Monday, 17th January, 2022
Monday, 17th January, 2022
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Private sector credit growth increases

Industrial production in June and July of the current fiscal year showed a 7.33% year-on-year growth

Recent data published by the Bangladesh Bank suggests that the banking sector saw a 10.11% private sector credit growth; though the monetary target set for the current fiscal year is 14.8%.

The credit growth was 10.7% in September 2019 and remained low ever since, coming down to 10%.

According to industry insiders, there has been an increase in import payments by 54% within the first five months of the current fiscal year, mainly due to a surge in imports of capital machinery; suggesting an increase in investments within the country.

There has been a strong consumer demand for yarn, capital machinery and intermediate goods in the country as these had a large contribution to the import bills.

The central bank’s latest data show that capital machinery import saw a 30% growth in the first five months of the current fiscal year. The data also shows that during that time, import growth of chemical fertilizer was 105%, yarn 103%, intermediate goods 70% and drugs and medicines more than 1000%.

All these suggest that the economy is getting back on track after the effects of the pandemic.

These rising import costs and increased demand is causing a surge in inflation, raising concerns for global central banks.

However, the Bangladesh Bank is not worried about the situation as the central bank is sticking to its expansionary policy whereas global central banks are trying to go for contractionary monetary policy to slow down the rise in inflation.

On the other hand, industrial production in June and July of the current fiscal year showed a 7.33% year-on-year growth.

The CMSME (Cottage, Micro, Small and Medium Enterprises) sector however needs support from the government in order to catch up with rates that large and medium-sized manufacturers are enjoying.

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