Expectations that political stability will return following the national election have renewed optimism among the country’s business community.
In particular, the formation of a government led by the BNP has created expectations of policy predictability and stability, gradually accelerating investment decisions. An early reflection of this trend is visible in the import of capital machinery.
Bangladesh Bank officials say capital machinery imports have increased in recent months compared to any previous period.
According to the latest data from Bangladesh Bank, the opening of letters of credit (LCs) for capital machinery imports rose by 24% to $1.079 billion in the first half (July–December) of FY26, compared to the same period a year earlier. This is the highest in the past two years.
After prolonged stagnation, the increase indicates a recovery in business confidence, according to relevant stakeholders.
Modernizing existing industries
Business leaders say priority is now being given to modernization, rehabilitation, and expansion of existing factories rather than establishing new industries. The ongoing gas and energy supply crisis remains a major barrier to setting up large new industrial units.
Former president of the Federation of Bangladesh Chambers of Commerce and Industry, Mir Nasir Hossain, said many entrepreneurs are reconsidering previously suspended investment plans in anticipation of improved conditions following the installation of an elected government. Most of the machinery, he said, will be used to enhance existing industrial capacity and update technology.
Sectoral statistics show LC openings for capital machinery increased between July and November of the current fiscal year in sectors including leather, pharmaceuticals, and packaging. However, imports of capital goods in the country’s main export sectors—ready-made garments and textiles—remain slow. Entrepreneurs expect investment in these sectors to rise if political stability persists.
LC openings rise
The overall picture is not entirely one-sided. During the same period, LC settlements fell by 16 percent to $904 million. This indicates that although new LC openings have increased, the pace of actual imports has not fully recovered. Imports of intermediate goods have also declined, signalling that industrial production has not yet returned to full momentum.
Policy researcher and economist M. Masrur Riaz said business confidence began to recover after the election was announced in August and the voting date was fixed in the second week of December. The formation of an elected government has ensured policy continuity and predictability, which are essential for investment. However, sustaining this confidence will depend on implementation of reforms, energy supply, and stability in the financial sector.
Managing director and CEO of private-sector Mutual Trust Bank, Syed Mahbubur Rahman, said a sense of comfort and confidence has emerged among businesses after the February election. This has influenced imports, particularly of certain capital machinery. However, he noted that demand for consumer goods ahead of Ramadan is also a major factor behind increased imports.
Highest LC openings in 11 months in January
Imports gained notable momentum at the start of the new year. According to Bangladesh Bank data, LC openings in January reached $6.61 billion, the highest in 11 months. LC settlements during the same period stood at $6.16 billion.
Bankers cited two main reasons behind the increase: rising imports of consumer goods ahead of Ramadan and new initiatives to import capital machinery in anticipation of post-election political stability.
A managing director of a leading private bank said dollar supply in the banking sector is currently relatively comfortable, with no major crisis in opening LCs. However, private-sector credit growth remains low, limiting full recovery in investment.
Managing director and CEO of Pubali Bank, Mohammad Ali, said LC openings have increased due to import activities centred around Ramadan. Businesses have become active in importing essential goods such as rice, lentils, edible oil, and dates ahead of the holy month. Every year, LC openings rise around this period, and this year is no exception.
Ramadan-driven import surge
Imports of consumer goods have increased significantly ahead of Ramadan. According to the Ministry of Commerce, monthly demand during Ramadan includes about 300,000 tonnes of soybean oil, 300,000 tonnes of sugar, 500,000 tonnes of onions, 150,000 to 200,000 tonnes of chickpeas, and 60,000 to 80,000 tonnes of dates.
Meanwhile, data from the National Board of Revenue show that in the past four months, imports included 400,000 tonnes of crude soybean oil, 370,000 tonnes of sugar, 225,000 tonnes of onions, 205,000 tonnes of lentils, 1.4 million tonnes of wheat, and 47,000 tonnes of dates.
Compared to the same period last year, soybean oil imports increased by 36%, sugar by 11%, lentils by 87%, chickpeas by 27%, peas by 294%, and dates by 231%.
