With deficit budgets having become a culture in Bangladesh, met through high-interest loans from domestic and foreign banks, independent Member of Parliament for Brahmanbaria-2 Rumeen Farhana has questioned how the government will implement the proposed budget amid severe macroeconomic pressures.
Raising the issue during a speech on a cut motion regarding supplementary demands for grants in the 2025-26 supplementary budget on Monday, Farhana highlighted the deteriorating state of the economy.
“Bangladesh’s GDP size is Tk68 lakh crore. GDP growth is only 3.49 per cent. Inflation is 9.5 per cent,” she told parliament, with Speaker Hafiz Uddin Ahmed in the chair.
She noted that defaulted loans now account for 35.73 per cent of total disbursed loans, amounting to Tk6.44 lakh crore. The banking sector’s capital adequacy has fallen to negative 2.64 per cent.
Private sector credit growth has declined from 22 per cent to just 5 per cent, while the trade deficit has increased to $22.21 billion, indicating falling exports and rising imports, she added.
Citing the white paper, Farhana said $234 billion has been laundered from Bangladesh over the past 15 years —-approximately $14 to $16 billion annually. Global Financial Integrity estimates that an additional $8 billion leaves the country each year through over-invoicing and under-invoicing.
“Banks have been used as political tools over the past 15 years. Loans have been given to those with no visible business. Banks have been handed over one after another to families,” she alleged.
The MP warned that the IMF has announced it will not provide subsequent loan instalments to the new government under the existing agreement, instead calling for a new deal.
“Now we will have to look towards China or similar countries for loans. When we take loans from countries other than the ADB, World Bank, or IMF, interest rates are much higher, and there is pressure to repay them quickly,” she said.
“Amid these macroeconomic pressures, how will the finance minister implement this budget?” Rumeen Farhana questioned. She warned that unless the stock market and tax administration are improved, the entire pressure will fall on the banking sector.
