Economists want specific direction to rein in inflation

Staff Reporter :
Economists want specific directions in the forthcoming budget for the fiscal year 2023-24 to pull rein in the ongoing higher inflation.
The proposed budget is going to be placed in the Parliament at a time when all the macroeconomic indicators are in down trend.
Besides, production in the industrial sector is also hampered severely due to the ongoing electricity and fuel oil crisis and the businesses are failing to import consuming goods and capital machineries due to the dollar shortage.

Dealing with the elevated level of import costs and falling foreign currency reserves are also major challenges for the country.
Economic pressure is deepening further as the export earnings and the remittance inflow decline.
Exports and remittances, two major sources of foreign currencies for Bangladesh, plunged in April. Export earnings slumped 16.5 per cent year-on-year to $3.95 billion last month, according to the Export Promotion Bureau (EPB).

On the other hand, remittances sent by migrant workers and non-resident Bangladeshis living abroad dropped 16.2 per cent to $1.68 billion, despite a surge in the outflow of migrant workers in 2022.
Amid the situation, economists as well as the countrymen want specific direction in the upcoming budget to get rid of the current inflation.
They said that the government must be given importance on controlling the inflation along with increasing internal resource mobilization in the proposed budget.
The budget should be controlled instead of ambitious and the area of social safety net should be increased.

As per the Bangladesh Bureau of Statistics (BBS) data, the inflation rate was 9.33 per cent in April.

AB Mirza Azizul Islam, former adviser to the caretaker government, told The New Nation, “The budget should focus on controlling inflation, although it is quite difficult to control it by our internal measures as the inflation is largely due to the external reason.”

“So, social safety net should be expanded for the marginalized people by keeping sufficient allocation for them and the distribution system must be fair,” he added.
He further said, “Our foreign currency reserves are declining. So, developing it, the government should take initiatives to encourage people so that the expatriates send money in legal channel.”

Dr Ahsan H Masnur, Executive Director of the Policy Research Institute (PRI), said, “This year is the year of crisis. We have not been able to manage the crisis that started last year. The crisis has not spread out like wildfire, but it is burning. We are not able to extinguish it.”

Under this situation, the growth will not be high this year. Imports have been reduced and it will remain low, unlikely to increase this year. Remittances are not increasing while export earnings are also going down. So, the environment of the next budget will be complicated, he said.
So, the next budget should be controlled, instead of ambitious, he added.