Tk 8tn budget likely with 6.9pc GDP growth target

The government is preparing the next annual budget, aiming to reduce inflation rate and restore financial stability, according to an official document seen by UNB.
The size of the budget is likely to be Tk 8.05 trillion, and the expenditure growth is being fixed at 8.0 per cent, down from 10 to 12 per cent of previous years.
At the same time, the GDP (gross domestic product) growth target is also being lowered to 6.9 per cent (7.5 per cent in the current budget).
The government concentrates on giving more attention to controlling inflation rather than achieving growth.
The policymakers are considering increasing the inflation target to 7.5 percent as against 6.0 per cent in the existing budget of FY2023-24, the document stated.
Also, due to the existing political and economic situation, the budget for the current fiscal year (2023-24) will not be fully implementable. As a result, the government decided to cut at least Tk 520 billion.
Amid the economic crisis and austerity programme, the finance division is moving away from giving an expansionary budget for the next fiscal year 2024-25.
The size of the budget is increasing by Tk 430 billion compared to the budget of the current fiscal 2023-24. The revenue target will increase by Tk 511 billion.
Usually, the size of a new budget increases by 10 to 12 per cent compared to the current year's budget, said a finance division official. But this time it will increase by less than 8.0 per cent.
Revenue collection is low, imports and exports are decreasing. Considering these issues, it is not possible to give a big budget like previous years, said the official who wished anonymity.
Dr AB Mirza Azizul Islam, former bureaucrat and adviser of a caretaker government, told UNB that the decision not to give an expansionary budget is correct in the prevailing situation.
Currently, there is uncertainty in every supply and investment is not expanding as desired. In this situation, achieving over 7.0 per cent GDP growth is challenging, he said.
"Inflation is now 10 per cent which shows no signs of abating, so lowering GDP growth is justified," Mirza Azizul said.
Dr Ahsan H. Mansur, executive director of Policy Research Institute (PRI), said that the decision against expanding the budget is in line with the time's requirement.
There is no benefit in increasing the size of the budget if the revenue cannot be increased, he said.
"There are dollar and revenue challenges. The size of the budget should be fixed keeping that in mind. As a result, a low growth budget will be appropriate," he said.