Staff Reporter :
As the country braces for the unveiling of its fiscal plan for the upcoming 24–25 fiscal year, the government has announced its intention to borrow more than 2 lakh and 57 thousand crore taka to address pressing economic challenges.
Against a backdrop of domestic and global crises, including stagnant growth indicators and escalating inflation, policymakers are faced with the daunting task of navigating the nation’s economy towards stability.
With the fiscal year 2023–24 drawing to a close, concerns loom over the lack of sustainable economic growth, exacerbating uncertainties surrounding the country’s financial future.
The process of formulating the budget for the fiscal year 2024–25 is currently underway, with Finance Minister Abul Hassan Mahmood Ali poised to unveil a budget totaling 7 lakh, 97 thousand crore taka, signalling the government’s commitment to bolstering economic resilience.
A pivotal step in the budget formulation process was the recent convening of the Fiscal, Monetary, and Exchange Rate Coordination Council, chaired by Finance Minister Abul Hassan Mahmood Ali.
However, following the meeting, the Finance Minister refrained from engaging with journalists, leaving many questions unanswered regarding the government’s economic strategy moving forward.
Insider sources reveal that the target revenue for the new budget is set at 5 lakh 40 thousand crore taka, leaving a deficit of 2 lakh 57 thousand crore taka to be covered through borrowing.
This borrowing will include 1 lakh crore taka from abroad, with the remaining amount sourced domestically.
Discussions during the meeting underscored the imperative of controlling inflation, which continues to rise, posing challenges to macroeconomic stability.
Additionally, concerns persist over stagnant remittances from expatriates and underwhelming export growth, further compounded by pressures from imports.
Amidst these challenges, various aspects of the upcoming budget were deliberated upon, with key stakeholders, including Bangladesh Bank Governor Abu Reza Talukdar and Chairman of the National Board of Revenue (NBR) Abu Hena Md. Rahmatul Munim, in attendance.
While the government remains committed to supportive measures in budget formulation, expectations suggest that the size of the upcoming budget may witness a moderate increase compared to the current fiscal year.
Notably, efforts are underway to maintain the inflation target between 6 and 7 percent, with a GDP growth target set at 6.75%.
However, officials at the Finance Division are doubtful about how much control can be maintained over inflation by reducing the size of the budget.
They argue that there is not much scope for experimentation in fiscal policy to control inflation. Nevertheless, the size of the budget is not being increased for the new fiscal year to maintain control over government spending, they said.
Currently, the inflation rate is over 9%. However, for the upcoming budget, a target of a 6.5% inflation rate is being set.
Despite multiple announcements by the Ministry of Finance and the Bangladesh Bank to bring down the average inflation rate to 7.5% by the end of the current fiscal year, it has had no impact on the market.