Experts and stakeholders have raised concerns over the long-standing inflation that is severely impacting business growth and investment in Bangladesh.
They have called for immediate measures to control inflation and prevent further economic instability.
The call was made during the 12th Financial Sector Development Working Committee (FSDWC) meeting organised by the Business Initiative Leading Development (BUILD) on Tuesday.
The meeting, chaired by Nurun Nahar, deputy governor-1 of Bangladesh Bank (BB), brought experts and stakeholders together to discuss the persistent issue of inflation and its detrimental effects on business and investment in Bangladesh.
The discussions focused on the urgent need for coordinated measures to tackle high inflation, enhance financial inclusion, and restore stability in the financial sector.
At the outset of the meeting, BUILD CEO Ferdaus Ara Begum presented an update on the recommendations from the previous meeting.
She informed the attendees that several key initiatives, such as the implementation of online software for the Export Facilitation Pre-financing Fund (EFPF), safeguard measures for EFPF and policies aligning monetary and fiscal policies, have been successfully implemented.
However, some recommendations are still in progress, with explanations from the BB still awaited.
In her remarks, Nurun Nahar emphasised the importance of addressing structural inefficiencies within the economy. She acknowledged that inflation had been a persistent challenge but reassured the participants that Bangladesh Bank (BB) was committed to bringing inflation down to 7-8% by June 2025.
She also noted that BB is collaborating with the National Board of Revenue (NBR) to formalise the economy and bring about sustainable fiscal and monetary reforms.
Asif Haider, a research associate of BUILD, presented a policy paper that highlighted the long-standing inflationary issues and their negative impact on the economy.
According to the study, private sector credit growth fell significantly, with actual growth at just 7.3% in December 2024, far below the target of 9.8%.
Meanwhile, public sector credit growth surged to 18.1%, far exceeding its target of 14.2%.
The report attributed this discrepancy to several factors, including market regulation failures, the dominance of extortionists in local markets, high policy rates and ineffective supply chain management.
The study also highlighted the urgent need to reform the financial sector to address inflation.
Bd-Pratidin English/ARK
