The position of basic macroeconomic indices, including revenue collection, remittances, export growth, annual development programme (ADP) expenditure and money supply in the first quarter (July-September) of the current FY23, was satisfactory.
Finance Minister AHM Mustafa Kamal stated this on Thursday in a report placed in the House on the progress of the implementation 2022-23 budget in the financial year’s first quarter.
“Revenue collection was done as per the target, a positive trend was seen in import and export income, and as a result, I am hoping that we will be able to attain our desired target in the current budget,” he said.
He mentioned the revenue collection registered 19.33 per cent in the first quarter, which was 18.72 per cent in the last fiscal year.
The public expenditure was 11.14 per cent against 11.90 per cent in the same period of FY22, while the ADP implementation rate was 8.55 per cent against 8.26 per cent.
The finance minister said that due to the increase in import expenditure, there was a deficit in the current account balance, which reduced to $36.47 billion in the reserves on September 30, 2022. The deficit was $46.22 billion in the same period of 2021.
The growth in the remittances inflow was 4.89 per cent against 19.44 per cent in FY22.
The export income growth rate was 13.38 per cent, against 11.37 per cent during the same period of the last fiscal.
“The positive trend of export trading growth will play the role of an important variable in advancing our economy,” he said.
Kamal said the import expenditure (cost and freight) increased 11.67 per cent which was 47.56 per cent in the same time of the last fiscal year.
He said the normalisation of economic activities after the Covid-19 period and the significant rise of imports of intermediary and capital machinery led to a huge hike in import expenditure.
“But, currently avoidance of luxury items and exercise of austerity by the government caused a decrease in import expenditure,” he said.
The LC (letter of credit) opening during the July-September tenure in 2022 was $18.58 billion which was 4.57 per cent less than the same period of the previous fiscal year.
As per the report, annual average inflation was 5.50 per cent in September 2021 while it increased 6.96 per cent in September 2022. On the other hand, the point-to-point inflation in September 2021 was 5.59 per cent, while it increased to 9.10 per cent in 2022.
Regarding the budget deficit, Kamal said the estimated deficit is 5.51 per cent of the GDP (gross domestic product). For deficit financing, 2.22 per cent sill come from external sources while 3.29 per cent would be mitigated from domestic sources.
He said that to contain the pressure from inflation, the central bank took the path of contractionary monetary policy.
The minister said that thanks to timely steps from the government it was possible to contain the inflation forced by the price hike of fuel and food items due to the Russia-Ukraine War, and the depreciation of Taka against US dollar.
