Credit growth in the country’s private sector achieved only 4.41 per cent in July-November of 2013 against a six-month target of 15.50 per cent as the businesspeople were reluctant to expand their business by taking finance from banks due to political unrest. According to the latest BB data released on Tuesday, private sector credit growth declined to 11.13 per cent in November 2013 compared with that of 17.41 per cent in the corresponding month of 2012.
Under the monetary programme for the FY14, the central bank had set 15.5 per cent credit growth target for the private sector by December 2013 and 16.50 per cent by June 2014.
A BB official said told New Age on Tuesday that the central bank’s monetary programme for July-December had virtually plunged in an ineffective situation as the achievement rate of the private sector credit growth was now far away from its expected level.
He feared that the credit growth in the private sector would not increase by 50 per cent of the projection target of 15.5 per cent for July-December.
The BB data showed that the credit flow to the private sector had increased by 4.41 per cent to Tk 4,72,086.20 crore in November from Tk 4,52,157.20 crore in June 2013. The credit flow to the private sector stood at Tk 4,24,817.70 crore in November 2012.
Amid political unrest, the private sector credit growth hit a 13-year low at 10.85 per cent in the last FY13.
The country has been facing a violent political turmoil for the last several months as the two major political alliances are yet to reach a consensus over the process of holding general elections which has ultimately hit the private sector, the BB official said.
Under the circumstances, the projected credit growth in the private sector set by the BB will not be achieved at the end of December, as the achievement rate in July-November is miles away from the expected target, he said.
All kinds of economic activities in the country have come to a standstill due to political unrest which discouraged the business people to make fresh investment, he said.
Against the backdrop, a number business groups have started terminating their workers as they have made a decision to squeeze their business, he said.
There is no much possibility to improve the existing business situation in the second half of the FY14 as the government accomplished one-sided general polls on January 5 which will prolong the suffering for the private sector, he said.
The BB data showed that the credit growth in the domestic sector had achieved only 4.46 per cent in July-November against the six-month target of 19.30 per cent.
The credit growth in the domestic sector slumped to 10.78 per cent in November 2013 compared with that of 14.83 per cent in the corresponding month of 2012.
The BB data showed that the credit flow to the domestic sector had increased by 4.46 per cent to Tk 5,97,246.20 crore in November from Tk 5,71,737.10 crore in June 2013. The credit flow to the domestic sector stood at Tk 5,39,143.30 crore in November 2012.
Another BB official said the government had significantly declined its borrowing from the banking sector in the first five months of the FY14 due to a slower pace in implementation of annual development programme.
For this reason, the domestic credit growth declined along with the private sector, he said.
-With New Age input
