Department of Economics -EUB

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Economics department of European University of Bangladesh (EUB) is ready to launch their curriculum at their permanent campus following the competent chairmanship of Shakina Sultana Pomi.

📅 July 31, 2026 | Economic UpdateBangladesh Bank has cut its policy rate for the first time in nearly two years, lowerin...
31/07/2026

📅 July 31, 2026 | Economic Update

Bangladesh Bank has cut its policy rate for the first time in nearly two years, lowering it from 10 percent to 9.5 percent.

The decision came from the Monetary Policy Committee's first meeting of fiscal year 2026-27, chaired by Governor Md Mostaqur Rahman. The repo rate, the rate at which BB lends to commercial banks, had stayed at 10 percent since October 2024. The Standing Lending Facility rate also dropped, from 11.5 percent to 11 percent. The Standing Deposit Facility rate stays at 7.5 percent. The new rates take effect from August 2.

This matters because Bangladesh has run a tight monetary policy for years to fight inflation. That approach helped, but only partly. Point-to-Point inflation fell from a peak of 11.7 percent in July 2024 to 9.16 percent by June 2026. Still, that is well above the central bank's target of 7.5 percent. The MPC chose growth over further tightening this time. It cited weak private sector credit growth, sluggish investment, and slower job creation as reasons to ease policy.

For Bangladesh, cheaper central bank lending should trickle down to lower borrowing costs for businesses and households. Private investment has stayed weak amid years of political and economic uncertainty. A lower policy rate is meant to unlock credit for firms and support job creation. Mutual Trust Bank's CEO welcomed the move but warned that structural issues, especially in the energy sector, may limit its impact on credit growth.

This is also a symbolic shift. Mostaqur Rahman took over as governor in February, replacing Ahsan H. Mansur. He had signaled early on that he wanted to ease policy to support growth, a different approach from his predecessor's inflation-first stance. Bangladesh Bank had raised the policy rate eleven times before October 2024. Reversing course now, even with inflation still near 9 percent, marks a real change in direction for the central bank.

The bigger question is whether easing credit conditions will reignite inflation before it settles closer to target. That tradeoff between growth and price stability sits at the center of monetary policy everywhere, and Bangladesh's next few inflation readings will show whether this bet pays off.

This is a live example of the growth-versus-inflation tradeoff many of you are studying in Intermediate Macroeconomics this term.

📌 Sources: (The Daily Star, The Business Standard)

🇳🇴 Economy Spotlight #31/31 | NorwayNorway's nominal GDP is $0.60 trillion (IMF, 2026), completing our series of the wo...
31/07/2026

🇳🇴 Economy Spotlight #31/31 | Norway

Norway's nominal GDP is $0.60 trillion (IMF, 2026), completing our series of the world's top 31 economies.

Norway's economy is built on North Sea oil and gas, fisheries, and shipping—but what truly sets it apart is how it manages its oil wealth. Norway's Government Pension Fund Global, commonly known as the Oil Fund, is the largest sovereign wealth fund in the world, exceeding $1.7 trillion in assets, investing oil revenues for the benefit of future generations.

This model of intergenerational resource wealth management is the gold standard in development economics.

Norway also leads in renewable energy, with over 90% of its electricity generated from hydropower—demonstrating that fossil fuel wealth and green transition can coexist.

30/07/2026

Imported Inflation

📅 July 30, 2026 | Economic UpdateThe world's disinflation streak has stalled, and the IMF now says prices are heading hi...
30/07/2026

📅 July 30, 2026 | Economic Update

The world's disinflation streak has stalled, and the IMF now says prices are heading higher, not lower, through 2026.

In its July 2026 World Economic Outlook Update, the IMF projected global headline inflation will rise to 4.7 percent in 2026, up from 4.1 percent in 2025. The Fund kept its global growth forecast broadly unchanged, at 3.0 percent for 2026 and 3.4 percent for 2027, matching its April estimates. The inflation reversal marks a sharp break from the steady cooling trend policymakers had counted on since 2022, forcing central banks to reconsider how quickly they can ease policy this year.

Two forces are driving the shift. A war shock in the Middle East is raising energy costs for import dependent economies, while surging AI driven investment is lifting countries plugged into the global technology supply chain. Together these currents make the recovery uneven rather than uniform. The IMF also flagged that emerging market and developing economies will feel this divergence hardest, with their growth projected to slow to 3.8 percent in 2026 before recovering to 4.5 percent in 2027.

Bangladesh is not insulated. The Asian Development Bank's own July 2026 outlook projects Bangladesh's inflation at 9.0 percent this year and 8.8 percent next year, nearly double the global average the IMF now expects. As a major importer of fuel and food, Bangladesh's price level is highly sensitive to global energy costs and dollar strength. A stalled global disinflation cycle means imported price pressure could persist longer than Bangladesh Bank had hoped when it set its policy stance for the year.

The shift also reflects a widening split in the global economy. Energy importing and geopolitically exposed economies are absorbing most of the war related shock, while economies tied to AI driven technology investment are seeing demand support their growth instead. The IMF noted that downside risks, from renewed conflict to financial market repricing, are now more balanced than they appeared in April, but they remain firmly on the table for the rest of 2026.

Market watchers see the same wait and see mood taking hold. The stalled disinflation trend reinforces a higher for longer stance among major central banks, keeping the US dollar firm and leaving emerging market policymakers in a defensive posture as they judge how much room they have to cut rates. For Bangladesh, that argues for continued vigilance on the exchange rate and import costs even as domestic growth forecasts hold steady.

This is a live case study in how supply shocks and divergent growth engines can reshape a global inflation outlook within months.

📌 Sources: (International Monetary Fund, Asian Development Bank)

🇦🇪 Economy Spotlight #30/31 | United Arab EmiratesThe United Arab Emirates' nominal GDP reaches $0.62 trillion (IMF, 20...
30/07/2026

🇦🇪 Economy Spotlight #30/31 | United Arab Emirates

The United Arab Emirates' nominal GDP reaches $0.62 trillion (IMF, 2026), making it the thirtieth largest economy globally and one of the most dynamic in the Middle East.

Dubai has transformed from a desert trading post into one of the world's most important logistics, finance, and tourism hubs in just a few decades, a story of visionary planning and strategic positioning.

The UAE is actively diversifying beyond oil through aviation (Emirates Airline), real estate, financial services, and renewable energy. Abu Dhabi's sovereign wealth fund (ADIA) is among the largest in the world.

For Bangladesh, the UAE is critically important; it is one of the largest destinations for Bangladeshi migrant workers and a major source of remittances.

📅 July 29, 2026 | Economic UpdateS&P Global Ratings has downgraded Bangladesh's credit outlook from stable to negative, ...
29/07/2026

📅 July 29, 2026 | Economic Update

S&P Global Ratings has downgraded Bangladesh's credit outlook from stable to negative, a signal that global markets now see slower, riskier days ahead for the economy.

The agency affirmed Bangladesh's sovereign credit ratings at 'B+/B' but revised the outlook on July 27. The move reflects concern over weak domestic banks, tight government finances, and volatile global energy prices linked to the Middle East conflict. S&P now expects Bangladesh's real GDP growth to average just 4.5 percent over the next three years. That is well below the country's historical pace. The ten-year average real per capita income growth has fallen sharply, from 5.8 percent in 2022 to 3.3 percent today.

Banking sector weakness sits at the center of this warning. S&P flagged poor asset quality, especially at state-owned and Islamic banks, and warned that heavy government borrowing could crowd out private sector lending. High interest costs are also squeezing the budget. Debt servicing now consumes nearly 30 percent of government revenue, leaving little room for public investment while the tax-to-GDP ratio remains among the lowest in the region.

For students studying Bangladesh's macroeconomy, this is a live case study. It shows how banking sector health, fiscal space, and external shocks interact to shape a country's growth path. A weaker outlook does not mean an immediate downgrade, but it does mean ratings agencies see rising risk. That risk translates into higher borrowing costs for the government and, eventually, for businesses and consumers too.

Not every signal is negative. Foreign exchange reserves actually recovered to 32.9 billion dollars by the end of FY2026, helped by a 19 percent jump in remittances, giving about 4.5 months of import cover. Still, export data is less encouraging. Readymade garment exports fell 2.6 percent in the first eleven months of FY2026, and a new 10 percent US tariff on Bangladeshi goods, introduced on July 24, adds fresh pressure on the sector that drives most of the country's export earnings. S&P noted a similar warning from Fitch Ratings back in May, pointing to a pattern rather than a one-off assessment.

S&P said continued stability will depend on strong remittances, a rebound in garment exports, and sustained engagement with multilateral lenders like the IMF. The coming months will test whether Bangladesh's new government can turn that stability into durable reform.

📌 Sources: (The Daily Star, S&P Global Ratings)

🇦🇹 Economy Spotlight #29/31 | AustriaAustria's nominal GDP stands at $0.62 trillion (IMF, 2026), placing it twenty-nint...
29/07/2026

🇦🇹 Economy Spotlight #29/31 | Austria

Austria's nominal GDP stands at $0.62 trillion (IMF, 2026), placing it twenty-ninth among the world's largest economies.

Austria is a wealthy, stable European economy with strengths in machinery, chemicals, tourism, and financial services. Vienna, one of the world's most livable cities, serves as a gateway between Western and Eastern Europe, hosting numerous UN agencies and international organizations.

Austria's tourism sector is a major earner, driven by Alpine skiing, classical music heritage, and cultural tourism throughout the year. Its machinery and equipment exports are competitive across European markets.

Austria's economy also benefits significantly from its role as a financial and business services bridge into Central and Eastern Europe.

Admission is now open for Fall 2026 at the Department of Economics, European University of Bangladesh!Whether you're dra...
28/07/2026

Admission is now open for Fall 2026 at the Department of Economics, European University of Bangladesh!

Whether you're drawn to the big picture of Macroeconomics, the everyday logic of Microeconomics, or the data-driven world of Econometrics, our department gives you the tools to understand how economies really work and how to shape them.

We offer:
📘 BSS in Economics (4 years)
📗 MSS in Economics (1 year/2 years)
📙 MGDS (Master in Governance and Development Studies) (1 year)

Learn from experienced faculty, engage with real-world case studies grounded in Bangladesh's economy, and build a strong foundation in both theory and application. From market behavior to policy analysis, from statistics to strategic thinking, our curriculum prepares you for careers in banking, research, public policy, development work, and beyond.

📍 European University of Bangladesh
🎓 Education for Liberty

Apply now and take the first step toward a future in Economics.

📅 July 28, 2026 | Economic UpdateNvidia is reportedly weighing a $250 billion financing guarantee for OpenAI, a bet that...
28/07/2026

📅 July 28, 2026 | Economic Update

Nvidia is reportedly weighing a $250 billion financing guarantee for OpenAI, a bet that could reshape how artificial intelligence infrastructure gets built worldwide.

Nvidia is in talks to back OpenAI's lease of a 10 gigawatt data center campus in Ohio, developed by SoftBank's SB Energy unit. The guarantee would cover lease and construction financing, not chips. A separate deal worth up to $350 billion is also being discussed to fund OpenAI's chip purchases. Combined, the project could exceed $500 billion, making it the largest data center undertaking on record.

This matters because OpenAI is not yet profitable and lacks an investment grade credit rating on its own. Nvidia's backing effectively lets OpenAI borrow on Nvidia's strength instead of its own. Critics call this circular financing. Nvidia earns money by selling chips, then helps fund the very companies that buy those chips. Some economists compare the pattern to the dot com era, when firms bought from each other to make demand look larger than it truly was.

Bangladesh has no direct stake in this deal, but the gap it exposes is instructive. The country's draft National AI Policy 2026-2030 aims to secure GPUs for shared government use, yet recent assessments describe Bangladesh as facing real GPU scarcity. Meanwhile, Bangladesh's freelancing and IT-enabled services sector, built on over 650,000 workers and earning several hundred million dollars a year, increasingly depends on AI-enabled tools, with AI-linked software exports up roughly 54 percent this fiscal year. As global compute concentrates in a handful of firms backed by hundreds of billions of dollars, access and pricing for smaller economies become a live policy question, not a distant one.

The broader context matters too. AI capital spending has become one of the main engines of global growth forecasts for 2026, but it now rests on financing structures that some analysts see as fragile. Nvidia's stock fell nearly 5 percent on the news, a signal that markets are questioning why such guarantees are needed if underlying demand were secure.

For students, this is a live case study in market structure, credit risk, and how concentrated a critical global input, computing power, has become. Understanding who finances AI infrastructure, and on what terms, will matter for how every economy plans its digital future, Bangladesh included.

📌 Sources: (Al Jazeera, Reuters via CNBC)

🇸🇬 Economy Spotlight #28/31 | SingaporeSingapore's nominal GDP is $0.66 trillion (IMF, 2026)—extraordinary for a city-s...
28/07/2026

🇸🇬 Economy Spotlight #28/31 | Singapore

Singapore's nominal GDP is $0.66 trillion (IMF, 2026)—extraordinary for a city-state of just 6 million people with no natural resources.

Singapore is one of the world's busiest ports, a leading global financial centre, and a premier hub for biomedical research, petrochemicals, and regional corporate headquarters.

Its transformation from a poor British colonial port in 1965 to one of the wealthiest nations on Earth in under 60 years is a masterclass in development economics. Disciplined governance, openness to trade and investment, massive human capital investment, and zero tolerance for corruption drove this miracle.

Singapore is deeply relevant for Bangladesh as a model of port-led, trade-oriented development.

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