5 key developments of the economy last week

Bangladesh's economy last week revolved around a proposed large allocation for education and health in the upcoming development budget, alongside industry pushback against bank resolution rules. Meanwhile, a decision was made to wind up five troubled non-bank financial institutions.

The financial sector also faced headwinds from a sovereign rating outlook downgrade, while authorities relaxed lending limits for big businesses to support industrial liquidity.

The following is a recap of those major stories as covered by Star Business.

Education, health to take 28% of ADP (May 10)

The government proposed Tk 83,557 crore for education and health under the FY2026-27 Annual Development Programme — nearly double the original current-year allocation and almost four times the revised figure — as it works toward raising spending in both sectors to 5% of GDP each, in line with the BNP's election manifesto.

The Tk 3 lakh crore ADP is to be finalised at a National Economic Council meeting on May 18.

BAB opposes allowing former owners to reclaim banks (May 12)

The Bangladesh Association of Banks urged Bangladesh Bank to reconsider provisions in the Bank Resolution Act 2026 that allow former owners of merged lenders to regain control by paying just 7.5% upfront, warning the terms could weaken accountability, invite moral hazard and damage investor confidence in the financial sector.

NBFI depositors to get back up to Tk 10 lakh (May 13)

Bangladesh Bank decided in principle to liquidate FAS Finance, Fareast Finance, Aviva Finance, People's Leasing and International Leasing from July, announcing that individual depositors with savings of up to Tk 10 lakh would receive full principal refunds, while larger deposits would be repaid proportionally.

Fitch revises Bangladesh outlook to negative amid Middle East fallout (May 14)

Fitch Ratings changed its outlook on Bangladesh from stable to negative, citing risks to remittances and energy import costs stemming from the Middle East conflict, while maintaining the country's long-term foreign-currency rating at B+.

BB eases lending limits for big businesses (May 15)

Bangladesh Bank temporarily raised the single-borrower lending cap to 25% of a bank's capital until June 2028, up from 15%, and halved the risk weight on non-funded exposures, drawing criticism from economists and bankers who warned that the changes could concentrate credit among large conglomerates.