Why a banking crisis is brewing in Bangladesh

Behind the positive headlines and impressive growth, crony capitalism is pushing non-performing loans towards unsustainable levels.
Sheik Hasina
Sheik Hasina

It is recording the highest growth rate in Asia, but Bangladesh’s boom is fuelling the same kind of banking bust that precipitated the Asian Financial Crisis say fund managers and local analysts.

On the surface, Bangladesh is doing well. The International Monetary Fund IMF forecasts that it will hit a growth rate of 7% in 2018 and again in 2019, higher than any other Asian nation including Vietnam.

Such a pleasing headline number prompted HSBC to describe the country as “Asia’s best growth” story in a wide-ranging research report published in April. It concluded that Bangladesh “isn’t getting the attention that it deserves.

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