Budget 2024: Key points at a glance

The Bangladesh government has set out an ambitious plan ahead of the upcoming general election

News Desk
Published : 1 June 2023, 10:35 AM
Updated : 1 June 2023, 10:35 AM

Bangladesh has set out an ambitious budget of nearly Tk 7.61 trillion for the 2023-24 fiscal year, boosting its spending by 15 per cent over the revised outlay for the previous year.

Finance Minister AHM Mustafa Kamal presented an expansionary budget pushing for the development of a ‘Smart Bangladesh’ in parliament on Thursday.

Development once again took centre stage with an allocation of Tk 2.78 trillion – a 15 per cent jump from the revised budget for FY23. Of this amount, Tk 2.63 trillion will go to the Annual Development Programme, or ADP.

The government will spend Tk 4.75 trillion on operating expenditure, a 14.72 per cent hike from the revised budget for the outgoing fiscal year.

The finance minister set the National Board of Revenue’s tax collection target at Tk 4.30 trillion, a 16 per cent rise from the revised budget. This covers approximately 56.44 per cent of total expenditure. The budget says revenue will account for Tk 5.04 billion of expenditure.

This leaves the government with a record fiscal deficit of Tk 2.61 trillion, or 5.2 per cent of total GDP. Typically, the government attempts to keep the deficit within 5 per cent of total GDP, but the need to inject money into the economy has meant the guideline was not followed in the past few years.

Kamal aims to raise Tk 1.02 trillion of the deficit from international lenders and Tk 1.55 trillion from domestic lenders, including a record of Tk 1.32 trillion borrowed from Bangladesh’s banking sector.

The budget set out an ambitious growth target of 7.5 per cent for FY24. Though the government had set the same target for FY23, its most recent estimate suggests that GDP growth for this period will only hit 6.03 per cent.

The government also set an optimistic inflation target of 6 per cent for FY24. However, consumer prices have hovered at 9 per cent inflation for 10 months of the outgoing fiscal year.