ZAHID HUSSAIN

The newly announced Tk 60,000 crore stimulus package by the Bangladesh Bank comes with ambitious goals: reviving closed industries, supporting Cottage, Micro, Small and Medium Enterprises (CMSMEs), expanding agriculture and rural activity, diversifying exports, and creating more than 2.5 million jobs. The presentation accompanying the package portrays a broad-based recovery effort at a time of slowing growth, weak investment sentiment and growing pressure on the private sector.

The intent is understandable. With growth slowing, industrial activity weakening and financial stress rising, pressure for policy intervention is increasing.

But good intentions do not automatically produce good outcomes. The more important question is whether the package addresses the binding constraints of the economy or whether it risks adding pressure to an already fragile macroeconomic environment.

The package is framed as a countercyclical intervention. That logic works best when an economy is suffering from weak demand, low inflation, and temporarily idle productive capacity. Bangladesh today faces a more difficult combination: growth is slowing while inflation remains elevated and persistent.

In such conditions, additional stimulus does not automatically translate into higher output. If supply cannot respond, it may raise prices faster than production.

That concern matters because The