STAR BUSINESS REPORT

The country is going through a difficult period due to both domestic and global shocks, and the upcoming national budget must respond to those mounting economic pressures while pushing through essential reforms, according to economists and business leaders.

Since confidence is weakening among both investors and the general public, they say expectations for the new budget are to bring relief rather than be overly ambitious.

At a pre-budget roundtable at Pan Pacific Sonargaon Dhaka yesterday, economist Hossain Zillur Rahman said the next budget will have to address four key challenges: fragile business confidence, financial sector weakness, volatility in energy supply and weak budget implementation capacity.

Speaking at the event organised by Prothom Alo, Rahman, the executive chairman of Power and Participation Research Centre (PPRC), said Bangladesh is facing a prolonged period of economic strain and therefore needs a practical, implementable budget for the next fiscal year.

Rahman, who was an adviser of the caretaker government, also called for a special action framework involving stakeholders from different sectors, rather than relying solely on the bureaucracy, to address the crisis and help stabilise the economy within the next two years.

He said the plan should be strictly time-bound. Earlier initiatives such as the Delta Plan had failed to deliver due to implementation delays.

The economist also pointed to inefficiencies in public spending, especially in the health and education sectors. While allocations remain high, he said, weak execution has limited results.

Rahman urged the government to prioritise an implementable budget over a popular one.

He said sluggish investment is another major concern. Although the finance minister is operating under difficult circumstances, the problem still can be solved.

He further said the misuse of public resources continues in different forms. “Sometimes direct looting is taking place. Secondly, corruption is taking place through policy tools such as over-invoicing and under-invoicing.”

He also talked about administrative harassment and described it as remnants of the “licence raj”, saying such practices continue to enable corruption.

Shawkat Hossain, head of online at Prothom Alo, moderated the roundtable, while Editor Matiur Rahman was also present.

At the programme, Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD), said expectations from the newly elected government are high.

He said the upcoming budget would have to strike a careful balance between public expectations and economic realities.

But it would not be realistic to expect too much from the finance minister, given that current challenges are caused by both domestic pressures and global economic uncertainty, said Bhattacharya.

He said controlling inflation should be a key priority in the next budget, alongside addressing pressures in the foreign exchange market and high interest rates.

He also noted that a budget deficit of around 4 percent would be acceptable.

Bhattacharya added that fiscal space does exist, pointing out that tax exemptions and subsidies currently amount to around 6 percent of GDP.

He cited tax exemptions of about Tk 25,000 crore and subsidies of Tk 4,646 crore in various sectors.

The economist also suggested offloading shares of publicly listed companies in the stock market to improve efficiency and broaden participation.