Inflation, foreign debt servicing create economic discomforts

Inflation and rising foreign-loan repayments are currently putting Bangladesh's economy under some stress, Finance Minister Abul Hassan Mahmood Ali said Thursday.
"The government initiatives regarding economic development do not work every time. Some here have worked well, some haven't yet," he said.
However, the discomforts are not worse as the government is working to return to the normal state, Mr Ali told journalists, after meeting an International Organization for Migration (IOM) delegation at his ERD office in Dhaka.
Responding to a question, the finance minister said there is some unease about inflation. "We want to see inflation go down. But some things do not progress quickly."
Mr Mahmood Ali, new to this job-and at a critical time the economy passing through-holds hope that the situation would turn for the better following government efforts.
The Finance minister notes that the government is under some pressure to pay back foreign loans. But the situation is not grim yet, he says.
"The foreign loans are being repaid, and Bangladesh has a good track record on it," he told the reporters about debt-service obligations that show an upturn.
According to Economic Relations Division (ERD) data, Bangladesh paid a total of $2.67 billion in interest and principal of loans to various development partners in the fiscal year (FY) 2022-23, compared to $2.01 billion in the previous fiscal.
According to officials concerned, the amount of loan repayment has further surged in the ongoing fiscal on debt maturity after the grace periods getting over for many loans taken largely for bankrolling development recipe.
Besides, interest payments have been rising on the back of increase in interest rates amid higher market-based borrowing by the government.
The country's foreign-debt buildup in local currency was estimated at Tk 6.73 trillion at the end of the last fiscal year, accounting for 15.12 per cent of its GDP.
Meanwhile, overall inflation hovers around double-digit highs, amid price rises which the government struggles to tame with import-duty cuts and market monitoring.
Minister Mahmood Ali on February 20 returned home after attending an annual conference of the International Fund for Agricultural Development (IFAD) in Italy.
Speaking about the conference, he said among the countries that receive assistance from the IFAD, Bangladesh receives the most.
"So far, Bangladesh has received assistance of about $2.0 billion from the development agency. It will increase further in the future," he added.
Speaking about his meeting with the IOM delegation, he said the global migration agency would continue to help Bangladesh in areas of migration among other things.

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