Weakness in the financial sector and labour unrest might be the major sources of risk for the interim government in the short term, said a finance ministry report yesterday on Bangladesh's recent economic challenges and the way forward.

In view of this, the government should give the highest priority to bringing back discipline in the financial sector and mitigating labour unrest before it flares up, said the paper, presented by Finance Secretary Md Khairuzzaman Mozumder to Chief Adviser (CA) Muhammad Yunus.

Finance Adviser Salehuddin Ahmed, Bangladesh Bank Governor Ahsan H Mansur, and other senior finance ministry officials were present, according to the press wing of the CA.

The paper said factories near the Beximco Group's industrial enclaves are prone to the risk of labour unrest

The paper said factories near the Beximco Group's industrial enclaves are prone to the risk of labour unrest because of the layoff of 40,000 workers across the textile and garment units of Beximco.

Incidents of labour unrest have been taking place in factories whose owners are absconding on allegations of either corruption or money laundering.

The paper said a section of vested groups instigates the workers and students. This often deteriorates law and order and creates public suffering in industrial zones, it added.

The financial sector is also at risk because of the massive buildup of default loans.

Some 10 banks are at high risk due to mismanagement by the previous government, said the finance ministry paper, adding that authorities have appointed international firms to review the asset quality of banks.

At a press briefing after the meeting, Shafiqul Alam, press secretary to the CA, said the chief adviser asked the BB governor to ensure the autonomy of the central bank as soon as possible.

The BB has stopped all kinds of fresh recruitment until now, he added.

Alam said the government has been trying not to take on any unnecessary and less important projects anymore.

Citing the finance ministry paper, he said that major economic indicators are showing positive signs.

For instance, exports grew by 10 percent year-on-year, imports were increasing, jobs were being created, and inflation had come down to single digits.

Inflation decreased because of the hike in the interest rate, and it is expected that inflation will come down to 7.5 percent by July of this year, said Alam.

Furthermore, the government has taken some measures, such as a contractionary monetary policy and a conducive revenue policy, to arrest high inflationary pressure, he added.