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Budget is full of good intensions but lacks directions: RAPID

Published : Friday, 14 June, 2024 at 12:00 AM  Count : 478

Budget is full of good intensions but lacks directions: RAPID

Budget is full of good intensions but lacks directions: RAPID

Economists at a discussion on Thursday called for harmonization of policies to address inflation and  sustained economic growth. They termed the proposed budget for 2024-25 (FY25) as "a budget is full of good intentions but lacks directions".
They expressed skepticism about the governments target of raising private sector investments to 27.3 percent of GDP from the current 23 percent amid challenging economic conditions.
The observations emerged at a "Discussion on Proposed Budget for FY 2024-2025" organised by the think- tank Research and Policy Integration for Development (RAPID) at the National Press Club in the city.
Dr MA Razzaque, Chairman of RAPID, presented the keynote, which pointed out that in the first 11 month of FY24, the average inflation rate stands at 9.73 percent while food inflation is much more higher than 10 percent.
However, the target of reducing inflation to 6.5 percent is a challenging one considering the possibilities of further depreciation of value of taka, continued import control measures and the overall current macroeconomic situation.
It also said with the current level of inflation at 10 percent, how it could be possible to achieve the high growth rate set for FY 25 at 6.75 percent. The paper also termed the 27.3 percent private investment-GDP target at the current average of 14.5 percent lending rates as unrealistic.
Dr Razzaque moreover questions whether it is possible to raise investment by 4.0 percentage points just in a year,
Prime Ministers Economic Advisor, Moshuiur Rahman, said inflation is not uniform across the sectors, highlighting the importance of food security and advocating for lower or no taxes on unprocessed food to ensure affordable prices to the population.
He said the budget mainly focused on three topics including macroeconomic stability, loan management, and mid-term fiscal planning.
BIDS director general Binayak Sen said the government has taken a policy of adjustment based on global and internal conditions. He pointed out that collective steps have been taken including exchange rate review, interest rate control and fiscal expenditure.
He also expressed disappointment over the universal pension scheme saying there exists a problem from the demand and supply sides regarding the pension scheme.
Shams Mahmud, BGMEA Director, stressed the crucial role of the garment sector in the economy while noting that the sector has received incentives and performed well in exports but broader macroeconomic stability remains a concern.
Dr. M Abu Yousuf, Executive Director of RAPID, pointed out the necessity of raising tax net while  emphasizing that the government should take LDC graduation seriously to prevent macroeconomic weaknesses.
He calls for an expanded tax net and suggested that the National Board of Revenue (NBR) collaborate with city corporations to identify 10 million new taxpayers. He also said the country would not be able to raise investment with restrictive monetary policies while suggesting a balanced approach to manage inflation and stimulate economic activity.
President of DCCI Ashraf Ahmed expressed his frustration over reducing inflation through raising interests.






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