FY24 budget to be 10.64% bigger

The finance ministry has outlined a Tk 7,50,194 crore budget for the next fiscal year, which will be 18.87 per cent of the gross domestic product (GDP) and 10.64 per cent bigger than the FY23 budget.

As per the outline, the budget deficit will be 6 per cent of the GDP. GDP growth and inflation have been estimated at 7.5 per cent and 6.5 per cent respectively.

Finance Division officials presented the budget outline during a meeting of the budget management and resources committee on Tuesday. Finance Minister AHM Mustafa Kamal and other members of the committee gave their nod to the outline.

Health, agriculture, social security, and education sectors will be prioritised in the next budget. Besides, increasing the flow of money to consumers will be emphasised to control inflation.

Planning Minister MA Mannan told The Business Post the dollar crisis would be over within the next three months, adding the government was dealing with the current situation efficiently.

There is a global economic crisis caused by the impacts of the Covid-19 pandemic and the Russia-Ukraine war. As a result, Bangladesh is facing a tough economic situation. The FY24 budget outline was prepared with the aim of reviving the economy by tackling the crisis.

Finance ministry sources said the GDP growth target was estimated at 7.5 per cent in the FY24 budget. The same target was also estimated in FY23, but in the middle of the financial year, it appears that the ambitious growth cannot be achieved in the face of the changing economic situation.

That is why it was proposed to lower the GDP growth target to 6.5 per cent in the revised FY23 budget.

Inflation was estimated at 5.5 per cent in the FY23 budget. But due to the rise in the prices of essential commodities, it was proposed in the revised budget that inflation estimation be increased to 7.5 per cent.

However, the inflation estimation for the next financial year was proposed to be 6.5 per cent.

Meanwhile, the revised budget for FY23 will be reduced to Tk 6,57,971 crore from Tk 6,78,064 crore.

The revenue target in the FY24 budget has been estimated at Tk 4,86,000 crore, up from Tk 4,33,000 crore in the current budget.

Of this, the National Board of Revenue (NBR) will have a target to realise Tk 4,42,000 crore, which was Tk 3,70,000 crore in the current budget.

The deficit between income and expenditure has been estimated at Tk 2,64,194 crore in the next budget, which was Tk 2,44,864 crore in the current budget. The Annual Development Programme has been estimated at Tk 2,65,000 crore in the next fiscal year’s budget, up 8 per cent from the current budget.

Due to the recent rise in gas and fuel prices in the international market, subsidies may increase several times in the current financial year, which may create pressure on budget management.

Considering this, the Finance Division proposed increasing electricity and gas prices in the next financial year to reduce the subsidy pressure. Fuel prices have already been raised.

In another meeting of the economic affairs coordination council chaired by the finance minister on Tuesday, the Finance Division recommended reducing subsidies in gas, electricity, and fuel.

Among others, the agriculture minister, the planning minister, the commerce minister, and the revenue board chairman virtually joined the meeting, which discussed import-export, revenue collection, inflation, and remittance.