Business leaders and economists have voiced concern that high inflation, a record slowdown in private-sector credit flow, high interest rates and the energy crisis are putting pressure on private investment and industrial output. They said restoring the economy’s desired momentum will be difficult without a stable, predictable and investment-friendly policy environment.
The concerns emerged at a seminar titled “Fiscal Year 2026 Biannual Economic Outlook: Fiscal and Monetary Policy Perspectives and Private Sector Expectations,” organized Saturday, August 22, by the Dhaka Chamber of Commerce and Industry (DCCI).
DCCI President Taskin Ahmed presented the seminar’s keynote paper. He said public-sector credit growth stands at 25.9 percent this fiscal year, while private-sector credit flow has fallen to just 5 percent, a major concern for investment.
He said sustained high inflation, high interest rates on loans and the energy crisis have driven up the cost of doing business over an extended period. In the long term, he said, the capital market needs to be strengthened to reduce reliance on bank loans, alongside ensuring uninterrupted utility services in industrial zones.
Taskin Ahmed also highlighted global economic challenges. He said the global growth target for 2026 stands at 3.1 percent, and that trade barriers, the Middle East crisis, supply-chain disruptions, rising oil prices and higher freight costs are driving a downward trend in investment and trade worldwide.
He added that actual credit flow to small, medium and micro enterprises is stuck at just 16.8 percent against a target of 25 percent. As business costs have risen, the default-loan rate in this sector has also climbed to 24.1 percent.
To address the situation, he proposed expanding cash-flow-based lending through digital assessment rather than traditional collateral-based loans, and setting up a special fund for purchasing affordable equipment.
ICC Bangladesh President Mahbubur Rahman said inflation has still not fallen to the expected level. At the same time, he said, private-sector credit flow is at its lowest point in a long time, investment remains stagnant, and many industrial establishments are unable to operate at full capacity.
He said high interest rates, rising production and import costs, exchange-rate pressure and uncertainty in energy supply have significantly increased the cost of doing business. Given the private sector’s important role in employment, industrialization, export expansion and revenue collection, he said, it is essential to boost confidence and competitiveness in this sector.
Simeen Rahman, group chief executive officer of Transcom Limited, said that although the budget contains business-friendly policies, the desired momentum has not materialized in the private sector. High interest rates, inflation, a high rate of default loans and heavy government borrowing from the financial sector are hurting small and medium entrepreneurs the most, she said.
She said industrial production is falling because of high raw-material costs, and called for priority initiatives to improve the efficiency of port, customs and logistics services.
Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, said inflation is rising abnormally and there are structural coordination weaknesses between monetary policy and the budget. He emphasized digitalizing the tax system and building a skilled workforce.
He said that without ensuring energy access and other necessary supportive conditions, lowering interest rates alone will not be enough to attract domestic and foreign investment.
Dr. A K Enamul Haque, director general of BIDS, told the seminar that sustained high inflation in a remittance-dependent economy is a matter of concern. Amid global economic volatility, he emphasized increasing liquidity in the banking sector and ensuring an overall business-friendly environment to maintain stability in the domestic economy.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report