Bangladesh seeks help from the Asian Development Bank (ADB) to support the government food security after being hit by recent natural disasters and rapid increase in food prices. Asian Development Bank (ADB) will give $170 mm to cope with rising prices, particularly of food. The Manila-based bank will also provide $600,000 as a grant to help the government improve food security.

Contrary to the International Monetary Fund's (IMF) advice, Bangladesh Bank announced that it would continue to follow the expansionary monetary policy. The IMF had suggested the bank go the route of monetary tightening to curb rising inflation. However, Bangladesh Bank Governor Dr Salehuddin Ahmed claimed that monetary tightening would hamper the country's aim of growth and poverty reduction.

In Bangladesh's export processing zones (EPZs), foreign investment grew to $302 million in the 2007-08 fiscal, up from $152 million last year. Low labor costs and easy access to Asian markets are among the reasons for the surge in foreign investment. Because countries like Taiwan, Singapore, Malaysia, and Korea faced high labor and manufacturing costs in their own counties, they opted to invest in EPZs.

The National Board of Revenue is working to further free the taxation system from any hassle and corruption in order to motivate people to pay taxes voluntarily. The NBR chairman called attention to accountability and transparency in tax collection by the government officials.

There is a deficiency of adequate number of coins and bank notes that has taken the citizens into an unusual situation as they can not pay their dues in full. Temporarily a rumor of demonetizing the bank notes has caused a new problem as only few are admitting it.

Bangladesh has announced a cut to development spending by nearly 18 percent to USD 593 million. The shift is blamed on the low implementation of the allocated of the funds. Economists around the world have commented on the doubtful nature of the new target. The cuts have mainly affected the power, health, education, agriculture and transport sectors.

The chairman of Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) has reported that 15 companies have shown interest in bidding for the exploration rights in the offshore gas fields in the Bay of Bengal. After the completion of the bidding process, a Production Sharing Contract agreement would be signed with the suitable oil exploring companies in October of this year.

The recent high prices and lack of raw materials has forced nearly 100 of Bangladesh’s steel re-rolling mills to close in the past two years. The result has been the loss of tens of thousands of jobs. The closure of the mills has been caused by a sharp increase in global demand for scrap metal and a sharp decline in Bangladesh’s ship breaking industry. The unavailability of scrap metal from the ship breaking industry has been blamed on China’s massive recent involvement in the industry and growing environmental concerns about the industry.

The Asian Development Bank has predicted that Bangladesh will see a turnaround in its economy in the second half of the 2007-08 fiscal years as business confidence returns. The Asian Development Bank said the growth outlook points to the need to boost the business confidence, restore flood and cyclone-affected infrastructure and livelihoods and also augment the external competitiveness.

Bangladesh’s flag carrier Biman has protested the recent Indo-Bangla air services deal that allows more flights between India and Bangladesh. The pact allows Bangladeshi airlines to operate flights to 18 destinations in India and Indian airline Air India to operate flights from Sylhet for the first time. Biman Bangladesh officials however said the agreement will benefit India, not Bangladesh. They claim that India will receive more benefits than Bangladesh because more passengers will be carried through India to Europe and the US.