Budget not conducive for investment: BCI

The proposed national budget for fiscal year 2025-26 does not offer a conducive environment for investment and lacks the direction needed to drive industrial growth, said Anwar-Ul-Alam Chowdhury, president of the Bangladesh Chamber of Industries (BCI).

In his reaction, Chowdhury highlighted several concerns across fiscal, industrial, and macroeconomic fronts, noting that the budget appears to be more focused on meeting revenue targets than on fostering business confidence.

"The budget, in broad terms, cannot be considered investment friendly. Revenue measures have relied heavily on increasing both corporate and individual taxes," he said.

He further pointed out a rise in taxes on construction materials, which will affect the housing sector.

"Banking interest rate remains high, energy costs are elevated, and supply remains unreliable. Businesses can't access consistent gas or electricity," he observed.

Transportation costs have also surged, adding further pressure to operational expenses, he said. 

Chowdhury criticised a decision for raising turnover tax for small entrepreneurs from 0.6 percent to 1 percent, saying it would disproportionately hurt micro and small businesses already struggling to stay afloat.

"These policies are going to make our industries even less competitive," he warned.

"Yes, some of these measures may be aimed at satisfying IMF (International Monetary Fund) conditions, but there's no clear roadmap in the budget to ensure the domestic and export sectors grow in return," he said.

Chowdhury expressed concern that without strong industrial support, Bangladesh could lose its competitive edge globally.

Although the budget forecasts a decline in inflation, questions remain over its credibility. "Prices continue to rise. Unless people reduce consumption drastically, there is little chance inflation will ease," he said.

With household savings depleting rapidly, including from encashment of savings certificates, inflation has shown little signs of abating, he pointed out.

"People's purchasing power has eroded, employment opportunities are scarce, and private investment is drying up amid uncertainty over gas, electricity, law and order, and political stability," he added.

"There is no political stability. No one knows when—or if—elections will be held," said Chowdhury, calling the situation deeply unsettling for business owners.

"In this environment, entrepreneurs are playing defence—focused solely on survival, not expansion," he said.

According to the BCI chief, these trends will likely lead to further job losses and lower incomes across the board. "Inflation will not ease meaningfully unless people stop buying altogether—a scenario that spells deeper economic contraction," he said.