The government’s dependence on borrowing to finance national budgets has increased over the past decade as revenue collection has failed to keep pace with the ballooning public expenditure.
The government should target reducing demand through ensuring market-based interest and exchange rates as well as cutting allocation for infrastructure projects to rein in inflation and protect the foreign currency reserves, said economists yesterday.
Bangladesh’s revenue-GDP ratio is a third of the median seen in the countries that have the same credit rating, highlighting the country’s weak capacity to finance development and support growth, according to American credit ratings agency Fitch Ratings.
Bangladesh’s public expenditure is not growing in keeping pace with the steadily expanding economy as it struggles to raise adequate revenues, thus failing to ensure full implementation of development programmes and provide expected services to its citizens.
The private investment-to-GDP ratio in Bangladesh declined in the current fiscal year owing to a lower confidence among investors amid the persisting dollar crisis and global uncertainty, higher inflation and a fall in demand for goods in international markets.
Bangladesh's economy would grow by 6.03 per cent in the current fiscal year of 2022-23, according to the provisional projection of the Bangladesh Bureau of Statistics (BBS).
Agriculture accounts for approximately 13.6 per cent of Bangladesh’s GDP and employs more than 40.6 per cent of the labour force. As technology advances, so do agricultural applications, ushering in a new era of industrial upheaval.
Both the government and private sector should come forward and encourage climate-smart agriculture as well as the production of non-local crops, which have immense possibilities. It would not only increase the productivity of our agriculture sector, but also maintain self-sufficiency and ensure food security in Bangladesh.
The prospective loan programme of the International Monetary Fund will prime Bangladesh for graduation from the least-developed country bracket and reach middle-income country status by 2031, said the lender’s top official.