Macroeconomy turns more volatile

Al Amin :
All economic indicators–export earnings, revenue collection, remittance inflow and foreign currency reserves–are showing down trend enhancing volatility in macroeconomy of the country.
The government’s borrowing from the banking system has started to go up due to the sluggish revenue and falling investment in savings certificates.
The government has taken loans worth around Tk 20,000 crore from the banking system in last three and half months, which was Tk 5,000 crore during the corresponding period of last year.
In current fiscal year, the government has a target of taking loans worth Tk 35,000 crore from savings certificates. But it received only Tk 401 crore in the first two months.
In total, the government’s debt in savings certificates stood at Tk 3,64,411 crore and in banking sector stood at Tk 2,86,925 crore till August of the current fiscal year.
Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), told The New Nation, “The government’s expenditure has increased due to increase in fuel prices. Apart from this, the increase in the price of other products in the world market has also affected government purchases.”
“Increase in dollar price has also impacted on it. But the revenue collection is not increasing accordingly. Although there was a slight increase in the first two months of the current fiscal year, it decreased in September,” he said.
“Moreover, the government is not getting loans from savings certificates, which prompted to borrow from the banking system,” he added.
After a big jump in the first two months of the current fiscal year, the revenue collection fell in September. The National Board of Revenue (NBR) registered 23 per cent growth in first two months, but it declined to 13 per cent in last month, according to provisional data of the NBR.
NBR officials said low imports in September compared to July-August had a negative impact on revenue collection.
Besides, decline in consumption power of the people caused by inflation is also reason for
decreasing revenue collection, they added.
On the other hand, exports slipped 6.25 per cent year on year to $3.9 billion in September as the flow of orders for garments slowed amid higher inflation and concerns of recession in the major destinations owing to the dragging Russia-Ukraine war.
The remittance sent by the expatriates through legal channels also dropped 24.42 per cent in September compared to August. The remittance inflow was recorded at $1.54 billion in September, which was $2.03 billion August.
Due to the decline in export earnings and remittance inflow, the country’s foreign exchange reserves dipped below $36 billion on Wednesday due to increased import payments compared to slower-than-expected export earnings.
The reserves stood at $35.98 billion, down from $36.11 billion a day ago, according to data from Bangladesh Bank.
Imports surged to $12.7 billion in the first two months of this fiscal year, up 17 per cent from a year prior widening trade gap more than 6 per cent to $4.56 billion in the July-August period from a year earlier, according to data from Bangladesh Bank.
The trend was also reflected in the current account balance, which fell further into the red, from $439 million in July to $1.5 billion by the end of August.
Speaking at a programme on Thursday, State Minister for Planning Dr Shamsul Alam said that the country’s economy is under a bit of pressure due to the global economic crisis erupted by the Russia-Ukraine war.