The government on Thursday decided to cut growth projection in gross domestic product to 6.75 per cent and made an upward revision of inflation to 6.5 per cent in the current financial year of FY24.
The decisions were taken at a virtual meeting of the coordination council on budget, macro-economy, and resource management.
Finance minister AHM Musta Kamal presided over the meeting.
Officials attending the meeting said that the coordination council decided to cut GDP growth by 0.75 percentage points from the 7.5 per cent projected by the finance minister while announcing the FY24 national budget.
They said that the government expected better economic activity in the second part of the financial year when the much-talked-about national election would be held.
In October, the World Bank lowered its growth projection for Bangladesh to 5.6 per cent and the International Monetary Fund projected 6 per cent growth in the current fiscal year.
Bangladesh scored 7.1 per cent growth in GDP in 2021–22 but saw the growth rate slow down to 6.03 per cent in 2022–23.
The government has taken $4.7 billion in loan assistance from the IMF to tackle the sharp economic downturn amid a severe shortage of dollars, causing depreciation of local currency, depletion of forex reserves, and inflation.
The average inflation rate in FY23 was 9.02 per cent, the highest since 2011–12, while the monthly inflation rate in the first five months between July and November in the current FY24 was close to 10 per cent.
However, the coordination council, the highest economic body in the country, decided to increase the inflation target by half a percentage point from the projected 6 per cent.
The WB has said that inflation amid the continuous depreciation of local currency will stand at more than 9 per cent in the current FY24.
The devaluation of the taka against the US dollar was 26.1 per cent in the financial year 2022–23, the highest in 46 years.
The officials said that the annual development programme might also be downsized to Tk 2.45 lakh crore from Tk 2.63 lakh crore.
They said that the ADP implementation rate in the first three months of FY 24 was not satisfactory.
Not only the ADP but also other economic indicators like exports, imports, and remittances are in bad condition due to various factors such as political tension at home and geopolitical shifts globally, said the officials.
The officials said that the current national budget might be slashed by Tk 51,000 crore to TK 7.10 lakh crore from Tk 7.61 lakh crore.
They also said the next national budget might be Tk 8.05 lakh crore.
New Age