The government has set unrealistic inflation and economic growth targets in the proposed budget for fiscal year 2024-25, said the South Asian Network on Economic Modeling (Sanem) today.

The government has aimed at an inflation goal of 6.5 percent although it averaged more than 9 percent in the past two years.

Along with that, the government is aiming for a gross domestic product (GDP) growth of 6.75 percent for FY25, which is much higher than the provisional estimate of 5.8 percent for the current fiscal year.

"Controlling inflation will be the biggest challenge," said Sayema Haque Bidisha, research director of the think-tank.

She made the comments at the media briefing of "Sanem Budget Review for 2024-25" at the BRAC Centre Inn in Dhaka today.

In order to achieve this growth, the government has targeted to increase the private investment-to-GDP ratio to 27.3 percent in FY25 from 23.5 percent in 2023-24.

Bidisha, a professor of economics at the University of Dhaka, said higher foreign and domestic debts will have a direct impact on inflation.

"Therefore, it is not possible to bring down inflation to the targeted level through the proposed budget."

Selim Raihan, executive director of the Sanem, said market management should be emphasised to control inflation.

"But there are no strict steps in the budget to ensure proper market management."

Given the current economic situation in the country, the budget needed to have a two-year economic recovery plan, said Raihan.

The Sanem also praised the government's decision to increase the highest tax rate from 25 percent to 30 percent, abolish the tax at source on essential commodities, and raise the allocation for the health and social safety net sectors.

Finance Minister Abul Hassan Mahmood Ali placed a Tk 7,97,000 crore budget in parliament on June 6.