Bangladesh’s Central Bank has unveiled an around US $5 billion (600 billion Taka) economic stimulus package to support struggling businesses, particularly the garment export industry which accounts for 80% of the country’s overall exports.
The package is also expected to reopen factories and boost the economy amid a sharp slowdown in the country’s economic growth.
“The stimulus package will create jobs and restore confidence among businesses as many export-oriented industries, especially the garment industry have been impacted,” Reuters reported.
The refinancing program will prioritize export-oriented industries, especially the ready-made garment industry.
Additionally, import prices have risen sharply due to geopolitical tensions which are also putting further pressure on country’s export economy.
Bangladesh Bank Governor Mostaqur Rahman said the stimulus package includes a refinancing fund of 410 billion taka, raised from banks with excess liquidity through long-term deposits of at least three years at an interest rate of 10%.
The remaining amount, about 190 billion taka, will be drawn from the central bank’s reserves and guaranteed by the Bangladesh government.
Of the total budget, the largest allocation, around 200 billion taka, will be dedicated to supporting the reopening of factories that have stopped operations or are facing financial difficulties.
Bangladesh Bank estimates that the program could create about 250,000 new jobs. In addition, around 100 billion taka will be allocated to agricultural and rural economic activities to support food production.
Bangladeshi businesses have repeatedly demanded stronger support policies as high borrowing costs, persistent inflation, and tight credit conditions are putting significant pressure.
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