BRAC University hosts discussion on economic resilience

BRAC University recently hosted a panel discussion titled "Economic Resilience of Bangladesh: Role of Fiscal Policy" at its Merul Badda campus in Dhaka.

The event was organised by the university's Department of Economics and Social Sciences (ESS) to examine the evolving fiscal challenges and opportunities in Bangladesh.

The session brought together leading experts, including Professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD); Mohammad Nurul Amin, Chairman of Global Islami Bank PLC; and Tahera Ahsan, Executive Director of the Japan-Bangladesh Chamber of Commerce and Industry.

In his remarks, Professor Mustafizur Rahman highlighted the mismatch between Bangladesh's fiscal capacity and poverty reduction goals. "Despite inflation eroding purchasing power—totalling 30 per cent over the past three years—public expenditure remains low at just 13% of GDP, well below the South Asian average of 20%," he said.

He pointed out that although the latest national budget consolidated 140 social safety net programmes into 99, nearly 45% of the allocation still goes to areas like agriculture subsidies and pensions, which he argued should be excluded from the safety net umbrella. "We need to shift from a social safety net approach to a comprehensive social security framework," he said.

Mohammad Nurul Amin highlighted the growing stress in the banking sector, noting that around Tk 7 lakh crore—or 40% of total loans—are now classified as non-performing, against total deposits of Tk 19 lakh crore. "Weak banks will either be merged or absorbed through acquisition," he added.

Tahera Ahsan discussed the impact of government borrowing on the private sector. "When the government raises funds through financial instruments like bonds, it tightens credit availability for businesses," she said. While acknowledging that the budget lacks clear stimulus for private sector expansion, she said the current focus is "not on growth but on restoring macroeconomic balance."

The discussion highlighted the pressing need for inclusive fiscal policies to foster resilience and long-term stability as Bangladesh prepares for its graduation from the LDC status and navigates global economic headwinds.