Macroeconomic indicators such as growth, investment, inflation, exchange rate and foreign exchange reserves are not consistent in the proposed budget for the upcoming financial year, said The Centre for Policy Dialogue (CPD).
"Financial structure and the income and expenditure targets set in the budget to restore economic stability are not in line with reality," said CPD Executive Director Dr Fahmida Khatun at an event titled "CPD Budget Dialogue 2024" organised in a hotel in the capital on Wednesday (12 June).
"There is no adequate allocation in education, health and social infrastructure sectors for the development of human resources in addition to tax benefits to protect the poor people from the impact of inflation by increasing employment through investment," she added.
Presenting the main article at the ceremony, Dr Fahmida Khatun said, "In view of the decline of various indicators of the overall economy for the last two years, the issue of reducing inflation and trying to maintain foreign currency reserves should be kept at the top of priority in the upcoming fiscal year, but it is not reflected in the proposed budget."
"To achieve the target of 6.75% GDP growth set for the upcoming financial year's budget, private sector investment should be increased to 27.6% of GDP. In the current financial year, the private investment target of 27.4% of GDP has been reduced to 23.5%," she added.
Stating that private investment has been stuck at 23-24% of GDP for more than a decade, the economist said, "It is incomprehensible how investment can grow so much in a year."
"Target of 15% growth in credit flow to the private sector in the current fiscal year has been reduced to 10% In the next fiscal year, it has been further reduced to 9%. It will not be possible to increase investment by reducing the flow of credit," she added.
The eminent economist also said that it will not be possible to bring down the inflation from close to 10% for more than two years to 6.5%.
"To reduce inflation, contractionary initiatives have been taken in the money supply, but this has not been reflected in the fiscal policy. Again, no steps have been announced in the budget to improve market management," said Dr Fahmida, adding that it will be difficult to bring down inflation altogether.
At the same time, she also said, amid a slowdown in exports and remittances, the target has been set to increase the gross foreign exchange reserves from $24.2 billion to $32 billion in the next financial year.
On the other hand, the target has been set to bring down the dollar exchange rate from Tk117.7 to Tk114.
She also said that strengthening the currency would have a negative impact on exports, remittances and reserves.
Commenting that it will be impossible to meet the revenue collection target of Tk5,41,000 crore in the upcoming financial year, she said, "The collection target for the upcoming year has been increased by 13.2% over the revised target of the current fiscal year."
If 53.7% of the proposed budget deficit is collected from banks, private sector investment will be hindered, Dr Fahmdia Khatun said.
The CPD executive director said although the budget has given the highest importance to education, health, agriculture, local government, rural development, electricity, communication and science and technology, there has not been much improvement in the actual budget in the local government, rural development, education and health sectors.
She said that by adding the cost of the Rooppur nuclear power plant, a large allocation has been shown to the education and technology sector. The social infrastructure sector has not received enough importance in the budget.
Among 38 LDCs, Bangladesh is in the third position from the bottom in terms of allocation for education, although the position of Bangladesh is at the top among all these countries in terms of per capita income, she added.
Stating that the budget did not reflect the actual reality, she said, "It was not done considering the poor people."
CPD Board of Trustee Treasurer Syed Manzur Elahi presided over the function.
Deputy Leader of Opposition in the National Assembly Barrister Anisul Islam Mahmud, Former Planning Minister M A Mannan, Executive Chairman of the Power and Participation Research Center (PPRC) Dr Hossain Zillur Rahman, CAMPE Executive Director Rasheda K Choudhury, Banik Barta Editor Dewan Hanif Mahmud, Editor among others spoke at the vent.
