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flexibility during the crisis,” Debapriya said.

The eminent economist made the remark in a paper presented at a media briefing organised to share thoughts on the first budget of the new government at the Centre for Policy Dialogue (CPD) in the capital.

It is now a matter of concern for the government whether economic engagement with economies such as China and Russia will be impeded, he added.

“Now, foreign policy has become linked with the economy. So, we have a geopolitical limitation in front of us.”

Debapriya, a distinguished fellow of CPD, said Bangladesh faces three macroeconomic challenges -- rising power subsidies, higher energy import bills, and increased dollar requirements to pay foreign suppliers.

Surging prices are projected to cause a $4.8 billion rise in annual energy costs, which is 1.1 percent of gross domestic product, widening deficits in the country’s external accounts, he said.

“Increased dollar demand for fuel will further devalue the taka, while regional instability puts pressure on the primary stabiliser of the balance of payments,” he said, adding that the war has put remittance inflows at risk as Gulf countries account for about half of total remittances.

He said the full pass-through of increased energy import costs risks fuelling high inflation, especially food inflation, which will raise poverty, and disparity.

CPD Additional Research Director Towfiqul Islam Khan also spoke at the event.