Private sector credit growth in Bangladesh has slowed to 9.84% for the 2023-24 fiscal year, down from 10.58% in the previous year, according to Bangladesh Bank. This decline is attributed to higher loan interest rates, which have risen from 8-9% to 15-16% over the past year, and reduced import levels, which have decreased by 11.11%. Credit growth was 12.62% in January 2023 but has steadily decreased, with a slight increase in March and May, only to fall back to 9.84% by the end of the fiscal year. The central bank’s target for credit growth was 10% for the January-June 2023 period. The contractionary monetary policy, aimed at controlling inflation, has led to increased borrowing costs and a liquidity crisis in banks, further exacerbating the slowdown. Experts highlight the need for reduced government borrowing, lower business operating costs, and better access to loans for small and medium enterprises to stimulate credit growth and enhance economic competitiveness.
Source for more details:
