Economists have termed the target of taming inflation to 6 percent ambitious amid pressure on macroeconomic indicators while the budget has hardly get the expansionary plan to attain 7.5 percent growth in gross domestic product (GDP).
“The budget seems a dream project. When the private sector is struggling for credit, how the 7.1 percent growth will come in GDP. Besides, the government has planned to pull out Tk 1.5 trillion from internal source which may fuel inflation further,” Ahsan H Mansur, executive director of Policy Research Institute (PRI), told the Daily Sun.
Dr Mansur thinks that offering ‘low-cost commodities’ on truck sales is a rare method of taming inflation which is now on the verge of a double digit.
“The government is fueling inflation itself by printing more currency notes. There is a scarcity of dollars in market. There is no change to stable the foreign exchange. We didn’t get any specific measures to stable the volatile dollar market,” Mansur, also a former staff of International Monetary Fund (IMF), told the Daily Sun.
Policy Exchange Bangladesh Chairman Dr Masrur Reaz has termed the growth target of new fiscal year as an ambitious one against the increasing pressure on macroeconomic indicators.
“The balance of payment is worsening. At this challenging time, the government allocated planned a collective increase of ADP and operating expenditure by over 20 percent. It can be more compact considering stress on economy,” Dr Masrur, a former staff of the World Bank, told the Daily Sun.
The government will spend Tk 4.75 trillion on operating expenditure, a 14.72 per cent hike from the revised budget for the outgoing fiscal year. Tk 2.63 trillion will go to the Annual Development Programme (ADP).
The economist hardly found the growth point from the budget speech to drive the ambitious plan when the local industries are suffering amid the shortage of power and gas supply.
“The government’s bank borrowing will increase significantly in the next fiscal which will crowd out the private sector from access to finance. The banks will reluctant to invest in business when the demand will come from entrepreneurs,” Dr Masrur added.
Economist Prof Abu Ahmed said the budget is trying to portray a ‘dream’ among people without any specific measures to stabilise the inflation and foreign exchange market.
“When the bank borrowing will increase from public sector, the GDP growth faces an uncertain future through narrowing the access to finance for industries, lifeline of economy. Besides, the capital market gets none from the budget,” Prof Ahmed told the Daily Sun.