Bangladesh Bank announced a 600 billion taka ($4.9 billion) stimulus package aimed at reviving shuttered factories, supporting struggling businesses, and boosting employment as the country’s economic growth continues to slow, according to Reuters.
The package was unveiled by Bangladesh Bank Governor Mostaqur Rahman, who said the initiative is designed to restart production, restore business confidence, and stabilize key export industries that have been impacted by weaker global demand, rising input costs, supply chain disruptions, and increasing import bills tied to geopolitical tensions in the Middle East.
According to the central bank, the stimulus package includes a 410 billion taka refinancing fund sourced from commercial banks with excess liquidity, with long-term deposits paying 10% interest. Another 190 billion taka will come directly from the central bank’s own resources and will be backed by a government guarantee.
The largest portion of the package, totaling 200 billion taka, will be directed toward reopening closed and distressed factories and supporting businesses in the service sector. Bangladesh Bank estimates the program could create approximately 250,000 jobs. Another 100 billion taka has been earmarked for agriculture and rural economic development to support food production and rural employment.
Officials said the refinancing scheme will prioritize export-oriented sectors, particularly the ready-made garment industry, which accounts for more than 80% of Bangladesh’s export earnings. The country’s manufacturing and export sectors have been under pressure from slowing international demand, higher operating costs, and tighter financing conditions.
Bangladesh’s economic growth slowed to 3% in the second quarter of fiscal year 2025-26, down from 3.5% during the same period a year earlier, according to provisional government data. Businesses and economists have increasingly called for stronger policy support as high borrowing costs, inflation, and reduced investment activity weigh on industrial production and broader economic momentum.
Additional targeted funding initiatives under the broader package include support for cottage industries, startups, green financing projects, leather and footwear exporters, frozen seafood exports, and overseas employment initiatives. Central bank officials said the broader objective is to revive industrial activity, diversify exports, expand agricultural production, and improve medium-term GDP growth prospects.
