In post- budget panel discussion at American Chamber of Commerce, Bangladesh (AmCham) on Tuesday at Sheraton Hotel Banani, Special Assistant to the chief adviser for Ministry of Finance Dr. Anisuzzaman Chowdhury said inflation is a political issue requiring political solutions.
It can't be resolved alone relying solely on monetary policy he emphasized pointing to the need for coordinated policy among all economic ministries and improved communication among major institutions to effectively address economic challenges.
The event, titled "Reflection, Response and the Road Ahead: National Budget FY 2025-26," gathered business leaders, economists, and policymakers to analyze the newly announced national budget.
AmCham President Syed Ershad Ahmed opened the discussion highlighting the chamber's commitment to fostering dialogue on economic policies.
Dr. Chowdhury, holding the rank of Minister of State and oversees the Ministry of Finance, criticized lack of coordination in policy implementation, stating that the central bank has failed to reduce default loans and control inflation.
He stressed the importance of identifying and addressing irrationalities within the economy and called for a focus on improving the tax-GDP ratio to reduce dependency on foreign aid .
Md. Moinul Huq, Country Officer of Citibank N.A. Bangladesh moderated the discussion among distinguished panelists, including Dr. Fahmida Khatun, Executive Director of the Centre for Policy Dialogue (CPD); Dr. Zahid Hussain, former Lead Economist at the World Bank's Dhaka office; and Dr. Masrur Reaz, Chairman of Policy Exchange Bangladesh.
Dr. Reaz presented the keynote speech, describing the FY26 budget as highly ambitious. He pointed out that inflation remains high and the proposed budget may exacerbate it.
He noted that industrial output is declining in most sectors and that the budget lacks coordinated policy frameworks, offering only fragmented steps without clear guidelines. He also emphasized the absence of strategies for sustainable job creation in the private sector.
Dr. Hussain said the budget's success depends on the banking sector's support and called for elimination of intermediaries in the taxation system. Dr. Khatun warned about the increasing reliance on both foreign and domestic borrowing, describing it as costly and prone to misuse.
She criticized low allocation in education and health, noting that Bangladesh ranks lowest among 44 LDCs in education spending as a share of GDP.
AmCham President Syed Ershad Ahmed voiced concerns over the proposed support for foreign direct investment (FDI), emphasizing that law and order are primary issues affecting FDI.
He also pointed out that Bangladesh is lagging in logistics improvements and that the budget allocations for green energy are insufficient to address climate change challenges.
During the question-and-answer session, participants discussed the need for broader industrial incentives beyond tax exemptions for specific zones. They also emphasized the importance of addressing inflation through political consensus and focusing on the quality of expenditures rather than merely increasing spending.
The dialogue concluded with a consensus on the necessity for comprehensive, coordinated policies and political commitment to address the country's economic challenges effectively.
