Business Report :
Borrowing from internal sources to meet the budget deficit could lead to a rise in inflation in the next fiscal year, the Institute of Chartered Accountants of Bangladesh (ICAB) said on Saturday.
The government wants to finance the budget deficit by borrowing Tk 160,900 crore, or about 20 percent of the total budget outlay, from local sources, according to the proposed budget for 2024-25 placed in the parliament on June 6.
“Now, the country’s inflation rate is over 9 percent, which is indicative of hyperinflation. Therefore, local borrowing may fuel inflation,” said Mohammad Forkan Uddin, president of ICAB.
He made the comments at a post-budget media briefing at its office in Dhaka’s Karwan Bazar.
He commended the government for taking several practical initiatives in the proposed budget, including introducing tax rates applicable for two years, reducing tax rates for private companies and one-person companies and reducing the withholding tax on consumer goods.