Despite private sector credit growth falling to 5% in May,2026, the decision to keep the policy rate unchanged at 10% is highly disappointing for the business community. In this regard, the Dhaka Chamber of Commerce & Industry (DCCI) expresses its deep concern. Although a contractionary monetary policy has been maintained for the past four years, inflation has not been brought under the desired level. Instead, it increased to 9.42% in May, the highest among South Asian countries. On the other hand, the recently approved BDT 9.38 trillion national budget introduced various tax and duty incentives aimed at expanding businesses, encouraging private investment, and accelerating industrialization.
However, these growth-oriented fiscal measures are not reflected in the new monetary policy, indicating a clear lack of co-ordination between fiscal and monetary policies. Moreover, maintaining a high policy rate continues to limit the scope for reducing the cost of borrowing for businesses.
DCCI welcomes the BDT 60 billion refinancing and incentive package announced by Bangladesh Bank to revive business activities. However, drawing lessons from past experiences, it is imperative to ensure the transparent, efficient, and effective implementation of this fund. CMSMEs, export-oriented industries, and other productive enterprises that have already been severely affected and are struggling to survive should be able to access this facility through simplified eligibility criteria, minimal documentation requirements, and a faster approval process.
While reviving industries that have already ceased operations is important, providing priority support to businesses that are currently at risk of closure is even more critical. Therefore, DCCI urges that the incentive package be disbursed swiftly and effectively to genuinely affected entrepreneurs and businesses.
Furthermore, the Government’s increasing reliance on bank borrowing has become a matter of serious concern. With public sector credit growth near about 26%, well above the target, a significant share of the banking sector’s limited liquidity is being absorbed by the Government, leaving insufficient credit available for the private sector which is targeted at 6.8% in December, 2026. Regardless of how attractive the fiscal incentives announced in the national budget, their intended impact will remain limited without adequate and affordable access to financing.
Therefore, DCCI believes that closer coordination between monetary and fiscal initiative is essential to ensure greater policy coherence between fiscal and monetary measures and to support sustainable private sector-led economic growth containing all economic challenges.
