Excessive debt can worsen economic state: Mansur

 

Former Bangladesh Bank Governor and noted economist Dr Ahsan H Mansur has urged the government to maintain fiscal discipline and accelerate banking sector reforms, warning that economic stability could be at risk if spending and governance challenges are not addressed prudently.

Reacting to the proposed FY2026-27 budget, on Thursday Mansur said the government's development ambitions must be balanced with macroeconomic realities. While acknowledging the new administration's desire to undertake major initiatives, he stressed that public spending should be implemented gradually and in line with prevailing economic conditions.

The government must ensure that its programmes do not undermine macroeconomic stability, he said, cautioning that excessive borrowing and undisciplined expenditure could worsen economic conditions and increase fiscal pressures.

Beyond budgetary concerns, Mansur identified banking sector reforms as a critical priority for sustaining investment and restoring confidence in the economy. He called on the government to carry forward reforms initiated during the interim administration, including amendments to the Bank Companies Act aimed at reducing excessive family control over banks.

He also reiterated the need to strengthen the independence of Bangladesh Bank, arguing that greater autonomy is essential to limiting external interference and ensuring sound governance in the financial sector.