.png)
Looking Ahead: Building a Better Bangladesh
Accelerating Investments in Transportation Infrastructure
Bangladesh is earmarking substantial funds for transportation infrastructure development in fiscal years 2025 and 2026, with allocations of 963.9 billion and 1.06 trillion Bangladeshi taka, respectively. These investments will primarily target roads, railways, waterways, civil aviation, and telecommunications, aiming to boost income levels by 2031 and position Bangladesh as a developed country and regional hub for international passenger traffic by 2041. Railway sector reforms include expanding and modernizing the network, constructing new lines, and upgrading existing ones. The MRT-1 metro project in Dhaka seeks to enhance road conditions and mobility. Road transportation initiatives involve creating multi-lane highways and speed corridors, as well as repairing and expanding existing roads, totalling 1,100 km of expansion, 1,250 km of repairs, and 450 km of highway reconstruction, all geared towards fostering economic development and improving citizens' quality of life.
Launching Satellites for Disaster Monitoring and Agricultural Management
Shahjahan Mahmood, chairman of Bangladesh Satellite Company Ltd, revealed plans for the second satellite to be finalized within 2-3 months and launched in 2-3 years. The new satellite, "Bangladesh Earth Observatory Satellite," will focus on disaster monitoring, agricultural management, and environmental assessment. Mahmood expressed hope that the first satellite's lifespan could extend to 18 years due to a successful launch. Launched in May 2018 for Tk 2,765.66 crore, Bangabandhu-1 supports various TV stations, including 26 foreign channels. In September 2023, a Letter of Intent was signed for the Bangabandhu-2 Earth Observation Satellite System between Bangladesh Satellite Company Ltd and Airbus Defence and Space SAS, France. Foreign Minister Hasan Mahmud emphasized that the agreement with France will aid Bangladesh in addressing challenges posed by the 4th industrial revolution. The event also featured speeches from State Minister for Telecom and ICT Zunaid Ahmed Palak and Posts and Telecom Division Secretary Abu Hena Morshed Zaman.
Bangladesh: Economic Updates
Controlling Inflation as the IMF Pledges $1.1 Billion Loan
Bangladesh has taken three significant measures to address high inflation and bolster its dwindling foreign currency reserves. Inflation peaked at 9.81% in March before easing to 9.24% in April, still above the government's target. Foreign reserves dropped to $19.82 billion from a peak of $48.2 billion in August 2021. In response, Bangladesh Bank introduced a crawling peg system for the taka, allowing it to weaken against the dollar. The central bank set the peg at 117 taka to the dollar, a 6.3% devaluation. This system grants banks more flexibility to set rates reflecting true market value and serves as a step toward a fully market-based system.
These changes align with an IMF visit, during which the IMF pledged a $1.15 billion loan and endorsed Bangladesh's new crawling peg system for the taka to allow greater exchange rate flexibility. Economists see these measures as essential for addressing inflation and dwindling foreign reserves, aiming to enhance policy rate effectiveness, increase interest rate flexibility, and align the exchange rate with market dynamics.
Gold Prices Continue to Increase
Jewellers in Bangladesh have increased gold prices by Tk 1,831 to Tk 117,281 per bhori (11.664 grams). As of today, one gram of 22-carat gold will cost Tk 10,055, according to the Bangladesh Jewellers Samity (Bajus). This decision was made by Bajus' pricing and price monitoring committee in response to rising pure gold prices in the local market. Gold prices have been climbing for over a year due to international market trends and domestic supply volatility. On March 19, Bajus reduced the gold price from a previous high of Tk 112,907 to Tk 111,158 per bhori. Although Bangladesh imports minimal gold, local prices are closely tied to international trends. The country's annual gold demand ranges between 20 and 40 tonnes.
Bangladesh: Industry-Specific Updates
The USDA Launches the Bangladesh Climate Smart Livestock Initiative
The United States Department of Agriculture (USDA), in collaboration with the Ministry of Fisheries and Livestock and the Bangladesh Livestock Research Institute, has initiated the Bangladesh Climate Smart Livestock project. With an investment of over $34 million over five years, this project aims to enhance efficiency, promote climate resilience, and encourage sustainable innovations in the livestock sector. Targeting 16 districts and benefiting over 250,000 livestock farmers, the project will introduce advanced production technologies, improve animal health, and reduce greenhouse gas emissions. The project aims to increase livestock sales by $940 million over five years by linking producers to end buyers and facilitating access to investment capital. This initiative underscores the commitment of the United States to support Bangladesh in implementing climate-smart agricultural practices to adapt to and mitigate the effects of climate change.
Leather Firms Face Price Reduction Due to Regulatory Non-Compliance
The environment minister of Bangladesh, Saber Hossain Chowdhury, addressed concerns over the dropping prices of leather products in the global market, which is attributable to poor compliance. Despite efforts, export revenues in the leather sector have remained stagnant at $1.2 billion, far from the desired $10-12 billion target. Chowdhury proposed rationing the use of the central effluent treatment plant (CETP) among tanneries to reduce pollution during the peak leather processing season. He emphasized the need for collective action to address challenges in the tannery sector, including upgrading the CETP with technological assistance from the European Union and other developed partners.
Energy Efficiency Could Save $460 Million Annually on LNG Imports
A recent Institute for Energy Economics and Financial Analysis (IEEFA) report proposes that instead of increasing liquefied natural gas (LNG) imports to meet rising domestic demand, Bangladesh could save $460 million annually by adopting energy efficiency measures. Lead Analyst Shafiqul Alam points out how Bangladesh's reliance on cheap LNG has become a financial burden, especially with global fuel price fluctuations and domestic economic challenges. Despite industries and the power sector favouring LNG, the report highlights the inefficiency of gas-fired captive power generation.
Replacing old, inefficient generators with newer models and utilizing waste heat could reduce LNG demand by 21%, resulting in significant cost savings. While initial investment is necessary, the report suggests it can be recovered within a few years. It stresses the importance of enhancing energy efficiency to adapt to the changing energy landscape. It recommends policy interventions such as grid improvement, expansion of renewable energy, and addressing energy inefficiencies in industries. Additionally, the report calls for increased government support, incentives, and access to finance to drive Bangladesh towards a more sustainable energy future.
Become a member of our website for more updates!
Comentarios