: Ministries have been urged to expedite project execution to counter economic slowdown amid record-low ADP implementation of 7.9% from July to October Source

• Overdue Import Payments Clarified: Bangladesh Bank instructed banks to resolve $500mn overdue import payments to stabilize the forex market Source

• Sonali Bank Seeks Bonds for Debt Relief: Sonali Bank proposed issuing BDT 60bn bonds to settle sugar mills' loans, addressing debt burdens Source

Trade & Commerce

• Gas Shortages Hit Industrial Output: Gas supply issues have caused disruptions, leaving many industries struggling to maintain operations Source

• Exports to EU Could Drop by 20%: LDC graduation and the EU-Vietnam FTA could result in a 20% decline in Bangladesh’s EU exports, particularly affecting apparel and leather Source

• Importers Get Extended Loan Repayment Periods: Import-dependent businesses struggling with currency depreciation will now have up to 8 years to repay loans, easing financial pressures Source

• Efficient Trade Crucial for LDC Graduation: Streamlined cross-border trade will be essential for Bangladesh’s smooth transition from LDC status, according to ICCB Source

• Complex Tax Structure Stifles SMEs: A study revealed that 57% of SMEs struggle with tax complexity, highlighting the need for reforms to facilitate compliance Source

• Venture Capital Urged for Startups: Experts emphasized the need for venture capital and private equity to support Bangladesh's transition to a knowledge-driven economy Source

International

• Foreign Investors Highlight Concerns: International investors cited issues like law and order and unreliable energy as major challenges during talks with the Chief Adviser Source

• 70% of Japanese Firms Face Tax Hurdles in Bangladesh: Japanese companies listed legal and tax issues, along with political instability, as key obstacles to investment in the country Source

• Labor Reforms Essential for Growth: A US delegation underscored the importance of labor reforms to strengthen democracy and ensure sustainable economic growth Source