The government is optimistic that the nation's GDP will grow by 6.75% in the fiscal year 2024-25, nearly a percentage point higher than the current year's growth.
Despite a contractionary monetary budget designed to control inflation, this projection reflects confidence in the economy's robustness.
The Bangladesh Bureau of Statistics (BSS) recently predicted a 5.82% GDP growth for this fiscal year, down from the 7.5% initially forecasted in the budget. Consequently, the finance ministry revised the target to 6.5%.
To address inflation, Finance Minister Abul Hassan Mahmood Ali presented a Tk7,97,000 crore national budget for 2024-25 to Parliament today (June 6), after receiving approval from Prime Minister Sheikh Hasina in May.
Interestingly, this year's budget increase is under 8%, which is lower than the usual 10-12% rise, highlighting the contractionary strategy. This marks the country's 54th budget.
Minister Ali expressed confidence that prudent policy measures will help achieve a 6.75% GDP growth in the next fiscal year and 7.25% in the medium term. He also anticipates that the inflation rate will drop to 6.5% next year due to these strategies.
This budget is the first under Prime Minister Sheikh Hasina's government since her third consecutive term began earlier this year. In his first budget presentation, Ali highlighted the momentum in GDP growth due to sound policy decisions. From FY2009-10 to 2022-23, the average growth rate was 6.71%, among the highest globally. The country achieved a record 7.88% growth in FY 2018-19, just before the Covid-19 pandemic.
Bangladesh managed to achieve growth rates of 7.10%, 5.78%, and 5.82% (provisional) in 2021-22, 2022-23, and 2023-24 respectively.
To sustain this growth, the government plans to continue supporting agricultural and industrial production. Key infrastructural projects and strategies to boost export earnings and remittances will also be prioritized.
Loan demand and interest rates will be influenced by credit supply and the banker-customer relationship. To control inflation, steps are being taken to ensure a successful monetary policy, alongside supportive fiscal policies. Programs like the Family Card and OMS will be strengthened to protect the public from high inflation's effects.
