The recent student protest-propelled destruction of lives, property and assets coupled with devastating floods clouded the start of the new fiscal year as the factors intensified financial woes and created uncertainty about the road ahead.

During the recent student unrest several hundreds were killed and thousands were injured.

The value of the lives lost is immeasurable, but the prolonged unrest had cast a massive negative impact on the Bangladesh's roughly $450 billion economy.

Official data shows that the country incurred losses of over $1 billion daily after economic activities came to a halt amid the violence and subsequent government-imposed-curfew.

The primary textile sector counted losses worth $58.8 million while the apparel sector lost Tk 6,400 crore as per the rough estimates.

On the other hand, the internet blackout, difficulties in shipping goods from port, expensive air shipments, work order cancellations or offering big discounts to international buyers also mounted the losses.

Meanwhile, in a televised address to the nation Chief Adviser Dr Muhammad Yunus called on the RMG factory owners to come to an understanding with workers for keeping the factories open for the sake of navigating the economy of the country.

Mr Yunus was addressing the nation on the occasion of his completion of one month as the chief Adviser of the interim government of Bangladesh.

Around 114 garment factories have been closed today following labour unrest in the Ashulia, Savar and Gazipur industrial zones of Bangladesh.

Sources from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) confirmed the closure.

The industrial zones which are primarily considered as home to export-oriented garment factories has become a hotspot of labour unrest over the past two weeks.

Research shows that the main causes of Bangladesh’s readymade garment factories turbulence include lack of minimum facility and safety at work, substandard living conditions, deferred payment of wages and benefits, lower allowances and benefits but longer working hours, discrepancies in offering bonuses to male and female workers, international conspiracy, coercive role of the law enforcing agency, too much dependency on buyers, mistreatment by mid-level staff and seeking equal employment opportunities for male and female workers.

The recent labour uproar attributed to both external influences and internal factory issues, sources inside the factories claimed.

Of the closed factories, 54 were closed on a ‘no work, no pay’ basis, as per a provision in the labour law, the BGMEA said.

The Section 13(1) of the Bangladesh Labour Act, 2006 states that the owner can partially or fully close a branch or division of an establishment due to an illegal strike and the workers participating in the strike will not receive any wages.

Insiders explained that under the Section 13(1), workers will not be paid while the factories remain closed, which could further fuel their frustration.

On the other hand, 60 remaining factories have announced a leave with pay.

In several factories, workers have seen sitting idle. However, authorities fear that the situation could escalate if large groups of workers leave the factories and join the protest.

In Ashulia industrial areas where a number of factories remained closed for several days, reopened today, but workers refused to resume their works.

A heavy police contingent and army personnel were deployed in Savar industrial area, with workers gathered inside their factories.

Yesterday, several factories in the Jamgara, Narsinghpur and Pukurpar areas were vandalised by angry workers. In response, factory owners decided to shut the factories today.

Notices regarding the closure were seen hung on the gates of the factories last night and this morning.

A number of workers claimed that they went to their factories in the morning but found closure notices positioned on the gate.

They also alleged they had not served with any prior notice regarding the shutdown.

The closed factories are mainly located in Ashulia industrial area.

The sources said the owners had no other choice, but to keep their factories closed to protect the workers and assets of the industry.

Internally, many terminated workers who are reportedly blacklisted through the BGMEA database, also fuelled the chaos due to their unemployed crisis.

In another development, workers of Beximco Industrial Park also demonstrated blocking the Nabinagar-Chandra highway in Savar since morning today, causing long tailback on both sides of the highway.

After the workers’ unrest began and the situation became chaotic, many owners called for factory closures under section 13(1).

The factory owners' demands were also raised during a Bangladesh Garment Manufacturers and Exporters Association (BGMEA) meeting.

However, for the sake of the workers and the industry as a whole, collective decision is yet to be made.

The Bangladesh’s garments industry has been facing crisis even before the current round of labour mayhem.

The operations in the textile industry were severely impacted during the student protests, which led to curfew for several days and shut down of the industry.

The situation became to improve following the resignation of ex-prime minister Sheikh Hasina on August 5 and subsequently formation of an interim government-led by Nobel Laureate Dr Muhammad Yunus on August 8.

The recent floods in Bangladesh accompanied by frequent power shortages further aggravated the situation.

Bangladesh's garment industry plays a viral role in its economy and is a main performer in the global apparel market especially with the US, EU, UK and Canada being its largest export markets.

However, in the first half of 2024, RMG exports to the EU fell by 4.98% year-on-year to €8.72bn ($9.65bn), according to local media reports citing Eurostat data.

Experts believe that India’s RMG sector could benefit from the crisis in Bangladesh.

Meanwhile, Sandeep Jain, executive director of Ludhiana-based Monte Carlo Fashions, stated in an interview with Mumbai-based business news channel CNBCTV18 last month that the crisis could boost India’s garment industry by positioning the country as a preferred alternative for global buyers.

New Delhi-based research firm Primus Research suggests that Indian textile businesses could potentially gain an additional $300-400mn in monthly revenue if 10-11% of Bangladesh’s textile exports are redirected to India.

To take advantage on the situation, India is mulling strategic approach and infrastructural development for securing favourable trade deals, the Primus Research report published last month added.

Around 25% of garments units in Bangladesh owned by Indian companies—such as Shahi Exports, House of Pearl Fashions, Jay Jay Mills, TCNS, Gokaldas Images, and Ambattur Clothing—are anticipated to wrap up their operations to India, the report stated.

Indian cloth hubs like Tirupur, known for their vigorous industrialized competence, are expected to see a surge in orders.

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Dhaka, Bangladesh (BBN) - Bangladesh’s inflation as measured by consumers’ price index hit 11.66 per cent in the month of July on the point-to-point basis mainly due to higher price of food items.

The inflation jumped 194 basis points to 11.66 per cent in July this calendar year from 9.72 per cent a month before. It was 9.89 per cent in May, 2024.

The skyrocketing trend of inflation in July is not an unusual development as political unrest disrupted supply chain and led to commodity price hike in the domestic markets, economists explained. 

They also said uncertainty and hoarding might have also contributed to the rising inflation in July.

Food inflation surged 368 basis points to 14.10 per cent in July from 10.42 per cent a month ago while non-food inflation rose to 9.68 per cent from 9.15 per cent on the point-to-point basis.

The country’s food inflation experienced the hiking trend when food items are maintaining a falling tendency in the global market, according to a World Bank report.

In July 2024, food prices eased by 1.10 per cent, as the prices of grains decreased by 5.70 per cent, the World Bank said in its latest commodity markets report.

On the other hand, the rate of annual average inflation rose to 9.90 per cent in July from 9.73 per cent in June, according to the Bangladesh Bureau of Statistics (BBS)’s latest data, released on Monday.

The government has already set the inflation target for the current fiscal (FY), 2024-25, at 6.50 per cent. It was 9.73 per cent in FY’24.

The central bank of Bangladesh is expected to take measures further to ease inflationary pressure on the economy.

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Bangladesh Finance Minister AMA Muhith placing national budget. BBS file photo

Dhaka, Bangladesh (BBN)-Bangladesh Finance Minister AMA Muhith placed BDT over 4 trillion budget outlays for fiscal 2017-18 at the National Parliament of Bangladesh on Thursday.
The minister has begun placing the power-point presentation of the crucial yearly spending plan for the nation around 1:38pm (BST).
This is the eleventh budget for the finance minister.
The aim of the gigantic budget is to achieve 7.4 per cent economic growth by the end of FY 2017-18 and bring dynamism in the overall economic activities through improving infrastructure facilities across the country.
The finance minister projected the size of the new budget which is up by 17.5 per cent from BDT 3.40 trillion in the outgoing fiscal, according to officials.
The big budget deficit, as usual, would be met by bank borrowing and loans from multilateral lenders and donors, the officials explained.
The issues including growth, investment, poverty, food security and infrastructure, would likely to get priority in the next fiscal policy and allocation as the finance minister at the pre-budget discussions clearly put special attention on changing economic status of the country from low to middle-income group by 2021.
The next budget would also have some other special features those are designed in line with the government’s target of promoting the country to middle-income group by 2021.
There will have a set of proposals for reforming further the country’s revenue authorities by introducing new VAT law so the government could mobilise more internal resources and keep the budget deficit within 5.0 per cent.
Like in the previous year, the budget this year too will be presented on PowerPoint and will be made available on the website of the finance division –www.mof.gov.bd.
The budget documents will also be available on www.bangladesh.gov.bd, www.nbr-bd.org, www.plancomm.gov.bd, www.imed.gov.bd, www.bdpressinform.org and www.pmo.gov.bd.
Any person or organisation at home and abroad can send feedback, opinion or recommendation by filling up a form after downloading it from the website.
The finance minister will address a post budget press conference at the Osmani Memorial Auditorium in the capital Dhaka on June 2 at 3:00 pm on Friday.
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BBN/SSR/AD

The minister also proposed to reduce the corporate tax, except cigarette manufacturing companies, aiming to assist the country’s capital market.

He proposed to decrease tax rate from 42.5 per cent to 40 per cent for publicly traded bank, insurance and financial institutions.
Mr. Muhith also proposed to decrease tax rate from 27.5 per cent to 25 per cent for publicly traded companies.

In principle, there are plans for a comprehensive/maximum reduction in the rate of Import and Supplementary Duty in the budget for 2016-17 financial year which will eventually shift the burden of revenue collection to Individual and Corporate Tax along with Value Added Tax (VAT)

In an attempt to increase the number of taxpayers, the minister said the target is to raise the number of active taxpayers to 3.0 million by the end of the tenure of this government in 2018-19.
At the flag end of his budget speech, Mr. Muhith said: “I firmly believe, our march towards progress will remain unrelenting. I have always maintained that this is a country of immense potentials. I would like to reiterate that I am an incorrigible optimist.”

The Finance Minister said that in continuation of the ‘Vision 2021’, in this tenure, the government would present before the nation its ‘Vision 2041’, which will transform Bangladesh into a land of peace, happiness and prosperity by 2041.

Mr. Muhith placed the second budget of the present Awami League-led government since the general election took place in January 2014 in the parliament.

It was the 16th budget of the Awami League in its four terms of governance since the independence of Bangladesh.

Earlier in the afternoon, the cabinet at its special meeting approved the budget with Prime Minister Sheikh Hasina in the chair at the National Parliament.

The inflation target has been estimated at 6.2 per cent for FY 16 which has been set at 6.0 per cent for next two fiscal years (FY 17-18), a senior official associated with budget formulation told BBN in Dhaka.
“We expect that the rate of inflation will bring down at 6.2 per cent by the end of the FY 16 if a favourable natural environment and a stable political situation continues," the official noted.
The country's inflation as measured by the consumers' price index (CPI) increased slightly in the month of April on point-to-point basis mainly because of rise in prices of food items.

The inflation rate rose to 6.32 per cent in April 2015 from 6.27 per cent of the previous month on point-to-point basis, according to the Bangladesh Bureau of Statistics (BBS) data.

On the other hand, the annual average inflation came down to 6.57 per cent in April last from 6.66 per cent of the previous month.

"The inflation on 12-month average basis may come down to 6.5 per cent from the existing level by the end of June 2015 in line with the target for the FY' 15," the official noted.
The government earlier set the inflation target at 6.5 per cent for the FY' 15.

The policy markers’ have also expressed their opinion in favour of fixing the GDP growth to more than 7.0 per cent for the FY 16, according to the official.
The Ministry of Finance has already calculated the revised GDP growth target at 6.8 per cent considering the political uncertainty and domestic odds from the original target at 7.3 per cent for the outgoing FY' 15.

The central bank of Bangladesh has projected that the country would achieve the GDP growth at 6.5 per cent by the end of this fiscal.

The World Bank forecast that Bangladesh would achieve a 6.5 per cent GDP growth in the FY 16 from 6.2 per cent of the FY 15 while the Asian Development Bank (ADB) projected the target at 6.4 per cent from 6.1 per cent.

On the other hand, the International Monetary Fund (IMF) has estimated that the GDP growth rate would stand at 6.1 per cent in the FY 15. It may reach at 6.5 per cent by the end of FY 16.