Interest rates may need to increase further to bring inflation down to the 5% range, said the Chief Adviser’s Special Assistant for Finance Anisuzzaman Chowdhury, warning that Bangladesh’s large informal sector leaves limited alternatives for containing price pressures.
He made this comment at the launch of the Bangladesh State of the Economy 2025 and the SDG Progress Report 2025 at the NEC Conference Room in Sher-e-Bangla Nagar, according to the organisers.
The event was arranged by the General Economics Division of the Planning Commission.
“Inflation has eased, thanks to the central bank. But given the size of our informal sector, interest rates need to rise further if we really want to bring inflation down to 5 %,” he said.
Bangladesh Bank Governor Ahsan H Mansur earlier argued that interest rates should not be reduced until inflation falls further. Endorsing that position, Anisuzzaman said businesses would require support through other policy tools if borrowing costs remain high.
He pointed to gains in Chattogram port efficiency through digitalisation and container scanning systems, saying partnerships with foreign companies were part of an effort to reduce business costs.
“Policy debates will continue, but these must be fact-based and transparent. We need honest discussions to build consensus,” he said.
CPD distinguished fellow Mustafizur Rahman warned that Bangladesh risks sliding into a serious debt trap if revenue mobilisation does not improve through reforms and fiscal discipline.
NBR Chairman Md Abdur Rahman Khan was more blunt, saying, “We are already in a debt trap. Unless we acknowledge this reality, we cannot move forward.” He said the tax-GDP ratio, once above 10 %, has fallen to about 7% because tax collection has not kept pace with GDP growth across sectors.
He said the NBR will soon operate in two divisions under two secretaries as part of an administrative restructuring.
The Bangladesh Bank governor told the seminar that the merger process for five troubled banks is progressing rapidly. He said the deposit guarantee has been raised from Tk1 lakh to Tk2 lakh and that payments to depositors may begin within one to two weeks.
He said the initiative will benefit about 76 lakh families who have deposits in the troubled banks and expressed hope that the merged entity could return to profitability within one or two years.
