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Former Bangladesh Bank governor Dr Atiur Rahman has said that the budget-makers could have aimed for a GDP deficit of less than 4.5 per cent in the newly proposed budget for fiscal year 2024-2025. He believes this would alleviate pressure on the domestic banking sector.
Dr Rahman noted that if the budget deficit were limited to 3.5 per cent of GDP, the government would need to borrow Tk 56 crore less from local banks, which could help contain inflation.
He made these remarks on Friday in Dhaka’s Khondker Ibrahim Khaled Conference Hall at the Unnayan Shamannay office, while presenting the keynote paper at a post-budget reaction session.
The event was organised as part of the “Amader Sangsad (Our Parliament)” programme, jointly organised by Bank Asia PLC and Unnayan Shamannay.
Other expert discussants included Ark Foundation Executive Director and health economist Prof Dr Rumana Huque, banking sector expert Faruq Moinuddin, and sociologist Khondokar Shakhawat Ali.
In his keynote address, Dr Rahman said that the budget-makers have demonstrated responsiveness to global economic instabilities and domestic challenges by pursuing contractionary fiscal measures.
However, he believes that more funds could have been allocated to education, health, and social safety sectors, considering the high inflationary pressure on households.
Dr Rumana Huque praised the government for slightly increasing health sector allocations despite the overall contractionary budget. She pointed out that with two-thirds of health expenses in the country being borne by citizens (out-of-pocket), increasing funds for medical equipment and diagnostic tests at government-run healthcare facilities could significantly reduce the healthcare burden on common people.
Banking sector expert Faruq Moinuddin suggested that instead of imposing more taxes on existing taxpayers, policymakers should focus on broadening the tax net.
Sociologist Khondokar Shakhawat Ali emphasised the need to bolster allocations for education, health, and social security sectors.
Bank Asia PLC’s Head of Corporate Affairs Siddique Islam delivered the vote of thanks on behalf of the organisers.
