Published in Dhaka Tribune on Wednesday 10 June 2020
Budget FY21: What do economists, experts expect?
There were challenges in the country’s economy, which has aggravated by the outbreak of coronavirus. With the outbreak, economic activities of the country were closed, which would cast a negative impact on the GDP, says another expert.
Centre for Police Dialogue (CPD) Research Director Khondaker Golam Moazzem said: “In the next budget, the biggest weakness and challenge for the country will be resource availability and predictability as the government has to offer more on social safety, health and bailout packages.”
In increasing the revenue, the government can use the fiscal policy to boost domestic demand, while focus should be given on automation on taxation collection systems.
In addition, the government has to take measures to stop all types of tax evasions and illicit financial flows (IFF) and bring back the laundered money, the expert said.
“Beyond the domestic sources, government should seek assistance from the external sources such as World Bank, IMF, and Asian Development Bank (ADB) as Bangladesh currently enjoys a robust debt sustainability index as the public-debt-to-GDP ratio is around 34% and it could afford a couple of additional percentage of fiscal deficit, perhaps up to 7-8% of GDP,” Khondaker said.
On top of that, Bangladesh should take advantage of the decision of the G-20 in regards to providing low income countries with funds at zero or low interest to combat Covid-19 pandemic, as it suggested.