The budget for the fiscal year 2024-25 has been presented by the new Finance Minister of the newly elected government, marking the last budget of the Eight Five Year Plan (8FYP) of Bangladesh. This budget comes at a time of significant economic challenges, including subdued revenue mobilization, high government borrowing, tightened liquidity in banks, and elevated prices of essential goods.
The immediate focus of the economy is on taming inflation and improving foreign exchange reserves. The government aims to restore macroeconomic stability and prioritize economic stability over growth for the time being.
The Centre for Policy Dialogue (CPD) has assessed various proposals in the budget for FY25 in the context of ongoing economic challenges. The budget sets a GDP growth target of 6.8%, with a focus on increasing private investment and improving productivity.
Inflation is projected to fall to 6.5% in FY25, while export and import growth targets have been set at 8% and 10% respectively. Remittance is expected to grow by 7% in the next fiscal year.
The budget also outlines a broad fiscal framework for FY25, with a focus on revenue mobilization and public expenditure. The budget deficit is projected at 4.6% of GDP, with a significant share of foreign loans and grants to finance the deficit.
Overall, the targets set for the macroeconomic framework for FY25 are seen as optimistic and may not fully address the current economic realities. The budget also highlights areas of high spending and the need for domestic financing to support key sectors.
The analysis of the national budget for FY2024-25 by the CPD provides valuable insights into the economic challenges and opportunities facing Bangladesh in the coming fiscal year.