Slow revenue collection and heavy bank borrowing in the first quarter may affect the expected economic growth and fiscal balance this fiscal year, said officials.
A Finance Division report reveals that the export and remittance growths have declined during July-September period, adding to the woes of economy.
The fiscal’s first fiscal coordination council meeting is set to discuss the issues today, including the budget implementation situation.
Former finance adviser to last caretaker government AB Mirza Azizul Islam thinks the fall of revenue was a result of the increased bank borrowing.
According to him, the economic indicators are doomed to be affected as investment has remained poor and the export sector tumbled.
World Bank and Asian Development Bank say if the fear of political instability persists, it will not be positive for economy in the long run.
However, a planning commission member ruled out any possibility of economic slowdown in the current fiscal.
“What World Bank and ADB are saying may prove false. Despite dull investment situation, the economy is expected to
have better growth rate,” said Shamsul Alam, a member of the commission.
In last five years, the country’s GDP growth rate has hovered around about 6.2% on an average.
The government set a target of 7.3% growth for the current fiscal year. Last fiscal the economy grew at 6.01%.
The Finance Division report states: “If the negative inflow of remittances continues, it will put pressure on the balance of payments over which the government has been in comfort since it assumed power second time.”
According to it, the budget was implemented at 6.85% rate in the July-September period while the government’s bank borrowing amounted to Tk9,203 crore.
Despite huge government bank borrowing, the government took loan of Tk6,821 crore from the saving instruments in the period, it said.
ADP implementation rate was only 9% compared to 11% in the same quarter last year.
The total revenue earning of the government was Tk34,785 crore while the NBR collected Tk27,151 crore in the first three months.
The report said the state-owned banks and private commercial banks collected money at a rate of 6-8% but provided loans at 16% interest rate.
In October this year, the overall export earnings declined by 7.7% to almost $2bn compared to $2.2bn in the same month a year earlier, according to the Export Promotion Bureau data.
The figure is nearly 20% lower than the target of $2.5bn for the month.
