Staff Reporter :
The private sector credit growth continues to rise in view of stability in the country’s political arena, falling bank interest rates and high liquidity in banks, sources said.
They said that the ongoing political stability helped creating credit appetite among the investors, resulting further increase in private sector credit growth rate.
According to the Bangladesh Bank (BB), the credit flow to the private sector stood at Tk 5,61,863 as of May 2015 against Tk 4,94,720 crore as of May 2014, showing a 13.57 per cent year-on-year growth.
In absolute term, private sector credit advanced by
Tk 67,143 crore in January-May this year compared with the corresponding period of previous year.
The private sector credit growth rate was 13.27 per cent in April this year. It was 13.63 per cent in March, 13.61 per cent in February and 13.33 per cent in January this year.
Officials said, although the rate continues to rise, it still remained below the target of 15.50 per cent to be achieved by June as per the BB’s Monetary Policy target.
“Private sector credit growth was kept on accelerating in the wake of growing investment prospect resulted from the country’s political stability,” Dr Biru Paksha Paul, Chief Economist of BB told The New Nation (NN) on Tuesday.
A declining trend in borrowing cost also contributed to the private sector credit growth.
“The rise in private sector credit growth indicates that the investment situation is improving. We expect that the rising trend of private sector credit growth will continue in the months to come, if the political stability prevails,” he said.
When asked, the BB’s chief economists said that the national economy remained on right track despite various internal and external challenges. “The economy is showing signs of recovery with major economic indicators in positive territory,” he noted.
“Private sector credit growth rate has increased due to the rising demands for working capital loans for importing goods, capital machinery and stock building of products ahead of Eid,” Dr Zahid Hossain, Lead Economist World Bank’s (WB) Bangladesh country office told The NN.
He also said although there is a rise in such credit growth, it is still far below the central bank’s monetary policy target. “Achieving the target would be difficult unless the enabling business and investment climate are restored here,” he commented.
Political stability is not the only pre-condition that help accelerating private sector investment. Easing infrastructure bottleneck and availability of bank credit are two other key pre-requisite, that help accelerating the private sector investment.
“We are yet to develop necessary infrastructure to woo big investment. So, the overall investment scenario is still maintaining a sluggish hurting the national economy,” he noted.
The private sector credit growth continues to rise in view of stability in the country’s political arena, falling bank interest rates and high liquidity in banks, sources said.
They said that the ongoing political stability helped creating credit appetite among the investors, resulting further increase in private sector credit growth rate.
According to the Bangladesh Bank (BB), the credit flow to the private sector stood at Tk 5,61,863 as of May 2015 against Tk 4,94,720 crore as of May 2014, showing a 13.57 per cent year-on-year growth.
In absolute term, private sector credit advanced by
Tk 67,143 crore in January-May this year compared with the corresponding period of previous year.
The private sector credit growth rate was 13.27 per cent in April this year. It was 13.63 per cent in March, 13.61 per cent in February and 13.33 per cent in January this year.
Officials said, although the rate continues to rise, it still remained below the target of 15.50 per cent to be achieved by June as per the BB’s Monetary Policy target.
“Private sector credit growth was kept on accelerating in the wake of growing investment prospect resulted from the country’s political stability,” Dr Biru Paksha Paul, Chief Economist of BB told The New Nation (NN) on Tuesday.
A declining trend in borrowing cost also contributed to the private sector credit growth.
“The rise in private sector credit growth indicates that the investment situation is improving. We expect that the rising trend of private sector credit growth will continue in the months to come, if the political stability prevails,” he said.
When asked, the BB’s chief economists said that the national economy remained on right track despite various internal and external challenges. “The economy is showing signs of recovery with major economic indicators in positive territory,” he noted.
“Private sector credit growth rate has increased due to the rising demands for working capital loans for importing goods, capital machinery and stock building of products ahead of Eid,” Dr Zahid Hossain, Lead Economist World Bank’s (WB) Bangladesh country office told The NN.
He also said although there is a rise in such credit growth, it is still far below the central bank’s monetary policy target. “Achieving the target would be difficult unless the enabling business and investment climate are restored here,” he commented.
Political stability is not the only pre-condition that help accelerating private sector investment. Easing infrastructure bottleneck and availability of bank credit are two other key pre-requisite, that help accelerating the private sector investment.
“We are yet to develop necessary infrastructure to woo big investment. So, the overall investment scenario is still maintaining a sluggish hurting the national economy,” he noted.
