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Finance Minister affirms inflation to decline in coming days

Finance Minister affirms inflation to decline in coming days

Finance Minister Abul Hassan Mahmood Ali affirmed the nation that inflation, which turned out to be one of the major challenges for the government, would come down in the coming days due to the steps and measures taken by the government. He also expressed his high optimism of attaining the targeted 6.75 percent growth in the next fiscal year (FY25). "We've taken all the necessary measures for controlling inflation and we're also considering what kind of steps can be taken more in addition to the existing ones in this regard. Due to the various steps, it has been possible to contain inflation at around 9 percent," he said. The Finance Minister said this while addressing a post budget press conference at the Osmani Memorial Auditorium in the capital on Friday (Jun 7). Earlier on Thursday, the Finance Minister placed a Tk 7,97,000 crore national budget for the coming fiscal with a prime focus on maintaining economic stability and augmenting steps to materialise the government's "Smart Bangladesh" vision, local media reported.

Planning Minister Major General (retd) Abdus Salam, Industries Minister Nurul Majid Mahmud Humayun, Agriculture Minister Md Abdus Shaheed, LGRD Minister Md Tajul Islam, Housing and Public Works Minister RAM Obaidul Muktadir Chowdhury, Education Minister Mohibul Hasan Chowdhury Nowfel, Prime Minister's Economic Affairs Adviser Dr Mashiur Rahman, State Minister for Finance Waseqa Ayesha Khan, State Minister for Commerce Ahsanul Islam Titu, Bangladesh Bank Governor Abdur Rouf Talukder, NBR Chairman Abu Hena Md Rahmatul Muneem, Finance Division Secretary Md Khairuzzaman Mozumder accompanied and assisted the Finance Minister at the press conference. Besides, State Minister for Information and Broadcasting Mohammad A Arafat, secretaries and other senior officials were present at the press conference.

Reminding the audience that the Bangladesh Awami League government was able to contain inflation within two years of the assumption of office in 2009 when the inflation was very high, Ali said, "I want to inform you firmly that inflation will come down in the future due to the various steps taken by the government."

Ali said in a bid to cushion the commoners from the impact of inflation, various operations including OMS and family cards would continue and coverage of those would be widened further considering their necessity. He said since containing inflation is the highest priority of the government, the contractionary policy of the government would continue for a few more days and at the same time the government would remain cautious so that the growth is not affected too much.

Mentioning that all kinds of support would continue to ensure smooth operations of the industry, agriculture and services sector, the Finance Minister said, "Due to such steps, the GDP growth reached 5.82 % in the outgoing fiscal year (FY24) despite contractionary measures and we'll be able to attain 6.75% growth in the next fiscal."

Answering to a question, Ali said hopefully inflation would come down at the end of this year while the government efforts would continue in this regard. "We've kept the budget size not so expanded so that no pressure is put on the common people."

Referring to the budget speech, Prime Minister's Economic Affairs Adviser Dr Mashiur Rahman termed the proposed budget for FY25 as very 'well considered' and 'well balanced' where efforts would be there to contain the growth and at the same time attention would be there so that other sectors of the economy become more strengthened. "The overall budget size and policy directives has been clearly specified in the budget," he added.

About the civil society think tank CPD's concerns over the proposed budget implementation, the Finance Minister said that implementation of budget is a continuous process while liquidity crisis would not persist as it would go away with the passage of time.

He said the crises that the country was going through – like the impact of pandemic and the onslaught of the Russia-Ukraine war – is now gradually declining as the government has been overcoming those. "Bangladesh has never witnessed situation like Sri Lanka and won't witness in future... we're working through a continuous and dynamic model," he added.

Replying to another question, Ali said that there would be more coordination among the various government agencies and departments to enhance the budget implementation capability. He also told another questioner that efforts are on to ensure just tax system.

Asked about the proposed provision for losing the duty free car import by the MPs, Dr Mashiur Rahman said that such provision was introduced for the first time in the country by military ruler HM Ershad. He said the Awami League government as well as the Finance Minister should receive thanks from all concerned for bringing in such provision. Mashiur also mentioned that due to the courage and brave stance from Prime Minister Sheikh Hasina, Bangladesh could have built mega infrastructure like Padma Bridge.

Asked whether alleged corrupt former senior rank public servants could avail the tax amnesty, Dr Mashiur, without mentioning the name of former IGP Benazir Ahmed, said that the ACC has already granted time to him for appearing before it and it is investigating alleged allegations of amassment of wealth by him. He said that the former official (Benazir) will have all rights as the citizen of the country and the country's legal system can address the issue.

Replying to a question on inflation, Education Minister Mohibul Hasan Chowdhury said that when there is growth in an economy, then inflation also occurs. But, the challenge before the government is to contain inflation especially food inflation. He also ruled out the allegation that the country's economy has been squeezed adding that the general inflation has also increased in the sourcing countries from where Bangladesh imports goods.

Mohibul also informed that the projected budget deficit of 4.6 percent of GDP is not so high adding that no country in the world could implement cent percent of the budget. "Considering regional standards, our borrowings is still low and no such situation will arise where Bangladesh will become as a loan-based country or economy," he said.

Responding to a question, State Minister for Finance Waseqa Ayesha Khan said that the increase in the foreign currency reserve has been projected in the next fiscal year not only for introduction of the crawling peg, but also considering the benefits of the offshore banking.

When asked about the proposed provision of whitening undisclosed money through paying 15 percent tax, the NBR chairman said that whenever such scope is given, then critics come up with various criticisms. But, he said that the taxpayers often could not show their undisclosed money and wealth due to various reasons like -callousness, ignorance, or filing returns through others adding that undisclosed wealth often creates difficulties in selling/buying of land.

Muneem said that the demand for incorporating such provision of whitening black money has come from the business community and also from the commoners to ensure compliance in audit.

He said those who have undisclosed money or wealth could not bring it to the mainstream of economy. Rather, they often use those (money or wealth) for lavish products or siphon those abroad. The scope has been given to show such money or wealth in the income tax returns, Muneem added.

Replying to another question, he said the NBR could not calculate the size of the black money, rather other organization of the government could take such stride.

The NBR Chairman said that the government would have to come out of the trend of tax exemptions since it (government) would have to generate more revenues to meet up the expenditure.

Finance Division Secretary Md Khairuzzaman Mozumder said although there is equity mismatch in the capital market, but the government has been working on green bond financing and developing long-term bond market.

He said that the overall exchange rate devaluation of around 27 percent has put an impact on inflation while the government's high priority now is to address inflation.

Mozumder said that the interest rate has been made 8.5 percent and this is very important for controlling the inflation. "Considering these, we've kept the target of containing inflation at 6.5%."