The Dhaka Chamber of Commerce & Industry (DCCI) has expressed deep concern over the continuation of Bangladesh Bank’s contractionary monetary policy, which it says is significantly undermining private sector growth, investment, and industrial activities.
Private sector credit growth has plummeted to just 6.4% in June 2025 — the lowest in 22 years — highlighting a worrying slowdown in business momentum. DCCI attributes this downturn not only to the tightened monetary stance but also to a broader climate of business uncertainty, unstable law and order, and inadequate energy supply.
In a statement, DCCI pointed out that despite weakening business confidence, the central bank has kept the policy rate unchanged at a high 10%, in its attempt to tame inflation, which has shown only marginal improvement. This high borrowing cost continues to place a heavy burden on Cottage, Micro, Small and Medium Enterprises (CMSMEs) and other productive sectors.
The new monetary policy has further trimmed the private sector credit growth target to 7.2% for the next six months, down from 9.8% in the previous policy cycle. In contrast, the public sector credit growth target has been raised to 20.4%, raising fears of a growing fiscal burden on the economy and taxpayers, while crowding out private investment.
DCCI also flagged the alarming rise in non-performing loans (NPLs), which have ballooned to Tk 5.3 lakh crore — now accounting for 27.09% of total outstanding loans. This, the Chamber warned, poses a grave threat to financial stability and erodes investor confidence.
To mitigate these risks and support economic recovery, DCCI called on Bangladesh Bank to increase credit flow to the private sector through simplified procedures and reduced interest rates. It also urged a six-month extension in the loan classification period for good borrowers, to help businesses recover without facing premature default.
Furthermore, the Chamber emphasised the need for urgent structural reforms in the financial sector, greater transparency in credit allocation, and strict monitoring to maintain liquidity.
DCCI concluded that a more flexible, inclusive, and sector-responsive monetary policy — aligned with fiscal discipline — is vital to restore business confidence, attract investment, and ensure long-term macroeconomic stability.