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The finance ministry has already begun drafting the budget for FY 2023-24 to combat war-induced economic woes and meet election-year demands.
According to ministry sources, Finance Minister AHM Mustafa Kamal will hold two meetings on Tuesday – one with the council for the coordination of fiscal, monetary, and exchange rate policies, and the other with the budget monitoring and resource committee.
This budget is being prepared at a time when the country’s economy is being challenged by the Russia-Ukraine war, which threatens to undermine the economic recovery.
Furthermore, the government must strike a balance between budgetary measures to help overcome the crisis and populist measures to woo voters ahead of the national election.
Bangladesh Bank Governor Abdur Rouf Talukder, NBR Chairman, finance secretary, ERD secretary and concerned officials of the finance ministry are expected to attend the meetings on Tuesday.
A draft of the next fiscal’s budget will be placed at the meeting and there will be discussions on potential budget size, GDP growth, economic challenges including rising inflation and the current fiscal’s income-expenditure situation, official sources said.
A tentative budget size for next fiscal year will be presented to the finance minister, as well as a review of this fiscal year’s budget.
Sources said the finance minister will present the budget to the national parliament in early June next year after determining the revised budget size and the new budget.
As the government’s last budget before the 12th national elections, it will be very important as it will be implemented half by the current government and finished by the new government.
As a result, the government has to seriously consider the election issues despite numerous economic problems.
Addressing the high inflation across the globe caused by the abrupt surge in the prices of food items, energy, essential commodities and industrial raw materials is going to be a major challenge for the new budget.
“The main challenge of the next fiscal’s budget is to fight inflation. Despite many internal shocks, the government will place an expansionary budget for the next year,” said a finance ministry official seeking not to be named.
“Development work will get a priority in the fag end of the incumbent government’s tenure. So, the size of Annual Development Programme will also increase,” he added.
The size of the next budget may surpass Tk 7.4 trillion with a 10 percent year-on-year hike over current fiscal’s Tk 6.78 trillion budget, while the next ADP size may rise by 12 percent from current Tk 2.47 trillion, sources informed.
Given the current reality, the GDP growth target may be lowered to 6.9 percent from existing 7.5 percent. The inflation target may be set at 7.5 percent even though it is hovering around 8 percent now.
The government expects more foreign resources in the next budget thanks to some commitments from its development partners.
Finance ministry officials think that the availability of foreign resources will make budget formulation somewhat easier for the government.
(DS)
