The country’s private sector credit growth plummeted to an all-time low of 6.03% in January, as prolonged political instability and A high-interest-rate regime forced businesses to stall expansion plans and led banks to adopt A highly cautious lending stance.
According to the latest data from the Bangladesh Bank, credit growth edged down from 6.1% in December, continuing A sharp decline from the 10.13% recorded in July 2024.
Although A brief spike to 6.58% occurred in November, analysts attribute this to loan restructuring ahead of the 12 February national election rather than genuine new investment in productive sectors.
In its monetary policy statement for January-June 2026, the central bank attributed the slowdown to tight monetary conditions, rising government borrowing to finance the budget deficit and subdued demand for loans amid continued uncertainty surrounding new investment decisions.
The decline has been steady over recent months, with growth recorded at 6.29% in September, 6.35% in August, 6.52% in July, 6.40% in June, 7.17% in May and 7.5% in April. In contrast, private sector credit growth stood at 10.13% in July 2024 before falling sharply following the political transition in August that year.
Economists say prolonged political uncertainty, weak business confidence and structural weaknesses in banks have discouraged investment, prompting many businesses to postpone expansion plans despite the BNP securing A landslide victory in the February election.
