| Date | Petit déjeuner | Déjeuner | Dîner | Snacks,Sucreries,Boissons et Fritures |
|---|---|---|---|---|
| 04 | Pain,Pois blanc,Œuf | Riz,Ruhi, Aubergine,Soupe aux lentilles,Pois blanc | Riz,Ruhi,Aubergine,Poulet | Beguni,Pois chiches,Yaourt sucré, Sucreries, Malta,Butter toast |
| 05 | Pain, Yaourt sucré, Sucreries | Pilaf,Poulet | --- | Mangue,Sucreries |
|
The woe called rising public debt |
Govt is planning to seek $2 billion foreign credit to mitigate challenges of energy security caused by ongoing war. Meanwhile, govt's debt service management has already crossed $3 billion matching the incoming flow of aid this fiscal year. Asian Development Bank hinted that it [would] provide credit to meet the emerging need from oil price shock. Ailing economy needs further cash to recover. And it is coming from foreign credit. Bangladesh's overall foreign credit stands at $113.51 billion at the end of December 2025. Govt borrowing accounts for 82% of the total foreign credit. Private sector accounts for the rest.(Source: Bangladesh Bank)
According to a study by IMF,global public debt reached 93.9% of GDP and projected to cross 100% by 2028(see "High Debt,Hard Choices" by Era Dabla-Norris and Rodrigo Valdes,March 2026,IMF,https://www.imf.org/en/publications/fandd/issues/2026/03/high-debt-hard-choices-era-dabla-norris). As the public debt rises,so does the interest payment. This fiscal year alone govt paid $950 million as interest payment. By the end of this fiscal year it would cross the billion [dollar] mark. The situation makes the task of resource mobilization even harder. The IMF study also shows that interest payments take away 21% of tax revenues in low income countries. This money could have been spent on social security programs and development programs.
Tax revenues that help financing the development and social security programs are not in a good shape. Against a target of Tk 3.25 trillion ,NBR managed to collect Tk 2.54 trillion of revenue till February this year, registering a shortfall of Tk 714 billion(Source: NBR). This year revenue target is set at Tk 5.54 trillion. Failure to meet revenue target means the money has to come from somewhere else. Borrowing is a popular option. As Bangladesh is scheduled to graduate from LDC countries within two years, overseas borrowing will be costly for us. Battered economy, poor credit ratings have already made costly the foreign credit. Too much borrowing from domestic sources translates into less credit to private sector. What is worrying too much borrowing amid high debt and inadequate revenue has consequences. The IMF study cautions:
"But today, the era of easy choices is over. Every dollar a government borrows without matching revenue implies higher taxes or lower spending in the future, at least to cover the additional interest the new debt generates. Beyond a certain point, more borrowing forces painful decisions—through austerity, inflation, financial repression, or even default."
Amid the grim fiscal situation, govt undertakes ambitious social security programs where chances of leakages are very high. Previous social security programs were not leakages free. Given no dramatic improvement in governance in the last one year, why will these new ones be different? Meanwhile, borrowed money will finance the deficit budget and tax revenues will go for paying the rising debt instead of development or social security programs. Earlier we used to take debt to finance various programs [aimed] for people and capacity building. Gradually we are entering into a phase where we need debt to pay older debts and interests. Social welfare, capacity building, human development and investment in infrastructure are [going to be] some of the badly hit areas. We need to check our spending and require serious commitment to reforms.
| Date | Petit déjeuner | Déjeuner | Dîner | Snacks,Sucreries,Boissons et Fritures |
|---|---|---|---|---|
| 28 | Pain,Poulet,Œuf | Riz,Ruhi,Moringa avec citrouilles,Gourde serpent,Courage amère,Soupe aux lentilles | Riz,Ruhi,Soupe aux lentilles,Courge amère,Gourde serpent | Vermicelles,Poa pitha |
| 29 | Pain, poulet | Riz,Beans,Petit poisson | Riz,Beans,Pianju(depuis marché),Œuf | Poa pitha |
| 30 | Pain,Gourde serpent | Riz,Feuilles de Moringa, Citrouilles,Pied de poulet | Riz,Poulet,Feuilles de moringa | Pois chiches,Riz gonflé |
| 31 | Khichuri,Œuf | Riz,Épinard malabar,Petit poisson | Riz,Épinard malabar,Petit poisson,Pois chiches | Vermicelles |
| 01 | Pain,Poulet,Œuf | Riz,Gangetic ailia poisson,Gourde serpent,Soupe aux haricots mungo | Riz,Soupe aux haricots mungo,Potato bhaji,Petit poisson | Vermicelles,Puri,Patate douce |
| 02 | Pain,Potato bhaji | Riz,Soupe aux haricots mungo,Poulet | Riz,Soupe aux lentilles,Potato bhaji,Petit poisson | Jhalmuri,Pianju,Poire,Patate douce |
| 03 | Pain,Poulet | Riz,Papaye,Pomme de terre,Soupe aux lentilles | Riz,Soupe aux lentilles,Papaye,Pomme de terre,Beguni,Pois blanc | Pois chiches,Riz gonflé,Poire,Pastèque,Ananas,Malta |
|
Formalizing our festival economy |
Eids have always been great drivers of augmenting domestic sales. This Eid is no different. Despite slow improvement in law & order, Eid economy is doing well according to some news reports. There has been no formal study of the size of Eid economy. Platform of shop owners claims it would be around Tk 3 trillion. It maybe an exaggerated figure. Unfortunately we do not have any market research institution that could corroborate the claim. Such institution could initiate a study and come up with the [approximate] size of Eid economy.
This kind of study helps policy intervention. So that govt incentives fall into the right hands. Policy makers will also have an idea about flow of money and links between key sectors. Now only news reports are key sources of this information. Govt can help float this kind of market research institution through public private partnership.
Undocumented transaction in many shops is an obstacle estimating true figure of festival economy. Currently there are 2.6 million shops across the country according to the platform of shop owners. But many do not have business identification number (BIN), which is required for paying VAT(see "Subdued Festival Economy" published here on March 23,2025.https://hoquestake.blogspot.com/2025/03/subdued-festival-economy.html?m=1). So govt does not get enough revenue from transactions take place during the festivals. Till March, revenue shortfall reached Tk 714 billion. If the shops were BIN registered , govt would get enough revenue just from the shop owners.
Moreover, revenue shortfall indicates govt may further borrow from the banks ,lowering the share of private credit. Squeezed private credit stalls expansion/growth of businesses ahead of major festivals. If funds like Equity And Entrepreneurship Fund (EEF),which remains unused throughout the year, of the central bank becomes available for shop owners during key festivals, then it will have major impact on the growth of these shops.
Another thing I notice is that govt provides bonuses to public servants during festivals of Eid and Bengali new year. This policy also influences private sector to give bonuses during the two major events. Altogether the policy boosts sales in the festival seasons. Similar kind of incentives given six months later may also increase sales later period of the year,which usually see dull period in sales revenue. Celebrating Autumn, Winter may be the occasions to choose for.
Informal nature of our festivals fails the govt to tap the potentials from them. They are great drivers of generating sales demand and growth of SME businesses. Bringing them into a formal structure will help govt to keep a close tab on the flow of money and augment the tax revenue.
| Date | Petit déjeuner | Déjeuner | Dîner | Snacks,Sucreries,Boissons et Fritures |
|---|---|---|---|---|
| 21 | Paratha,Poulet | Pilaf,Poulet,Gourde bouteille | Pilaf,Poulet | Vermicelles,Egg jorda,Jorda,Payesh,Tchana Tchat,Custard |
| 22 | Khichuri,Œuf | Riz,Poulet,Ruhi,Egg jorda,Gourde bouteille,Courge amère,Chicken kofteh,Yaourt sucré,Jorda,Gulabjamun | Riz,Poulet,Courge amère | --- |
| 23 | Paratha,Légumes | Riz,Courge amère,Soupe aux lentilles | --- | Jhalmuri(Riz gonflé avec tchana et tchanatchur),Vermicelles |
| 24 | Paratha,Poulet | Riz,Petit poisson,Aubergine,Gourde serpent | Riz,Petit poisson,Gourde serpent,Œuf,Pianju | Jhalmuri,Tchira |
| 25 | Paratha,Gourde serpent,Œuf | Riz,Petit poisson,Soupe aux lentilles,Épinard malabar | Riz,Soupe aux lentilles,Petit poisson,Épinard malabar | Jhalmuri(Riz gonflé avec tchana et tchanatchur),Banane,Patate douce |
| 26 | Pain,Gourde serpent | Riz,Feuilles de gourde bouteille, Poulet,Soupe aux lentilles | Pilaf,Aubergine avec sec poisson,Poulet | Puri,Paratha roll,Pastèque,Vermicelles |
| 27 | Pain,Poulet,Œuf | Riz,Moringa avec citrouilles,Soupe aux lentilles,Aubergine avec sec poisson,Poulet | Riz,Soupe aux lentilles,Poulet | Jhalmuri(Riz gonflé avec tchana et tchanatchur),Vermicelles |
|
War leads to further rise in inflation, |
Last week exchange rate of Taka reached 123.30 against US dollar. Now the rate settled at Tk 122.75 per USD. The ongoing war in the Middle East cast a shadow over remittance inflow and supply of energy through the [Strait] of Hormuz. Moreover, govt changed Bangladesh Bank governor abruptly and the new governor hinted to lower the policy rate while inflation rate increased further and hovering around 9.13% in February. In January ,it was 8.58%. In this backdrop, serious question raised over continuity of regulatory discipline.
Throughout the fasting month of Ramzan ,key kitchen items registered higher prices. A new war in the Middle East risks worsening the inflation by causing supply problems [for] energy and spiking the fuel price. Despite govt assurance of no fuel crisis at home, the long queue of motorbikes and cars in front of petrol pumps is a testament to panic prevailing at the ground. Central banks of major economies already shelve their plans to lower policy rate while ours one walks on a different direction. Furthermore, abrupt dismissal of governor sent a wrong signal abroad about commitment to reforms. It may delay improvement of our credit ratings, causing troubles to get foreign credit for private sector.
Taking a look at major macroeconomic indicators tells that time is indeed not right for a policy rate slash. During July-January period of 2025-26, export declined to $26.09 billion from $26.36 billion in 2024-25. Trade deficit increased to $13.79 billion in 2025-26(July-January) from $11.74 billion in 2024-25(July-January). Current account deficit declined to $381 million in 2025-26(July-January) million from $1.31 billion in in 2024-25(July-January),riding on growth of remittance. Remittance rose to $19.43 billion in 2025-26(July-January) from $15.96 billion in 2025-26(July-January)(See https://www.bb.org.bd/en/index.php/econdata/bop). Despite improvement in current account deficit, situation is not right for discarding the tight momentary policy. [Particularly] when the war may derail the growth of remittance. At one hand trade deficit is growing ,on the other rising import and uncertainty over remittance put overall macroeconomic situation at a precarious position. In this situation, lowering the policy rate will increase the depreciation pressure on Taka against other currencies. Any wild fall of Taka worsens inflationary situation through pass-through effect of the new exchange rate.
Moreover, further worsening of war will spike fuel prices and deteriorate inflation in advanced economies, where most of our exportable items go. This will cut the purchasing power of their nationals and lower overall consumption. Declining trend of export will further cause depreciation pressure on Taka. When exchange rate and inflation rate will both rise ,real effective exchange rate will fall further given denominator part of the formula remains same(look at the formula).
REER at period t= (Exchange rate index of a country x Inflation rate of the country)x 100÷(Average of trading partners' exchange rate index x weight x Average of inflation rates in partner countries)
Exchange Rate Index at t= (Exchange rate of a county's currency at t)÷(Exchange rate of a county's currency at base period)
So far US dollar appreciated against other currencies following the start of the war. Since we do trade with other partners in USD ,a stronger USD translates into depreciation of real exchange rate of Taka given other things remain same. However, inflation is likely to rise amid escalating war . When average of inflation rates in partner countries is higher than exchange rate of Taka and inflation at home,then Taka will appreciate in real term (see the formula).
Stability of Taka depends on many things. But so far the development indicates Taka is likely to depreciate further if the war turns out to be a protracted one. We coped with 40% depreciation of Taka all these years. Similar or more depreciation will be unbearable for us. So cautious monetary policy ,which implies a tighter one, will be good for us. Does the central bank have courage and commitment to do so?
| Date | Petit déjeuner/Début de jeûne | Déjeuner | Dîner | Snacks,Sucreries,Boissons et Fritures/Fin de jeûne |
|---|---|---|---|---|
| 14 | Riz,Courge amère, Ruhi,Banane,Lait | ---- | Patate douce | Pois chiches, Tchira(Riz battu avec lait),Pomme,Carotte,Tehari,Poulet,Vermicelles |
| 15 | Riz,Soupe aux lentilles,Poulet | --- | --- | Pois chiches,Riz gonflé,Tchira,Pianju,Tchop,Halim,Naan rôti,Jilapi,Datte,Pomme,Carotte |
| 16 | Riz, Ruhi avec moringa | ---- | --- | Pois chiches, Tchira(Riz battu avec lait),Pomme,Datte,Carotte,Tchop,Jilapi,Pianju |
| 17 | Riz,Poulet | --- | --- | Pois chiches,Riz gonflé,Datte,Pomme,Carotte,Vermicelles |
| 18 | Riz,Lait,Banane | --- | --- | Pois chiches,Beguni,Vermicelles,Pomme,Carotte,Khichuri,Œuf,Moringa avec tige de taro |
| 19 | Riz,Moringa avec sec ruban et tige de taro | --- | Pilaf,Poulet,Œuf | Pois chiches,Beguni,Pianju,Meat ball,Riz gonflé, Jilapi |
| 20 | Riz,Lait,Banane | --- | Riz,Shoal,Goutde bouteille,Œuf | Pois chiches,Beguni,Vermicelles,Pomme,Carotte |