‘Social stability a must to implement budget’

Planning Minister MA Mannan on Sunday said the economy is facing tough challenges now, and social stability is a must in such a situation to implement a budget whatever its size.

Bangladesh Bank and National Board of Revenue are working under pressure to control inflation and keep fortunes of fixed and lower-income segment stable, he said.

Mannan said this while speaking as the chief guest in the post-budget discussion organized by American Chamber of Commerce in Bangladesh (AmCham), held in a hotel in Dhaka on Sunday.

Former adviser of a caretaker government AB Mirza Azizul Islam, Policy Research Institute of Bangladesh (PRI) Executive Director Ahsan H Mansur and Policy Exchange Bangladesh Chairman Masrur Reaz spoke on the occasion.

Mirza Aziz said the budget size is acceptable but allocation in different sectors needs to be revised considering present economic challenges.

He also urged reform of the NBR and bond market, both of which need modernization and reformation to attract investment as well as foreign direct investment.

Ahsan H Mansur presented a keynote paper on different sides of the proposed budget and illustrated that two major problems have emerged: sharply widened trade account deficit due to a surge in imports leading to an unsettled foreign exchange market, and inflationary pressure.

Global price shock in the aftermath of the pandemic due to the ongoing Russia-Ukraine war has led to a decline in inflow of workers’ remittances following reopening of international travel and the widening of the gap between the kerb market and interbank “exchange rate,” he added.

Slow and inadequate flexibility in the exchange rate and the inability to use monetary policy given the interest rate caps on the lending and deposit rates, are acting as restraints on policy, he said.