Finance Minister Amir Khasru Mahmud Chowdhury has presented an ambitious budget to achieve 6.5 percent growth by spending 938,000 crore taka. He also said that from now on, the country’s economy will be investment-based. Because the government’s long-term goal is to make the economy a trillion dollars by 2034, which is exactly half of what it is now.
However, none of its goals will be achieved if the country’s banking sector is in deep crisis and fragile. Because, Bangladesh’s economy is completely dependent on the banking sector. The banking sector’s assets account for 50 percent of the country’s total GDP. 85 percent of these assets are loans and investments. Even the government depends on the banking sector. This time, 46 percent of the budget deficit that the Finance Minister has announced will come from the banking sector.
The Finance Minister himself has highlighted the pathetic picture of the country’s banking sector in the budget. For example: defaulted loans in the banking sector are 6 lakh 44 thousand crore taka or 35.73 percent. The capital adequacy ratio has come down to negative 2.64 percent. The growth of credit in the private sector has also decreased by 6.5 percent. However, at the time of budget presentation, this rate had further decreased to 4.75 percent, which is the lowest in the country’s history. And now private debt to total GDP is only 21.53 percent, which is the lowest in the last decade.
Meanwhile, there has been renewed instability in the banking sector, centered on Islamic banks. In this situation, if the banking sector is not fixed now, the economy will not be able to recover in the first year and make a comeback in the next three years, as the Finance Minister has said.
