Economic strife in recent times has led to a downturn in Bangladesh’s GDP growth owing to high inflation, slow growth in the private sector, and minimal growth in remittances. In a bid to reach macroeconomic stability, a national budget of BDT 7,61,785 crore was announced for the fiscal year 2023–24, with the budget comprising 15.2% of the GDP. The GDP growth rate has been targeted to reach 7.5%, while the annual inflation rate is expected to be 6% for FY 2023–24.
Meanwhile, Bangladesh Bank (BB) released a monetary policy statement (MPS) on June 18 with contractionary measures underlining the central bank’s objectives in curbing inflation. Many countries adopted a similar approach, with the United States, India, Thailand, and the European Union successfully managing to curtail their inflation significantly through demand reduction strategies.
As pointed out by economists, restoring macroeconomic stability remains pivotal for Bangladesh to bring some much-needed respite to the economy. Effective approaches to achieving the aforementioned target include the coordination of exchange rate, monetary, and fiscal policies to strengthen exports, curb inflationary pressure, increase tax revenues, and reduce fiscal deficits. With timely measures taken by BB to combat inflation through its contractionary monetary policy, economists and business leaders are hoping that both fiscal and monetary authorities work in tandem to reduce inflation significantly in the country. This will pave the way for Bangladesh to reach macroeconomic stability for future economic prosperity and continue the long journey towards a developed country by 2041.
Md. Shah Jalal
Editor
IDLC Monthly Business Review
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