The government should cut expenditure and adopt market-based bank interest and USD rates to tackle skyrocketing inflation, to prevent it from rising further during election year, said Policy Research Institute of Bangladesh (PRI) Executive Director Ahsan H Mansur.
Making the observation on Tuesday at a post-budget press briefing and discussion in Dhaka, Mansur added that the country is currently facing crises centring on three issues – monetary policy, revenue policy and foreign loans.
He continued, “Many countries across the globe have increased loan interest rates to curb high inflation. Interest rates are usually fixed considering the global economic situation, but the rate is fixed in Bangladesh. This is not the right decision.”
“The government borrowed a high amount of money last year from banks, which is the highest in Bangladesh’s 50 years of history. The government took a chance by keeping a low interest rate.”
Mansur pointed out that pension and savings certificates should not be included in the social safety net.
“Current allocation in the social safety net should be increased to protect low income people as inflation has gone up by around 10 per cent in the country, which may go up further in the coming days,” he said.
Addressing the event, PRI research director Dr Abdur Razzaque said, “The growth and investment target in the new budget for FY24 is unrealistic, as the country’s economy is under pressure.
“The government did not take proper steps to tackle the inflation. If proper policy measures are not taken, this situation may worsen. The government has to pay around $940 billion loan interest in the next year. So, the country's economy could face more pressure.”
