Private sector credit flow grows 9.9pc in April
FE REPORT | Monday, 3 June 2024
Bank lending to the private sector grew by 9.9 per cent in April this year, a decline from the 11.28 per cent growth in the same period of the previous year, according to Bangladesh Bank.
In March 2024, the private sector credit growth stood at 10.49 per cent year-on-year, down from 12.03 per cent in March 2023.
Economists say the economy has been facing a constant problem due to record-high interest rate in the banking sector in recent months and prolonged higher headline inflation.
A high interest rate has already started to take its toll, as most analysts and economists have estimated a negative growth rate in the current fiscal year.
"There is no chance to run a business with such a high interest rate and an unprecedented inflation," Dr. Zahid Hussain, a former lead economist of the World Bank told the FE.
As interest rates are much higher, businesses cannot sustain in this environment, he added.
He also said the central bank may consider further increase in its policy rate to address the ongoing inflationary pressures on the economy.