Budget FY24: Govt may set GDP growth target at 7.5%

The government may set the gross domestic product (GDP) growth target for the upcoming fiscal year 2023-24 (FY24) at 7.5 per cent.

Besides, the budget for the next fiscal year may set the estimated rate of inflation at 6.5 per cent, according to Finance Division officials. Proposals in these regards may be placed in the second meeting of the coordination council on budget management and finance and currency exchange rate of the finance ministry, according to officials familiar with the matter.

Meanwhile, the GDP growth for the current fiscal year 2022-23 has been lowered to 6.5 per cent from 7.5 per cent in line with the predictions of economists and national and international institutions.

“Although inflation is close to 8 per cent in the current financial year, it will come down in the next fiscal as inflation will decrease globally. Also, trade and investment activities will continue in alternative ways to overcome the impact of Covid-19 and the Russia-Ukraine war. As a result, GDP growth will also be positive,” an official of the Finance Division told The Business Post on condition of anonymity.

In the meantime, presenting various data in a meeting of the budget-related working group, a representative of the Bangladesh Bank said according to the central bank’s forecast, the average inflation for the current fiscal year will be around 8 per cent instead of 5.6 per cent as was fixed in the budget.

International financial institutions, including the World Bank, the International Monetary Fund (IMF) and the Asian Development Bank (ADB) have also forecasted in various reports that the GDP growth in FY23 will be 6 to 6.6 per cent against the government

estimates.

The government has taken regulatory steps, including limiting foreign currency supply, curbing import of goods to reduce domestic demand in the current fiscal. Amid a historic energy crisis, authorities have introduced power rationalisation initiatives. On top of it, the price of electricity and fuel has been increased step by step.