Rejaul Karim Byron

Average inflation in Bangladesh surpassed the government’s target for the just-concluded fiscal year by a large margin as higher prices of goods and services continue to linger for the economic crisis at home and abroad.  

The private sector’s external debt declined by about $2 billion in the first three months of the year, in a sign of the shrinking appetite for foreign loans in the face of unfavourable terms.

State-owned Janata Bank indulged in 31 counts of “serious financial irregularities” from 2015 to 2020 involving Tk 13,110.8 crore, which is 22.85 percent of the lender’s liabilities, found a recent audit.

On June 26, 2013, the state-owned Essential Drugs Company (EDCL) acquired a drug production machine. Let alone use it, the state-owned company did not even unbox it for the next seven years.

The government has suffered losses amounting to Tk 459 crore thanks to irregularities at different public healthcare institutions, found four different compliance audit reports.

For the first time, no one took the opportunity to whiten black money to avail the government’s tax amnesty in the outgoing fiscal year.

Funds deposited by Bangladeshi citizens and banks with Swiss banks dropped 93.7 percent to 55.3 million Swiss francs (CHF) last year on the back of the pressure on the country’s foreign currency reserves.

The government is set to distribute 10 kilograms of rice to each of the 1.25 crore ultra-poor and destitute families ahead of Eid-ul-Azha to soften the blow of a spiralling inflation.

Amid a cost of living crisis, providing cash support to the poor and endeavouring to tame inflation would be the logical actions. But the government is not toeing that line.

The government’s bid to pay off Russia’s dues -- of about $330 million -- for the Rooppur power plant using the Chinese yuan has run into fresh complications after the last round of sanctions by the US on Russia.

The government is set to form the National Pension Authority (NPA) to execute the Universal Pension Scheme formulated to provide pension services for the common people.

About $1 billion in budget support is set to arrive in the next few days from three development partners to help the government meet its deficit financing for this fiscal year.

One of the consequences of years of economic mismanagement is the dramatic depreciation of the taka against the dollar in recent times, and its fallout will spill over into the medium term markedly, said a finance division study.

On paper, Tk 126,272 crore, the amount earmarked for social safety net programmes, looks to be a hefty sum. But the sum flatters to deceive: as much as 60 percent would be going towards those not in dire need.

Finance Minister AHM Mustafa Kamal yesterday said that though he is worried about the elevated level of consumer prices, the situation is still under the government’s control.

Though higher default loans and declining foreign currency reserves have been identified as the biggest risks to the economy of Bangladesh in recent times, Finance Minister AHM Mustafa Kamal yesterday fell short of coming up with any definitive measure to address the twin issues save offering some words of hope. 

The proposed budget for 2023-24 is unrealistic and unattainable as the challenges that caused the economic growth to decelerate, foreign exchange reserves to dip and inflation to surge in the past one year still persist, said economists and think-tanks.  

The government’s foreign debt servicing burden may rise by as much as 45 percent in the next fiscal year due to the devaluation of taka and higher utilisation of foreign loans in recent years.

Says economist Zahid Hussain 

In June last year when Finance Minister AHM Mustafa Kamal placed the budget in parliament, inflation had already been creeping up and the foreign currency reserves were on the decline. These two had derailed the full economic recovery from a two-year crisis wrought by the Covid pandemic.