On paper, Tk 126,272 crore, the amount earmarked for social safety net programmes, looks to be a hefty sum. But the sum flatters to deceive: as much as 60 percent would be going towards those not in dire need.
Finance Minister AHM Mustafa Kamal yesterday said that though he is worried about the elevated level of consumer prices, the situation is still under the government’s control.
The proposed budget for 2023-24 is unrealistic and unattainable as the challenges that caused the economic growth to decelerate, foreign exchange reserves to dip and inflation to surge in the past one year still persist, said economists and think-tanks.
Though higher default loans and declining foreign currency reserves have been identified as the biggest risks to the economy of Bangladesh in recent times, Finance Minister AHM Mustafa Kamal yesterday fell short of coming up with any definitive measure to address the twin issues save offering some words of hope.
The government’s foreign debt servicing burden may rise by as much as 45 percent in the next fiscal year due to the devaluation of taka and higher utilisation of foreign loans in recent years.
In June last year when Finance Minister AHM Mustafa Kamal placed the budget in parliament, inflation had already been creeping up and the foreign currency reserves were on the decline. These two had derailed the full economic recovery from a two-year crisis wrought by the Covid pandemic.
The health ministry continues to struggle with utilisation of funds allocated in the national budget, like it did in the past few years.
The allocation for subsidies in agriculture, food, and power will be raised considerably in the next budget, with an aim to ease inflationary pressure on people.
Sustaining the development that has taken place in Bangladesh in the past 14 years and curbing inequality are key major challenges facing the economy owing to the fallout of the coronavirus pandemic and the Russia-Ukraine war, said Planning Minister MA Mannan.
The government is going to unveil a Tk 7,61,785 crore budget for the next fiscal year on Thursday, setting containment of high inflation as a major target.
The government’s target for borrowing from the banking system in the next fiscal year is set to surpass the Tk 1 lakh crore mark for the second consecutive year amid the twin difficulties of raging inflation and shrinking foreign reserves.
Even though poor people are struggling to make ends meet amid runaway inflation, the government allocation for social safety net programmes may not increase much in the next fiscal year.
Bangladesh loses around $3.3 billion a year due to unreliable power supply to homes, offices, and factories.
The private investment-to-GDP ratio in Bangladesh declined in the current fiscal year owing to a lower confidence among investors amid the persisting dollar crisis and global uncertainty, higher inflation and a fall in demand for goods in international markets.
Bangladesh will get $4.9 billion in loan from the World Bank for a dozen projects in the next fiscal year, given that those are ready on time for implementation as stipulated by the global lender.
Bangladesh’s gross domestic product is estimated to have grown at a slower pace in the current financial year with the biggest blow stemming from the industrial sector, official figures showed.
The government is in a dilemma over the timing of increasing the salary of its employees as a risk of further rise in inflation is associated with it.
Prime Minister Sheikh Hasina has directed the National Board of Revenue not to increase the ordinary people’s tax burden as it looks to improve its revenue collection by 16 percent in the upcoming fiscal year.
Prime Minister Sheikh Hasina has called for a conservative budget for the next fiscal year, discounting the impact of the forthcoming national elections on the pre-budget exercise.
The more than seven years average project implementation period for Bangladesh between 2016 and 2021 presents a risk to the effective implementation of the next country partnership framework, said the World Bank in a report recently.
The International Monetary Fund staff mission yesterday expressed reservations about the likelihood of Bangladesh meeting the minimum reserve requirements for the second tranche of the $4.7 billion loan.
The central bank’s planned move to a single, more market-determined, exchange rate would be central towards stabilising the precarious foreign exchange reserves and reducing external imbalances, said global ratings agency Fitch yesterday.
The government plans to increase its development spending slightly in the upcoming fiscal year due to the narrow fiscal space, the dollar crisis, the conditions attached to the IMF’s loan programme, and higher expenses on subsidies and interest payments.
The World Bank Group is set to provide Bangladesh with upwards of $2 billion every year over the next four years to help the country gear up for its next phase of development.
There is likely to be yet another increase in electricity tariff by June as the government looks to shed its subsidy burden in line with the demands of the International Monetary Fund.
The IMF staff mission is set to begin its next series of meetings with the Bangladesh authorities today to measure how the country is faring with the $4.7 billion loan programme.
The government is set to enact the first-ever public audit law that will usher in more transparency and accountability in public expenditure and expand the scope of the Office of the Comptroller and Auditor General of Bangladesh.
Bangladesh’s spending on subsidies and interest payments surged 45 per cent year-on-year in the first eight months of this fiscal year, turning out to be the highest in at least a decade.
The 5.5 percent growth forecast made by the International Monetary Fund for the Bangladesh economy would be decent given the pressure emanating from the external side, said a top official of the multilateral lender yesterday.
The poverty rate in Bangladesh has dropped significantly but income inequality is at an all-time high, according to the latest version of the Household Income and Expenditure survey -- in a puzzling development that raises questions about the nature of economic growth seen in recent times.
The poverty rate in Bangladesh has declined to 18.7 per cent and the extreme poverty rate stood at 5.6 per cent, according to the latest data from the Bangladesh Bureau of Statistics (BBS).
Bangladesh is poised to meet five of the six targets set by the International Monetary Fund for March as part of the $4.7 billion loan programme.
The finance ministry has already finalised the revised budget for this fiscal year and the concerned ministries are informed about it but it will not be made public until June.
The government is set to present a 12 percent bigger budget for fiscal 2023-24, the last of the Awami League government’s present tenure, as it looks to juggle austerity and growth ambitions.
The World Bank today said Bangladesh’s GDP would grow by 5.2 per cent in the current financial year, unchanged from its January forecast, as elevated inflation, tighter financial conditions, disruptive import restrictions, and global economic uncertainty keep hurting the economy.
The government is set to increase the amount of allowance under the social safety net programme in the next budget to cushion the poor from the impacts of high inflation.
The government is on track to meeting the International Monetary Fund’s tax collection target for March but may miss the mark in June.
The central bank has said the government will have to borrow more from non-banking sources to finance its expenditures in a bid to rein in higher inflationary pressures as the latter’s bank borrowing surged.
It seems the Bangladesh economy is stuck in a time warp, going by the latest edition of the Labour Force Survey unveiled yesterday.
In the end, was the government’s austerity stance just lip service?
Bangladesh is poised to get about $2 billion in budget support this fiscal year in a co-funding initiative led by the Asian Development Bank, in a development that would ease the continued pressure on the foreign currency reserves.
Development spending in Bangladesh stood at 32.10 per cent in the first eight months of the current fiscal year, the slowest pace of implementation during the rule of the Awami League, official figures showed.
Prime Minister Sheikh Hasina is scheduled to travel to Washington DC towards the end of next month to celebrate 50 years of partnership between Bangladesh and the World Bank.
The Rooppur nuclear power plant is likely to be delayed further if the recent revision of one of the associated projects is any indication.
Although the government discourages implementing agencies of development projects in Bangladesh from seeking time and cost revisions, several proposals in this regard are placed at each meeting of the Executive Committee of the National Economic Council (Ecnec).
Economists yesterday stressed on addressing the persistently high inflation, macroeconomic stability and low revenue base in the pre-budget session for the upcoming fiscal year with the finance minister.
Three issues would be dictating the upcoming fiscal year’s budget, the last of the Awami League government’s present five-year term: the International Monetary Fund’s conditions, the persistently high inflation and next year’s national election.
On paper, Tk 126,272 crore, the amount earmarked for social safety net programmes, looks to be a hefty sum. But the sum flatters to deceive: as much as 60 percent would be going towards those not in dire need.
Finance Minister AHM Mustafa Kamal yesterday said that though he is worried about the elevated level of consumer prices, the situation is still under the government’s control.
Though higher default loans and declining foreign currency reserves have been identified as the biggest risks to the economy of Bangladesh in recent times, Finance Minister AHM Mustafa Kamal yesterday fell short of coming up with any definitive measure to address the twin issues save offering some words of hope.
The proposed budget for 2023-24 is unrealistic and unattainable as the challenges that caused the economic growth to decelerate, foreign exchange reserves to dip and inflation to surge in the past one year still persist, said economists and think-tanks.
The government’s foreign debt servicing burden may rise by as much as 45 percent in the next fiscal year due to the devaluation of taka and higher utilisation of foreign loans in recent years.
Says economist Zahid Hussain
In June last year when Finance Minister AHM Mustafa Kamal placed the budget in parliament, inflation had already been creeping up and the foreign currency reserves were on the decline. These two had derailed the full economic recovery from a two-year crisis wrought by the Covid pandemic.
The health ministry continues to struggle with utilisation of funds allocated in the national budget, like it did in the past few years.
The allocation for subsidies in agriculture, food, and power will be raised considerably in the next budget, with an aim to ease inflationary pressure on people.
Sustaining the development that has taken place in Bangladesh in the past 14 years and curbing inequality are key major challenges facing the economy owing to the fallout of the coronavirus pandemic and the Russia-Ukraine war, said Planning Minister MA Mannan.