Strict monetary policy has left around 1.2 million people jobless: AK Azad

Ha-Meem Group Managing Director AK Azad has said that tightening monetary policy has already left around 1.2 million people unemployed and warned that another 1.2 million could lose their jobs in the next six months.

He made the remarks today (27 January) while speaking at a roundtable discussion organised by the International Chamber of Commerce Bangladesh (ICC).

AK Azad said managing the economy solely through monetary policy is not feasible without boosting investment and employment. “Without increasing investment and employment, it is not possible to manage the economy only through monetary policy,” he said.

Bangladesh Bank Governor Ahsan H Mansur, ICC Bangladesh President Mahbubur Rahman, along with business leaders and bankers, attended the roundtable titled “Implications of LDC Graduation for the Banking Industry: Bangladesh Perspective.”

Referring to a research paper by Ahsan Habib, AK Azad said exports to the European Union could decline by as much as 45% once Bangladesh graduates from least developed country (LDC) status.

He also said that due to a slowdown in the ready-made garment sector, non-performing loans (NPLs) in the banking sector have risen to around 30%, which could further weaken exports and create a liquidity crisis through systemic pressure.

“Currently, the default loan rate in state-owned banks stands at about 50%, while in private banks it averages around 30%,” he added.

AK Azad further said the private sector has so far taken only 6% of bank loans, while government borrowing accounts for 27%, a figure he warned could rise to 32% in the future.

He added that although efforts were made to make the current government aware of the potential impact of LDC graduation, the concerns were not accepted. “Once a new government is formed, these issues must be placed before it,” he said.