Economic Resilience of Bangladesh: Experts Discuss Role of Fiscal Policy at Brac University Panel
Dhaka, Bangladesh — July 15, 2025
Brac University recently hosted a high-level panel discussion titled “Economic Resilience of Bangladesh: Role of Fiscal Policy”, focusing on the country’s fiscal challenges, public expenditure, and the path to sustainable economic growth. The event, held at the university’s Merul Badda campus, was organized by the Department of Economics and Social Sciences (ESS).
Key Highlights from the Fiscal Policy Panel
The session featured leading voices in Bangladesh’s economic landscape:
- Professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD)
- Mohammad Nurul Amin, Chairman of Global Islami Bank PLC
- Tahera Ahsan, Executive Director, Japan-Bangladesh Chamber of Commerce and Industry
Public Spending and Inflation
Professor Mustafizur Rahman emphasized the disconnect between fiscal capacity and poverty reduction.
“Inflation has slashed purchasing power by 30% in just three years, yet Bangladesh’s public expenditure remains at 13% of GDP—well below the South Asian average of 20%,” he noted.
He also highlighted the inefficiencies in social safety net programs, pointing out that 45% of the allocation goes to areas like agriculture subsidies and pensions.
“Bangladesh must evolve from fragmented safety nets to a comprehensive social security system,” Rahman urged.
Banking Sector Risks
Mohammad Nurul Amin addressed the rising crisis in the banking and financial sector.
“Non-performing loans (NPLs) have reached Tk 7 lakh crore—about 40% of total loans—against Tk 19 lakh crore in total deposits,” he said.
He predicted that struggling banks may face mergers or acquisitions as part of systemic reform.
Private Sector and Government Borrowing
Tahera Ahsan discussed the impact of government borrowing on the private sector’s access to credit.
“When the government raises funds through instruments like bonds, it tightens liquidity for businesses,” she said.
She added that the 2025–26 budget offers limited incentives for private sector growth.
“The current priority is not expansion but macroeconomic stabilization,” she explained.
Bangladesh’s Path Forward: LDC Graduation and Fiscal Strategy
As Bangladesh prepares for LDC graduation, the panel stressed the importance of inclusive, transparent, and fiscally responsible policies to boost resilience and navigate global economic uncertainties.