Mahmood signals dissatisfaction with restrictive policies

Finance Minister Abul Hassan Mahmood Ali said on Saturday there was no denying that restrictive policies aimed at controlling inflation could slow economic growth in the long run.

“While there is a need to adopt restrictive policies to control inflation, it cannot be denied that such an approach could slow down growth in the long run,” he said, addressing Parliament in his concluding speech on the proposed budget for 2024-24. 25 fiscal.

However, he added that to become a developed, prosperous and intelligent Bangladesh by 2041, the country needs continuous high growth.

“In this context, we have set ourselves the goal of developing this budget, which will be a difficult challenge to find a balance between the seemingly contradictory goals of achieving economic stability and maintaining economic growth,” he said.

He expressed great hope that under the able, experienced and wise leadership of the Prime Minister, the government would be able to bridge the gap between resources and opportunities and soon return to the path of high growth.

The Finance Minister said that in the proposed budget, the government has tried to provide necessary resources in the sectors of education, health, agriculture, local government and rural development, energy, communication, science and technology to build a smart Bangladesh.

“In addition, we have attached due importance to ensuring food safety,” he added.

That is why in this year’s draft budget the government has given top priority to ensuring macroeconomic stability and inflation control.

“Monetary policy has already taken various restrictive steps to control inflation; interest rate (repo) was significantly raised to 8.5 percent and bank interest rates were made fully market-based.”

Moreover, he said a “crawling rate” system was introduced in the dollar exchange rate to increase foreign exchange reserves by encouraging exports and accelerating remittances.

“In line with the restrictive monetary policy initiatives, we have also adopted supportive fiscal policies such as fiscal deficit reduction, discouraging non-essential spending and austerity initiatives across sectors.”

The Finance Minister said that as a result of the policy adopted by the government he expects inflation to fall to 6.5 percent in the next budget year.

He said that in the proposed budget, the government has planned to mobilise resources on a priority basis for the development of infrastructure supporting investment and employment.

“As a result of these initiatives, we expect GDP growth to be 6.75% in the next financial year and 7.25% in the medium term.”

He mentioned that the government is also undertaking multi-faceted activities aimed at collecting funds to cover government expenditure.

“We have carefully reviewed the proposals received through discussions with various public and private organizations, business organizations and stakeholders before deciding on the revenue collection policy.”

Mahmood Ali said that in order to maintain the pace of development, the government has adopted various strategies to increase tax collection, including reducing tax evasion, with a focus on increasing the tax-to-GDP ratio.

“We are undertaking various reforms in revenue management to increase revenue in the medium term by addressing existing challenges in revenue collection.”

At the same time, he added that the government is reforming the country’s customs policy, taking into account the reality that will follow its transition from the list of least developed countries in 2026.

“Dependence on import tariffs is being reduced to help reduce anti-export bias.”

The Finance Minister said that Prime Minister Sheikh Hasina, who is the heir to the age-old ideals of the Father of the Nation, is carrying out the unfinished tasks of the Father of the Nation one by one, engaging all the citizens of the country with unwavering conviction after overcoming hundreds of thousands of setbacks.

“Thanks to the hands of the Prime Minister and the path he has indicated, we will achieve the Sustainable Development Goal by 2030 and join the group of high- and middle-income countries by 2031, and by 2041 we will be able to create a developed, rich and smart Bangladesh, Inshallah.”