The newly announced budget’s increased reliance on bank borrowing could put pressure on credit flow to the private sector, raising concerns over investment momentum, the Centre for Policy Dialogue (CPD) has warned.
Speaking to journalists in front of the General MAG Osmani Gate of the National Parliament complex on Thursday after the budget announcement, CPD Research Director Khandaker Golam Moazzem said the trend may create a major challenge for private sector access to credit.
He said if government borrowing from the banking sector rises, the availability of funds for private businesses could decline, potentially squeezing investment flows in the economy.
To address the situation, Moazzem suggested that the government expand financing opportunities for the private sector from both domestic and international sources and ensure alternative funding channels.
He welcomed the initiative to expand the tax net to boost revenue collection, saying it could be a significant achievement for the National Board of Revenue (NBR) if implemented effectively.
He, however, cautioned that the budget’s size and financing structure raise some concerns. Achieving the ambitious revenue targets would be challenging, he said, adding that if expected foreign financing falls short, the government may have to rely more heavily on domestic bank borrowing—further tightening credit availability for the private sector.