Economist and Chief Executive
The VAT on all types of plastic products at the production stage has been increased from 7.5 percent to 15 percent. The tax on cotton yarn at the production stage has been raised from Tk 3 to Tk 5 per kg, and the same applies to yarn made from artificial fibres or blends. Additionally, VAT on blade production has also been increased.
The Budget for the fiscal 2025–26, estimated at Tk 7.9 trillion is a contractionary one targeting realistic GDP growth and lower inflation at 8%. The floating exchange rate has been announced considering high foreign exchange reserve at USD 27.4 billion. Budget has given long term projection, sometimes up to 2030 showing optimism for future economic growth. However, the country at the moment is in a transition towards LDC graduation, declining growth in agriculture (from 3.30% to 1.79%), lower investment to GDP ratio (29.38%), SDGs, uncertainty because of Reciprocal tariff by USA, also non-tariff barriers by neighboughring country.
Honorable Chief Advisor Dr. Muhammad Yunus is set to visit China on the eve of 26th March 2025 where Chinese President Xi Jinping will send a special chartered flight for the Bangladeshi counterpart. This gesture of the Chinese president is a demonstration of his unwavering support for the Interim Government of Bangladesh culminating in deeper collaboration as enshrined in the amicable relationship between the two countries based on people-people diplomacy. China is a political partner and at the same time an Industrial and Business partner for Bangladesh. Bangladesh can explore a number of new opportunities for increasing bilateral trade and at the same time get support from China to be competitive in the Post-LDC stage.
Impact of high inflation on bank savings
It has been less than two and a half months since the interim government took charge, making it premature to conduct an in-depth analysis of its successes or failures. This government assumed responsibility amid complex challenges in both the political and economic realms. Its primary duty is to enact effective reforms in political and economic sectors to facilitate broad-based, participatory national elections that are considered credible both nationally and internationally. With this objective, the government has embarked on various reform initiatives, forming several committees to propose recommendations, which are expected within the next three months.
Business Initiative Leading Development (BILD) Executive Director Ferdaus Ara Begum has emphasized the critical role of a robust banking sector in ensuring sustainable and effective economic development. Describing the banking sector as the lifeline of a country's economy, she highlighted the need for easy access to bank loans, particularly for entrepreneurs in the small and medium-sized enterprise (SME) sector. She stressed that developing the SME sector is essential for it to serve as a backward linkage to larger industries. Ferdous Ara Begum shared these insights in an exclusive interview with 'Views Bangladesh,' conducted by economic writer MA Khaleq and the Assistant Editor of Views Bangladesh, Girish Goiric.