The Bangladesh Bank has projected sluggish economic growth of 4-5per cent for FY25, citing multiple challenges.

In its monetary policy statement for the second half of the fiscal year, the central bank kept the policy rate unchanged, prioritising inflation control and exchange rate stability.

With rising non-performing loans and a focus on fiscal discipline, the BB expected inflation to ease to 7-8 per cent by June 2025 but warned that economic recovery will remain difficult in the short term.

‘The primary objectives of the MPS are to contain inflation, stabilise the foreign exchange market while rebuilding the Bangladesh Bank’s foreign exchange reserves, and address the sharp rise in non-performing loans in banks and financial institutions. Given both global and domestic challenges, the BB remains committed to maintaining a tight monetary policy stance for the second half of FY25,’ said BB governor Ahsan H Mansur.

At a press conference at the central bank headquarters on Monday, BB governor Ahsan H Mansur announced the monetary policy statement (MPS) for the second half of FY25.

He saisthat with BB’s firm policy stance and close collaboration with key stakeholders, inflation is expected to decline further, making the target range of 7-8 percent achievable. Looking ahead, he projected inflation to fall to 5 percent by FY26.

According to the Bangladesh Bureau of Statistics (BBS), the country’s point-to-point inflation rate eased slightly in January, dropping to 9.94 percent from 10.89 percent in December 2024.

During a presentation, deputy governor Md Habibur Rahman said that, in light of recent inflation trends, the central bank has decided to keep the policy rate unchanged at 10.0 percent.

‘The Standing Lending Facility (SLF) rate will remain at 11.5 per cent, while the Standing Deposit Facility (SDF) rate will stay at 8.5 percent, maintaining a policy rate corridor of ±150 basis points,’ he said.

The Dhaka Chamber of Commerce and Industry expressed concern over the continuation of a contractionary monetary policy in the second half of FY25, stating that keeping the policy rate at 10 per cent would restrict the private sector credit growth and hamper economic expansion.

The DCCI also criticised the decision to cap private sector credit growth at 9.8 per cent for January-June FY25, while the actual growth had already fallen to 7.3 per cent in early 2025 — the lowest in 12 years.

The chamber observed that restoring business confidence required pushing up credit growth to the double digit level.

The trade body also faulted the Bangladesh Bank on inadequate steps in strengthening banking governance amid liquidity shortages and rising NPLs.

It urged the central bank to adopt a more flexible monetary policy, closely monitor its impacts on inflation and growth, and introduce targeted measures to boost credit flow.