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Finance Minister unveils proposed budget 797,000C for FY2024-25
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06 Jun 2024, 15:32
Finance Minister Abul Hasan Mahmud Ali is presenting the national budget for 2024-25 fiscal year in the third session of the 12th Jatiya Sangsad.
The finance minister started his budget speech titled 'Pledge to build a happy, prosperous, developed and smart Bangladesh' in the parliament from 3 pm on Thursday (June 6).
The size of the budget is Tk 7 lakh 97 thousand crore. The size of this year's budget is 4.6 percent more than the 2023-24 fiscal year. This is the 53rd budget of the country, the 25th of the Awami League-led government and the first budget of Finance Minister Abul Hasan Mahmud Ali.
According to the Ministry of Finance, the revenue target in the budget is Tk 5 lakh 41 thousand crore. The target of taking loans will be Tk 2,56,000 crore. The Annual Development Program (ADP) of Tk 2,65,000 crore has already been approved.
Recently, State Minister for Finance Waseqa Ayesha Khan said controlling inflation, diversification of export products, creating employment and increasing opportunities for marginalized people will be the priorities of this year's budget.
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Garment Export Trends in Europe: A Resilient Performance
Europe remains the largest destination for Bangladesh’s ready-made garments. Under the Generalized System of Preferences (GSP) scheme, Bangladesh benefits from duty-free access throughout Europe.
However, indirect and direct wars in Europe have led to persistent inflation in recent years, increasing living costs and reducing consumer spending. Despite these challenges, Bangladeshi garment exports to Europe have maintained a positive trajectory.
Positive Winds for Garment Exports in Europe
From January to October 2024, Bangladeshi garments worth $16.52 billion were exported to Europe, reflecting a modest growth of 1.43% compared to $16.28 billion in the same period last year. In contrast, China, the largest garment exporter to Europe, recorded a 1.14% growth, while Turkey, the third-largest exporter, experienced a 5.56% contraction in exports.
China: $21.82 billion (up from $21.58 billion in 2023)
Bangladesh: $16.52 billion (up from $16.28 billion in 2023)
Turkey: $8.59 billion (down from $9.10 billion in 2023)
Post-Pandemic Recovery and War-Induced Challenges
Bangladeshi garment exports surged after the pandemic, but the Russia-Ukraine war disrupted this trend. High inflation in Europe caused living costs to rise, leading to reduced spending on clothing. However, inflation is stabilizing, and the market is showing signs of recovery. Despite this, domestic challenges such as high fuel prices and political instability have tested Bangladesh's resilience.
Missed Opportunities in European Markets
Industry leaders believe Bangladesh could have achieved greater success in Europe, given its garment industry's strengths and duty-free advantages. Mohiuddin Rubel, a former director of BGMEA, noted that Bangladesh's growth in Europe is modest compared to the typical 10-12% growth rate.
“Despite duty-free access, we’re not performing as expected. Europe should naturally remain our top market, but other countries are taking larger shares,” Rubel remarked.
Low-Priced Orders: A Competitive Necessity
Bangladesh is accepting lower-priced orders to stay competitive and fully utilize its production capacity. Rubel explained, “Global demand has dropped, and competition has increased. Our capacity remains unchanged, but buyers are importing less. In a free market, they aim to buy at the lowest price, and we’ve had to comply.”
This strategy has slightly constrained export income growth. However, industry stakeholders see this as a necessary measure to adapt to market realities.
Preparing for Future Challenges
Rubel stressed the importance of enhancing efficiency, reducing costs, and boosting productivity to sustain profitability. He emphasized that merely pressuring buyers for higher prices isn’t a long-term solution. Instead, maintaining an ethical pricing standard and improving operational efficiency are critical.
Vietnam: A Growing Competitor
Vietnam, a significant rival, ranks sixth in Europe for garment exports. From January to October 2024, Vietnam achieved a growth rate of 3.31%, nearly double Bangladesh’s growth. However, Bangladesh’s total export volume of $16.52 billion far exceeds Vietnam’s $3.5 billion.
This disparity highlights the need for Bangladesh to remain vigilant, optimize efficiency, and sustain its position as a leading garment exporter to Europe.
Vegetable Prices Down While Rice, Chicken Prices Soar; Soybean Oil Crisis Persists
The vegetable market has shown some relief for the past two weeks as increased supply has brought prices down. However, rising rice, fish, chicken, and oil prices have disappointed consumers.
Vegetable Prices Down
This information was revealed during a visit to several markets in Dhaka, including Karwan Bazar and Mohammadpur Agricultural Market, on Friday (December 27).
Traders attribute the price drop to a reduction in political group extortion during transportation and less disruption in the markets. If this trend continues, prices may decrease further.
Rokon, a vegetable vendor at Karwan Bazar, said, "Supply has increased compared to before. Over the past week, prices of some vegetables have dropped by up to Tk10 per kg. If supply remains steady, prices will drop further."
Current market prices:
Eggplant: 50–60 BDT/kg
Bitter Gourd: 70 BDT/kg
Okra: 50 BDT/kg
String Beans: 60 BDT/kg
Radish: 20–30 BDT/kg
Stem Amaranth (Loti): 60 BDT/kg
Snake Gourd (Chichinga): 50 BDT/kg
Pointed Gourd (Potol): 35–40 BDT/kg
Other vegetable prices include:
Papaya: 30–40 BDT/kg
Carrots: 40–50 BDT/kg
Cucumbers: 50 BDT/kg
Tomatoes: 120–130 BDT/kg
Flat Beans (Shim): 40–50 BDT/kg
Turnips: 25–30 BDT/kg
Cabbage: 40–50 BDT per piece
Bottle Gourd: 50–60 BDT each
Besides this, coriander leaves are being sold at 30 BDT per kg, onion flowers at 30-40 BDT, new potatoes at 50 BDT, and old potatoes at 60 BDT per kilogram. Depending on the quality, each cauliflower is priced at 40 BDT, cabbage at 40-50 BDT, and gourds are sold for 50-60 BDT each.
The price of green chillies has also decreased. They are being sold at 50-80 BDT per kilogram, while the wholesale price is 40-60 BDT. Additionally, red spinach bundles are being sold for 10 BDT, jute leaves for 10-15 BDT, Malabar spinach for 30 BDT, bottle gourd leaves for 40 BDT, radish leaves for 10 BDT, stem amaranth for 10-15 BDT, water spinach for 10 BDT, and spinach for 15-20 BDT.
Onion Prices Fall
Prices of onions, especially the Murikata variety, have decreased due to increased supply. Last week, Murikata onions were 70–80 BDT/kg, but now they sell for 50–60 BDT/kg. Imported onions and older domestic varieties have also dropped by 30 BDT/kg.
Chicken Prices Rise Again
Despite government-imposed price controls in September, chicken prices have surged since mid-December. Over the past two weeks, prices have increased by 30–40 BDT/kg.
Current chicken prices:
Broiler Chicken: 200–220 BDT/kg
Sonali Chicken: 320–350 BDT/kg
Desi Chicken: 550–600 BDT/kg
White Layer Chicken: 230-240 BDT/kg
Red Layer Chicken: 280-300 BDT/kg
Ducks, depending on the breed: 550-650 BDT/per piece
Soybean Oil Crisis
Soybean oil prices rose by 8 BDT/litre on December 9, but even two weeks later, supply has not normalized. Retailers report that oil companies are providing limited quantities, insufficient to meet consumer demand.
Unstable Rice Market
Despite the ongoing Aman harvest season, rice prices remain high. Over the past two weeks, prices for fine rice have increased by 4–8 BDT/kg, while medium and coarse rice have risen by 2–3 BDT/kg.
Current rice prices:
Miniket: 74–78 BDT/kg
Atash: 60–62 BDT/kg
Coarse Swarna: 52–56 BDT/kg
Nazirshail: 76–85 BDT/kg
There is no relief in the fish market either, as fish continues to be sold at previously increased prices. Currently, per-kg prices are as follows:
Rui: 380 to 450 BDT
Katla: 400 to 480 BDT
Farmed Shing: 550 BDT
Farmed Magur: 500 BDT
Farmed Koi: 240 to 280 BDT
Coral: 750 to 800 BDT
Tengra: 550 to 700 BDT
Farmed Pangas: 180 to 230 BDT
Tilapia: 180 to 220 BDT
Additionally, per kilogram prices for other fish are:
Boal: 750 to 800 BDT
Poa: 450 BDT
Pabda: 350 to 450 BDT
Aair: 850 to 900 BDT
Local Koi: 1,300 to 1,700 BDT
Shing: 1,400 to 1,500 BDT
Shol: 900 to 1,000 BDT
River Pangas: 900 to 1,200 BDT
Some fish varieties, like local Catfish (Shing) (1,400–1,500 BDT/kg) and Boal (750–800 BDT/kg), are priced beyond the reach of average consumers.
Traders blame insufficient supply and profiteering by unscrupulous businesses. Regular monitoring and action are needed to curb such practices.
Chief Adviser to Inaugurate Trade Fair
The 29th Dhaka International Trade Fair (DITF) 2025 will be inaugurated by the Chief Adviser of the Interim Government, Professor Dr. Muhammad Yunus.
The information was shared by the Chief Adviser's Press Wing on Sunday, December 29.
It has been confirmed that the Ministry of Commerce and the Export Development Bureau are jointly organizing the 29th Dhaka International Trade Fair (DITF) 2025, which will begin on Wednesday, January 1, 2025.
The fair will be inaugurated by Professor Muhammad Yunus at 10:30 am at the Bangladesh-China Friendship Exhibition Center (BCFEC) in the newly developed city of Purbachal.
Remittance Inflow Reaches $2.42 Billion in 28 Days of December
In the first 28 days of December, remittance inflow to Bangladesh amounted to $2.42 billion. On average, the country received $86.4 million in remittances per day during this period.
This information was revealed in an updated report by the Bangladesh Bank on Sunday (December 29).
According to the report, $2.42 billion in remittance was received during the first 28 days of December. In comparison, $2.05 billion and $2.16 billion were received during the same period in November and October, respectively. The remittance inflow has increased in the first four weeks of December compared to October and November.
In the first four weeks of December, state-owned banks handled $689.58 million in remittance, specialized banks facilitated $92.69 million, private banks processed $1.63 billion, and foreign banks managed $6.92 million.
The report further stated that from December 22 to 28, $413.32 million in remittance was received. From December 15 to 21, the figure was $625.87 million. Between December 8 and 14, the country received $764.91 million in remittance, while in the first week of December, expatriates sent $616.45 million.
Earlier, in June this year, remittance inflow was $2.54 billion, while in July, the first month of the current fiscal year, the figure dropped to around $1.91 billion, marking the lowest inflow in the past 10 months.
In July 2020, Bangladesh recorded the highest remittance inflow in five years, with expatriates sending $2.60 billion that month.
Gold Prices Drop Again
The Bangladesh Jewellers Association (BAJUS) has again decided to reduce gold prices. This time, the price of 22-carat gold has been decreased by 1,050 BDT per bhori, setting the new price at 138,288 BDT per bhori. The revised prices will come into effect from today, Monday (December 30).
The organization confirmed this in a press release on Sunday evening (December 29). With this adjustment, gold prices in the country have been revised 62 times this year, including 35 increases.
According to the BAJUS press release, the price of pure gold in the local market has decreased. Considering the overall situation, new gold prices have been set. As per the updated prices, 22-carat gold will cost 138,288 BDT per bhori (11.664 grams). However, a 5% government-mandated VAT and a 6% minimum wage set by BAJUS must be added to the selling price. The cost of jewellery may vary depending on its design and quality.
Earlier on December 23, BAJUS reduced gold prices, lowering the price of 22-carat gold by 1,248 BDT per bhori, setting it at 139,338 BDT. At that time, the price for 21-carat gold was set at 133,005 BDT per bhori, 18-carat gold at 114,004 BDT per bhori, and traditional gold at 93,604 BDT per bhori, effective from December 24.
However, despite the drop in gold prices, the price of silver in the domestic market remains unchanged. A bhori of 22-carat silver is sold at 2,578 BDT, while 21-carat silver is priced at 2,449 BDT, 18-carat silver at 2,111 BDT, and traditional silver at 1,586 BDT per bhori.
Dhaka Trade Fair Opens Today
The curtain rises on the 29th edition of the Dhaka International Trade Fair (DITF) today. The Chief Advisor of the interim government, Professor Dr. Muhammad Yunus, will inaugurate the fair.
On Wednesday (January 1), the Chief Advisor will officially open the event at 10:30 AM at the Bangladesh-China Friendship Exhibition Center in Purbachal, a joint initiative of the Ministry of Commerce and the Export Promotion Bureau (EPB). Present at the opening ceremony will also be Commerce Advisor Sheikh Bashir Uddin and EPB Vice-Chairman Md. Anwar Hossain.
According to EPB sources, this year's trade fair will feature 362 stalls and pavilions, including 11 exhibitors from seven countries, such as India, Pakistan, Turkey, Malaysia, Indonesia, Singapore, and Hong Kong. The fair will highlight themes like the July-August uprising with special sections named "July Square," "Thirty-Six Square," and the "Youth Pavilion." For the first time, e-ticketing has been introduced, and online booking options are available for various stall categories. Additionally, the fair will provide dedicated BRTC bus services and discounted Uber rides to facilitate visitor transport.
Seminars focused on promising sectors and products will be held during the fair. For international entrepreneurs and businesses, there will be a dedicated sourcing corner and specialized zones for electronics and furniture. Facilities such as a technology corner for younger visitors and a sitting corner for senior citizens have also been arranged.
Around 300 BRTC buses will operate from Kuril, Bhulta, Gazipur, and Narayanganj for the convenience of visitors. The fair will run daily from 10:00 AM to 9:00 PM. Entry fees are set at 50 BDT for adults and 25 BDT for children. The organizers are optimistic about higher visitor turnout compared to previous years.
Special Loans of Tk 12,500 Crore Granted to Three Banks
To cover deficits from the outgoing year, Bangladesh Bank has provided special loans totaling Tk 12,500 crore to three private-sector banks. These funds were used by the banks on Monday, the final day of the year, to address deficits in their current accounts. As a result, the current accounts of these three banks were shown in surplus.
The three banks that received special loans are Islami Bank, National Bank, and AB Bank.
Officials from Bangladesh Bank stated that the loaned funds will be reclaimed by the central bank today (Wednesday) to balance financial accounts. Additionally, outside of the special loans, AB Bank received Tk 200 crore in separate liquidity support.
Reasons Behind the Loan
According to sources, these three banks have faced severe liquidity crises over the last 15 years due to various irregularities. Of particular note, Islami Bank—after coming under the control of the Chattogram-based S. Alam Group—suffered major misuse of funds, with the group extracting Tk 73,000 crore through irregular loans, representing almost 50% of the bank’s total loan portfolio.
Similarly, National Bank has been exploited by its stakeholders, including Sikder Group, alongside entities like Beximco, Maisha Group, Bashundhara, FMC, Saif Port Holdings, Saif Powertec, NASA, Fu-Wang Foods, SS Steel, and Karnaphuli Group, all of whom extracted large sums under the guise of loans. Many of these loans are now non-performing. Among them, the loans taken by the late Aslamul Haque's Maisha Group—a former ruling party MP—have already defaulted.
Other notable defaulters include Bloom Success International, Broadway Real Estate, Nurjahan Group, Diking Smart Battery, Ehsan Group, Millennium Group, Opex Sinha Group, Mariam Construction, RSA Capital, Keya Cosmetics, Independent TV, and GMG Airlines.
AB Bank has also been struggling with liquidity issues for years due to irregularities. One of its key founding figures is former BNP foreign minister M. Morshed Khan, under whose family control the bank operated for years. The bank has also been involved in significant fraud and irregularities.
The Central Bank's Intervention
Due to irregularities, these banks have long failed to meet the required Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) set by the central bank. The treasury bills and bonds they held for SLR purposes had already been mortgaged to secure loans from the central bank, leaving them without further collateral to raise funds.
As a result, Bangladesh Bank granted these special loans to ensure that the banks could show surplus balances in their current accounts on the last day of the year.
Of the Tk 12,500 crore loan, Islami Bank received Tk 5,500 crore, National Bank received Tk 6,000 crore, and AB Bank received Tk 1,000 crore. These loans come with an interest rate of 11.5%. The borrowed funds, issued on Monday, are to be returned on Wednesday (January 1).
Additionally, apart from the Tk 1,000 crore special loan, AB Bank was granted an extra Tk 200 crore to meet its daily liquidity needs.
