The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) warns that the government’s higher bank borrowing to cover the Tk 256,000 crore budget deficit (4.6% of GDP) will limit private sector credit, negatively impacting investment and employment. The government plans to borrow Tk 160,900 crore from internal sources, with Tk 137,500 crore from banks, exacerbating existing interest burdens and stifling private sector growth.
FBCCI suggests borrowing from foreign sources at lower interest rates instead. Despite setting a 6.75% GDP growth target and a 6.5% inflation target, FBCCI President highlights challenges in achieving the latter, given current inflation at 9.89%. The FBCCI also calls for raising the tax-free income limit, reconsidering the removal of Advance Income Tax and Advance Tax at import levels, reducing export tax deduction, and reevaluating the 1% duty on capital machinery imports. They emphasize thorough scrutiny of loan applicants to prevent defaults.
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