The government is poised to confront a significant revenue deficit in the current fiscal year 2023-2024, with projections indicating a potential shortfall of 82 thousand crore taka. These concerning figures were highlighted by the Center for Policy Dialogue (CPD), which has been closely monitoring revenue collection trends over the past six months.
According to CPD`s analysis, revenue collection has consistently fallen short of targets for the past decade, exacerbating the financial challenges faced by the government. The looming deficit, estimated at 82 thousand crores by the end of the fiscal year, underscores the urgency of addressing fiscal concerns.
Moreover, CPD noted that while the government`s budget deficit has decreased, its reliance on commercial banks to bridge the deficit has escalated. Against a backdrop of soaring inflation, which has surpassed 9 percent for the year, and concerning indicators across the external sector including exports, reserves, expatriate income, and foreign investment, the economic landscape appears fraught with challenges.
These critical observations were articulated during a press conference convened by CPD to discuss the budget proposal for the upcoming financial year 2024-25. The press conference, held at the CPD office in Dhanmondi of the capital on Saturday, saw Executive Director Fahmida Khatun present the key findings, accompanied by contributions from Research Director Mostafizur Rahman, Research Director Khandkar Golam Moazzem, Researcher Muntasir Kamal, and other experts.
Fahmida Khatun, Executive Director of CPD, underscored the adverse economic conditions prevailing as the budget formulation process unfolds. She cited high inflation rates, a liquidity crunch in banks, sluggish budget implementation, dwindling foreign exchange reserves, and subdued export earnings and remittances as primary concerns. Khatun emphasized that these challenges reflect a broader strain on macroeconomic stability, attributed to both domestic and international factors.
CPD emphasized that the country`s economic stability is under threat due to sluggish revenue collection, inflationary pressures, and a shortage of foreign exchange reserves. As policymakers gear up for the next fiscal year, CPD stressed the imperative of implementing reformative measures to restore macroeconomic stability. Addressing these challenges early on in the government`s tenure is deemed crucial for navigating the country`s economic trajectory in the coming years.
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