The interim government may backtrack from its initial plan to set an ambitious GDP growth target of 6 percent for the next fiscal year amid the new economic reality and settle for 5.5 percent.

The development comes following lower projections by multilateral lenders. For instance, last week the Asian Development Bank forecasted next fiscal year's growth would be 5.1 percent.

A 6 percent GDP growth is very high in any condition and in any comparison to global economic growth or the South Asian growth average, Zahid Hussain, a former lead economist of the World Bank's Dhaka office, earlier told The Daily Star.

The new GDP growth target, inflation and the size of next budget were discussed at yesterday's fiscal coordination council meeting, led by finance adviser Salehuddin Ahmed.

The government's main target is to bring down inflation in the next budget, The Daily Star has learnt from finance ministry officials with knowledge of the discussions in the meeting.

"We are keeping the low GDP rate aiming to reduce the inflation," said one of the officials.

The inflation target will be set at 6.5 percent by the government in the upcoming budget while the ADB has projected that inflation would be hovering around the 8 percent-mark next fiscal year.

This fiscal year, the government set the inflation target at 8 percent while the ADB's projection was 10.2 percent.

The country's overall inflation stood at 9.35 percent in March, up from 9.32 percent the month prior, according to the latest data released by the Bangladesh Bureau of Statistics (BBS).

Usually, the budget size increases every year, but the upcoming budget will be smaller than the previous year's original budget.

The budget size would be about Tk 7,90,000 crore, which is slightly less than the original budget for this fiscal year: Tk 7,97,000 crore.

The smaller budget is in line with the prescription of economists and the International Monetary Fund with a view to narrowing the budget deficit.

If the deficit increases due to low revenue collection as a result of the ongoing economic slowdown, the government would need to borrow from local banks, which can fuel inflation.

A 6.5 percent inflation target is achievable if the budget deficit remains below Tk 220,000 crore next fiscal year, Hussain said.

Finance ministry officials believe the budget deficit in the next fiscal year would be close to this amount.

Out of the total allocation, the size of the annual development programme would be Tk 2,30,000 crore.

In the original budget for this fiscal year, the allocation for ADP was Tk 2,65,000 crore, which was later revised down to Tk 2,16,000 crore.