Private sector credit growth drops to 11.07pc in September
Credit growth in the private sector declined further in September as the country’s investment zone is now passing a stagnant situation due to the ongoing political unrest ahead of the national elections, said Bangladesh Bank officials. According to the latest BB data, private sector credit growth stood at 11.07 per cent in September this year compared with that of 19.88 per cent in the corresponding month of last year.
The credit flow to the private sector stood at Tk 4,66,549.20 crore in September 2013 while it was Tk 4,20,037.40 crore in the same month of 2012. The figure was Tk 3,50,375.40 crore in September 2011.
In July this year, the private sector credit growth increased slightly after falling for straight 12 months as the businessmen imported a significant amount of essential commodities in the month eyeing on political situation in the run up to the next general elections, the BB officials said.
The year-on-year credit growth in the private sector was 11.61 per cent in July.
The BB data, however, showed that credit growth in the private sector had declined consecutively in August and September.
The year-on-year credit growth in the private sector stood at 11.33 per cent in August.
Dhaka University economics department chairman MA Taslim told New Age on Wednesday that it was a common phenomenon that credit growth in the private sector had declined in September.
He explained that the private investment had collapsed in the last two years due to the government policies and the political unrest.
‘The government invested large amount of money in the public sector in the period, of which significant portion of money went in wrong way due to absent of transparent process’, Taslim said.
The public investment did not bring positive impact much on the overall macro-economic situation, he said.
All kinds of economic activities of the country have come to a standstill due to the recent spates of political violence which discouraged the businesspeople to make fresh investment in the recent months, he said.
It is quite impossible to create a tempo in the investment sector if the existing political unrest does not stop immediately, Taslim said.
The businesspeople think that the political uncertainty will deepen in the months to follow as the country’s two major political alliances are yet to reach any solution over the next polls-time government, he said.
Taslim said that the overall macro-economic indicators would not be better in the current financial year as any country’s economy would not be able to get tempo instantly after a crisis.
Amid political unrest, the private sector credit growth hit a 13-year low at 10.85 per cent in the last FY13.
Former president of the Federation of Bangladesh Chambers of Commerce and Industry AK Azad told New Age that the private sector had been facing an infrastructural crisis for a long which was hampering its growth.
The recent political unrest has deepened the crisis in the private sector resulting that the import of industrial raw materials and real capital machinery decreased in the last few months, he said.
He said that credit growth in the private sector would decline more in the months to come if the political uncertainty continued.
The BB data showed that the credit growth in the overall domestic sector slumped to 10.77 per cent in September this year compared with that of 17.79 per cent in the corresponding month of 2012.
The total credit in the domestic sector in September stood at Tk 5,87,048.40 crore against Tk 5,29,960.70 crore in the same month of 2012.
-With New Age input
