Bangladesh central bank unveils $4.9 billion in stimulus as growth slows

DHAKA, May 23 (Reuters) - Bangladesh's central bank on Saturday announced a 600 billion taka ($5 billion) stimulus package to revive shuttered factories and support businesses as economic growth slows.

The package aims to restart production, create jobs and restore business confidence, as export-oriented industries, especially the ready-made garment sector, struggle with weaker global demand, higher input costs and supply chain disruptions, while rising import bills add to pressure on the economy amid geopolitical tensions in the Middle East.

Bangladesh Bank Governor Mostaqur Rahman said the stimulus includes a 410 billion taka refinancing fund raised from banks with excess liquidity through long-term deposits of at least three years at a 10% interest rate, alongside a 190 billion taka fund drawn from the central bank's own resources and backed by a government guarantee.

The largest allocation, amounting to 200 billion taka, will be used to reopen closed and distressed factories and support service-sector businesses. The central bank estimates the programme could help create around 250,000 jobs.

Another 100 billion taka has been earmarked for agriculture and the rural economy, to support food production and rural employment, officials said.

The refinancing scheme is intended to prioritise export-oriented industries, particularly garments, which account for more than 80% of Bangladesh's export earnings.

Bangladesh's economic growth eased to 3% in the second quarter of the 2025-26 fiscal year, which ends in June, compared to 3.5% a year earlier, according to provisional data from the Bangladesh Bureau of Statistics.

Businesses have been calling for stronger policy support as high borrowing costs, persistent inflation and tight financing conditions weigh on investment and industrial activity.

Economists say reopening idle factories and improving access to credit could help stabilise production, protect jobs and support exports. ($1 = 122.25 taka) (Reporting by Ruma Paul; Editing by Kevin Liffey)