Published in Dhaka Tribune on Thursday, 6 February 2014.
Budget deficit may rise to 5% of GDP
Asif Showkat Kallol
The indicators are budget deficit, inflation and GDP growth
The present government is going to revise key financial indicators at its first fiscal coordination council meeting today after the economy has suffered shocking losses due to political unrest.
Through the revision, the budget deficit will stand at 5% from 4.5% of gross domestic product (GDP) and inflation at 7.5% from 7%, said an official of Finance Division.
Sources in Planning Commission and National Board of Revenue said the current fiscal year budget will be slashed down by Tk18,000 crore to Tk204,000 crore from Tk222,000 crore.
The GDP growth will also be revised down to 6.5% from 7.2% and inflation target will be raised to 7.5% from 7%.
Annual Development Programme (ADP) will also be cut by Tk11,000 crore from Tk63,000 crore.
Of the amount, TK6,000 crore will be cut from the government fund, TK3,063 crore from foreign assistance and the rest is from the budget for the autonomous bodies.
Meanwhile, NBR plans to reduce revenue collection target by 11.82% or Tk16,000 crore to Tk120,000 crore from Tk136,000 crore.
Dr Shamsul Alam, member of the Planning Commission, said the main challenge of new government is speeding up GDP growth and encouraging investment after the economic losses due to 55 days of hartal and blockade in seven months since July 2013.
The Centre for Policy Dialogue (CPD), an independent think-tank, estimated the economy would grow at 5.6-5.8% this fiscal as the four sectors lost over Tk49,000 crore due to continuous hartals and blockades.
The damages in terms of money were calculated taking into consideration the hartals and blockades in the seven months.