The effectiveness of Bangladesh Bank’s latest monetary policy will depend less on policy announcements and more on how its measures are implemented, according to Business Initiative Leading Development (BUILD) Chairman Abul Kasem Khan.
He said the central bank’s objective of reviving economic activity while keeping inflation under control is appropriate, and the Tk 60 billion refinancing package could support employment and productive sectors if executed properly.
“Allocating funds alone will not create jobs or boost production,” Mr Khan said, stressing that the incentive package must be distributed transparently and closely monitored to ensure the money is invested in factory expansion, machinery, production capacity and new industrial ventures.
Without proper oversight, the funds could be misused, increasing the risk of non-performing loans, he cautioned.
Mr Khan said maintaining a relatively tight monetary policy is justified until inflation is brought under control, warning that a premature reduction in lending rates could trigger renewed price pressures.
At the same time, he noted that policymakers face the challenge of supporting economic growth and employment without compromising price stability.
Mr Abul Kasem also welcomed the tax incentives announced in the national budget, saying they would improve business liquidity and reduce reliance on bank borrowing if businesses reinvest the savings in productive activities.
However, he argued that access to finance alone would not be sufficient to revive the industrial sector.
“Many factories remain closed not only because of financial constraints but also due to shortages of gas and electricity and other structural bottlenecks,” he said.
BUILD chief urged the government to ensure uninterrupted energy supply, improve infrastructure, speed up regulatory approvals and enhance the ease of doing business so that monetary and fiscal measures translate into higher investment and industrial output.
Mr Khan also called for careful screening of businesses seeking support under the refinancing package to ensure that only viable enterprises with realistic prospects of resuming production receive assistance.
“The government’s objectives of boosting employment, industrialisation and economic growth are positive. Their success, however, will ultimately depend on transparent implementation and an improved business environment,” he added.
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