Finance Minister AMA Muhith wants to keep, as usual, the level of deficit in the next national budget within 5.0 per cent of the GDP.
But some economists said they would not mind if the deficit widened by another one percentage point for the sake of developing the country's major infrastructures.
The finance minister's view came at a meeting with a number of leading economists and the central bank high-ups on Wednesday.
The economists attending the meeting suggested depreciation of local currency, Taka, mainly to boost export receipts the growth of which has been lower than the anticipated level.
They viewed that it was important to raise the domestic demand that would lead to an increase in the volume of imports.
The ministry of finance (MoF) organised the meeting with the Bangladesh Bank (BB) top notches and some select group of economists at the secretariat prior to the finalisation of the budget speech for the fiscal year (FY) 2015-2016.
Finance minister AMA Muhith presided over the meeting. Commerce Minister Tofail Ahmed and senior secretaries were also attended the meeting.
BB Governor Dr Atiur Rahman, its chief economist Dr Biru Paksha Paul and PRI executive director Dr Ahsan H Mansur also joined the meeting.
Economists, PRI's Ahsan H Mansur in particular, placed a number proposal for consideration, meeting sources said.
Dr Mansur felt that the government could widen its budget deficit as the time was suitable for it under the prevailing circumstances.
Budget deficit at 5.0 per cent of the gross domestic product is considered 'tolerable'. Bangladesh has been maintaining the level within 5.0 per cent for long.
The PRI economist, however, said the government could allow a slightly higher level of deficit for a year or two.
Currently 1.0 per cent deficit is equivalent to around US$1.7 billion and it will be nearly $2.0 billion in fiscal year (FY) 2015.
He said the deficit may be funded from domestic sources. He argued that the deficit financing from domestic sources would not create any crowding-out effect on the economy.
He also argued that the government might go for sovereign bond to fund the deficit if it thought domestic borrowing will affect the private investment.
Another meeting source said a number of senior secretaries agreed on the proposal for widening the deficit.
He also said the economists suggested depreciation of the local currency as Bangladesh's exports have been losing its competitiveness in the overseas market as the currencies of most of its rivals have gone through process of depreciation against the US dollar.
The growth of Bangladesh exports was far less in the July-April period of this fiscal compared to that of the corresponding period of the last fiscal.
During the period, Bangladesh fetched $25.3 billion, registering only 2.63 per cent year-on-year growth.
The country's local currency Taka remained at least 20 per cent higher if the real effective exchange rate is accounted for.
Indian Rupee depreciated 1.5 per cent on Tuesday to boost its exports and remittances.
Indonesia, Malaysia and Vietnam also depreciated their respective currencies recently.
Meeting sources said the economists suggested raising domestic demands of goods and services.
jasimharoon@yahoo.com
