Home ›› 10 Jun 2022 ›› Front
In the upcoming 2022-23 financial year, the government plans to reach a 7.5 per cent gross domestic product (GDP) growth while keeping the average inflation rate at 5.6 per cent.
Finance Minister AHM Mustafa Kamal disclosed the targets in parliament on Thursday while proposing a Tk 6,78,064 crore budget for FY2022-23, starting from July 1.
“Only in the fiscal year 2019-2020, our economic growth was hampered due to the Covid-19 pandemic. According to the new base year, a record 7.88 per cent growth was achieved in FY2018-2019, but in the following year, FY2019-2020, it decreased to 3.45 per cent due to the pandemic,” he said in the budget speech.
“However, we were able to begin the process of economic recovery very quickly under the guidance of Hon’ble Prime Minister. As a result, 6.94 per cent growth has been achieved in FY2020-2021 despite the continued impact of Covid-19,” said Kamal, terming it “remarkable.”
“It appears from the economic variables that indicate that the second wave of Covid-19 continued in the first quarter of the current financial year but did not have a significant negative impact on the economy. Considering overall perspective, this fiscal year’s GDP growth is forecasted at 7.25 per cent,” he said.
“At the same time, the growth rate has been targeted to be 7.5 per cent for the next FY2022-2023, considering the lagged effects of the COVID-19 and the protracted crisis arising from the Russia-Ukraine conflict,” added the finance minister.
“Strong domestic and external demand will be the main driving force of our growth in the medium term,” he said. “Consumption and investment to increase the domestic demand and exports to increase the external demand will be one of our areas to focus on.”
“Our goal will be to build improved communications, necessary infrastructure and ensure power and energy security through increased public, private and foreign investment. The focus will also be on increasing the productivity of labor to increase export competitiveness,” he stressed.
“On the supply side, our goal is to accelerate the growth of the industry and service sector to achieve high GDP growth and employment. I am hopeful that this goal will be achieved through the speedy implementation of the establishment of economic zones,” Kamal added.
In the last 13 years, the country’s average GDP growth has been 6.6 per cent, above 7 per cent in FY2016-2017, FY2017-2018, and FY2018-2019 and exceeded 8 per cent in FY2018-2019, he said in the speech.
The World Bank has projected that Bangladesh’s GDP would grow by 6.7 per cent in FY23, while the ADB says it would be 7.1 per cent.
A higher inflation targeted
Meanwhile, the 5.6 per cent inflation rate target will be 5.3 per cent higher than the outgoing 2021-22 fiscal year’s target.
“The government is committed to contain the rising trend of inflation by addressing inconsistencies between supply and demand. Although it remained under control until the first quarter of this year, there has been a recent spike, mainly due to external and some internal factors,” the finance minister said in the budget speech.
“The causes of inflation at the global level include, among others, rising inflation in trade partners, rising oil prices, depreciation of Taka against USD, disruption of the global supply chain and the Russia-Ukraine crisis — all of which are largely beyond our control.
“Internal factors include the post-Covid-19 economic recovery, which is leading the economy to full employment. The government is, so far, refrained from adjusting domestic prices of the chemical fertilizer, gas, and power to control inflation and is providing additional subsidies,” Kamal said.
“Considering all these measures, I expect that the average inflation will be 5.6 per cent in the next fiscal year,” he concluded.
According to Bangladesh Bureau of Statistics data, the country’s inflation rate stood at 6.29 per cent in April 2022.
Kamal said, “Our main strategy for the next fiscal year would be to increase the supply while reducing the growth in demand.
“We have carefully designed the budget proposals for subsidies, incentives and sector-wise allocation for the next FY2022-2023 keeping in mind our core policy objective of containing the inflation and achieving the targeted economic growth.”
Regarding measures to keep inflation in check, the minister said that Bangladesh Bank is increasing the supply of US dollar to the foreign exchange market so that the value of Taka against the USD does not depreciate further.
“We have introduced sales through TCB so that the low-income people of the country can buy daily necessities at lower prices. In addition, a significant portion of the poor has been brought under the social security programmes,” he said.
Action is also being taken against the hoarders by commissioning mobile courts run by Directorate of National Consumer Right Protection and District Administration, he added.
