Pvt credit growth is getting closer to the goal
Shining BD Desk || Shining BD
Credit growth in the private sector is nearly in line with monetary policy targets, which is a positive sign for an economy under tremendous pressure as a result of the ongoing Russia-Ukraine conflict.
According to Bangladesh Bank data, private entrepreneurs took 13.97 percent more loans from the banking sector in November 2022 than they did in November 2021.
In November, credit growth increased after falling in the previous two months. Increasing private investments are seen as a boon for the economy.
In the monetary policy for the 2022-23 fiscal year, the central bank lowered the private sector credit growth target to 14.10 percent from 14.80 percent in the previous policy in a bid to cut money flow in the market to control high inflation.
Credit growth in July was 13.95 percent, rising to 14.07 percent in August, falling to 13.93 percent in September, and falling further to 13.91 percent in October. Total private sector loans stood at Tk 1,4067.14 billion in November this fiscal, which was Tk 1,3891.48 billion in October, according to the latest BB data.
"Private sector credit was rising for the last few months. 14 percent growth is quite impressive during a tough period for the country," said economist Ahsan H Mansur.
Private credit has increased as a result of the government's stimulus package announced to help recover from the Corona crisis, he observed.
After the Corona pandemic, the country also developed a favorable investment climate. The investors also planned for new investments surrounding the Padma Bridge, metrorail, Karnaphuli tunnel and economic zones, which banks quickly responded to.
“As a whole, private sector credit has seen a momentum. A recent increase in the value of the US dollar has made it more expensive for importers to open LCs, resulting in a rise in debt," he added.
As a result of the Corona pandemic, private credit growth hit its lowest point at 7.55 percent in May 2021, the lowest in the country's history.
Growth in private credit reached 24 percent during the growing economy at the end of 2009-10, which had previously reached 25 percent.
Source: Daily Sun
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