Finance high-ups will sit tomorrow to finalise the outline of the first national budget of the new government amid severe Middle East war-linked stresses that are shaking up the country's economic base.
Finance and Planning Minister Amir Khosru Mahmud Chowdhury will preside over two meetings of the committee for coordination on fiscal, monetary, and currency exchange and resource management on the day, where the participants will review the overall economic situation of the country before reaching a consensus on budget arithmetic.
"While the new government was planning a big budget for the next fiscal year to accommodate its electoral pledges, the war-linked pressures now forcing it to give a second thought on this," a senior Finance Division official told The Financial Express.
He said like the current fiscal budget, the new budget could also be contractionary with a modest increase in size and smaller growth targets.
This may occur because of the possibility of low revenue earnings in the next fiscal year due to the external and internal shocks, especially those being created from war stresses and a possible global economic downturn, he noted.
Data shows the National Board of Revenue (NBR) missed the revenue earnings target by 28 per cent during the July-February period of the current fiscal year, creating a gap of Tk 714.72 billion.
This trend may continue during the remaining few months of the current fiscal year, finance officials apprehend, creating a big gap between the government's total earnings and spending, as well as pushing the administration to go for more and more borrowings from the banking sector.
According to officials concerned, the coordination council meeting is likely to set the total spending target at around Tk 8.9 trillion in the next fiscal year.
Also, the Gross Domestic Product (GDP) growth target may be set at around 6.0 per cent for the upcoming fiscal year, and the government is likely to set the target to keep inflation within 6.0 per cent then.
Data released by the Bangladesh Bureau of Statistics (BBS) shows that this March, the point-to-point inflation eased slightly to 8.71 per cent from 9.13 per cent in the previous month.
syful-islam@outlook.com