Bangladesh central bank unveils US$4.9 billion stimulus as growth slows

DHAKA: Bangladesh’s central bank on Saturday announced a 600 billion taka (US$5 billion) stimulus package to revive shuttered factories and support businesses as economic growth slows.

The package is aimed at restarting production, creating jobs and restoring business confidence, as export-oriented industries, particularly the ready-made garment sector, grapple with weaker global demand, higher input costs and supply chain disruptions.

Rising import bills have also added pressure on the economy amid geopolitical tensions in the Middle East.

Bangladesh Bank Governor Mostaqur Rahman said the stimulus includes a 410 billion taka refinancing fund raised from banks with excess liquidity through long-term deposits of at least three years at a 10 per cent interest rate.

The package also includes a 190 billion taka fund drawn from the central bank’s own resources and backed by a government guarantee.

The largest allocation, amounting to 200 billion taka, will be used to reopen closed and distressed factories and support businesses in the services sector. The central bank estimates the programme could help create about 250,000 jobs.

Another 100 billion taka has been earmarked for agriculture and the rural economy to support food production and rural employment, officials said.

The refinancing scheme is intended to prioritise export-oriented industries, particularly the garment sector, which accounts for more than 80 per cent of Bangladesh’s export earnings.

Bangladesh’s economic growth eased to three per cent in the second quarter of the 2025-26 fiscal year, which ends in June, compared with 3.5 per cent a year earlier, according to provisional data from the Bangladesh Bureau of Statistics.

Businesses have been calling for stronger policy support as high borrowing costs, persistent inflation and tight financing conditions continue to weigh on investment and industrial activity.

Economists said reopening idle factories and improving access to credit could help stabilise production, protect jobs and support exports.

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المصدر: New Straits Times