Debt situation may turn tricky from 2032: Economic Association

Bangladesh Economic Association has advised the government to focus on the revenue base forecasting that the repayment of foreign loans taken for mega-projects may weigh down on the country from 2032.

"Bangladesh may slip to the red category from its current green when the country would start debt servicing for 4-5 mega-projects altogether in 2027-28. This means the debt situation may turn tricky," said the association President Abul Barkat on Sunday, adding the situation might worsen in 2032.        

The Bangladesh Economic Association also proposed an alternative budget of Tk20.50 lakh crore on that day for the 2022-23 fiscal year. In the proposal of the budget, the association recommended forming two separate ministries – public transport and research, and innovation and development.    

According to the association, the alternative budget is 3.4 times bigger than the government budget, as it noted 338 recommendations to phase out inequalities in income, wealth, health and education.

Abul Barkat said Bangladesh has now become a country of dangerous income inequality. The main goal of the upcoming budget should be minimising inequality and creating decent jobs.

Barkat, who was the chairman of Janata Bank, said health and education inequalities are also rising apart from burgeoning inequalities in income and wealth. Meanwhile, the pandemic has doubled the number of the poor.  

"Reducing inequality should be the main goal for the next five budgets," he added. The Economic Association president said fundamental structural changes have to be carried out to income and expenditure to this end.

"Secondly, tax burden must not be imposed on the marginal, poor, lower-middle and middle-income people in the budget. There should be focus on social safety and human resource development too."

On rising commodity prices, he said inflation should be kept between 5% to 6%.

"We must create new jobs and ensure fair prices to the producers, while food inflation must not be allowed to get out of hand in any circumstance."