Bangladesh is facing a deep economic crisis and may need to endure "two difficult years" to recover, Finance Minister Amir Khosru Mahmud Chowdhury warns.
As such, he says, the government is likely to take measures that may not be popular.
During discussion on the motion of thanks on the President's address in parliament on Thursday, the minister said, "We may have to endure hardship for two years. The next two years will be difficult. We will have to make many decisions and steps some of which may not be popular."
Presenting what he describes as a grim picture of the economy, the finance minister said the country's tax-to-GDP ratio has fallen below 7.0 per cent, the lowest in South Asia. The poverty rate stands at 29.93 per cent, prompting him to remark: "Look at the condition we are in now in terms of the economy."
He further mentions that capital-machinery imports, which were 53 per cent during the last tenure of the Bangladesh Nationalist Party, have dropped sharply to 14.5 per cent. Private -sector credit growth has also declined to 6.0 per cent compared to 18.2 per cent in 2005-06. Default loans in the banking sector have surged to 30 per cent. "When a country's banking sector has this scale of non-performing loans, the economy almost grinds to a halt," he tells the newly elected parliament after a political changeover.
The custodian of exchequer further notes that the government currently provides annual subsidies amounting to Tk 360 billion, with an additional Tk 200-300 billion required this year.
External overdue payments stand at US$508 million for fuel imports and $737 million for gas.
The deposed administration has been accused of widespread "corruption, looting and money laundering" across the banking sector and other industries during its one-and-a-half-decade rule, he points out. A white paper was prepared under the interim government led by Muhammad Yunus to assess the state of the economy.
In addition, he informs the House, the Anti-Corruption Commission has filed cases against several industrial groups, Sheikh Hasina, and members of her family on allegations that include money laundering. Measures such as asset seizures and freezing of bank accounts have also been taken.
Despite these efforts, the economy has yet to recover during the post-uprising interim period.
The situation worsened further after the outbreak of the Iran War on February 28, which put additional pressure on sectors such as energy under the new BNP-led government.
Addressing the parliament, the finance minister says the economy has been pushed to such a low level that only tough reforms, deregulation, and structural changes could restore stability.
He stresses that lifting the economy from its current situation would require decisive and, at times, unpopular policy measures over the coming years.
