The country’s private sector credit growth stood at a historic low of 4.75% in April this year, reflecting weak business confidence, slowing investment, and mounting global economic challenges.
Private sector credit growth stood at 4.72% in March, indicating a slight increase. Central bank data shows that growth remained below 5% for two consecutive months.
Economists and bankers said that following the February national election, the overall political environment has improved comparatively. However, the global economic situation and fuel crisis have disrupted demand and supply chains. As a result, investment has remained subdued.
Mohammad Ali, Managing Director of Pubali Bank, believes there are several reasons behind the record-low private sector credit growth. He said that while there are many barriers to doing business in the country, the global fuel crisis significantly affected economic activity in March and April. The situation created concern among businesspeople and disrupted the private sector as well.
“Businessmen consider fuel costs when starting a new business or expanding an existing one. The country’s businesspeople were reluctant to expand their operations due to the fuel crisis stemming from the Middle East war,” he said.
He further said the export situation is not encouraging either. Exporters are not receiving more orders from abroad, while production costs have increased. As a result, costs are rising but even minimum profit margins are not being ensured.
Ezazul Islam, Director of BIBM, said there are many challenges to making new investments in the country, and the fuel crisis has become an additional obstacle. Currently, growth remains slow due to weak demand.
Private sector credit growth had been declining steadily in recent months, falling from 6.58% in November 2025 to 6.20% in December, and then to 6.03% in both January and February 2026, before dropping sharply in March, according to central bank sources.
Bangladesh Bank has been publishing private sector credit growth data since 2003. A review of the data shows that March recorded the second-lowest growth rate in the past 24 years.
A deputy managing director of a private bank told TBS that many businesses shut down after the fall of the Awami League government, while others are operating far below capacity.
He said several factories owned by large business groups, including Nassa Group, Beximco Group and Gazi Group, had closed, reducing demand for bank borrowing.
“When the factories were operational, they imported capital machinery. But even the firms that are still running have reduced production by 60-70%,” he said.
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