Economic Concerns Arise from Decline in Private Sector Borrowing

Summary:
The decline in corporate borrowing from overseas lenders by private sector enterprises in Bangladesh has raised concerns among economists about potential negative impacts on economic activity. As of May, short-term foreign debt stood at $11.04 billion, down from $13.95 billion a year earlier. Entrepreneurs have postponed business expansions due to domestic and global market uncertainties. Factors contributing to the downtrend include an energy crisis in industrial areas, currency depreciation, and repayment risks amid a forex shortage. The reduced capital inflow may disrupt industrial production and job creation. However, some central bank officials see the declining debt as beneficial for easing pressure on foreign-exchange reserves. Challenges such as gas and power outages and low confidence among global lenders are also affecting the borrowing trend.