Al Amin :
Under pressure from the International Monetary Fund (IMF), the government’s upcoming budget for fiscal year 2024-25 may see only a marginal increase.
This represents a shift from the previously ambitious budgets that typically expanded by 12 to 13 percent annually, barring the pandemic period.
The projected budget is set to be Tk 7,97,000 crore, marking a 4.9 percent rise from the current year, considerably lower than the increases seen in previous years. This indicates a retreat from the government’s usual expansive fiscal approach.
A finance ministry official explained that the new budget would be contractionary, reflecting subdued revenue collections and poor import and export performance. “This trend may continue into next year,” the official added.
One key goal of the IMF’s involvement is to cap the budget deficit at 5 percent to help manage inflation and alleviate pressures on foreign currency reserves.
Scheduled for presentation on June 6, the budget will likely emphasize measures to control rising consumer prices, enhance social safety nets, and cut subsidies in non-essential sectors while preserving them in agriculture and food.
With inflation persisting above 9.5 percent in recent months, the austerity measures come at a time when many low-income families are struggling to cope with the escalating cost of living.
The revenue collection target for the current fiscal year is about Tk 5,00,000 crore, with a proposed increase to Tk 5,40,000 crore next year, translating to a growth target of 4.5 percent in FY25 compared to the current rate of 16 percent.
Additionally, the government might aim for a GDP growth of 6.75 percent next fiscal year, down from this year’s revised target of 6.5 percent from an initial 7.5 percent, reflecting widespread macroeconomic strains.
Dr. Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), commented on the budget constraints, “There is no benefit in increasing the size of the budget if the revenue cannot be increased.”
He emphasized the need for a conservative budget that aligns with the current economic challenges, adding, “So, a low growth budget will be correct.”