Inflation, growth targets not realistic: Sanem

The South Asian Network on Economic Modeling (Sanem) claimed that the proposed budget for fiscal year 2024-25 is unrealistic for taming inflation and achieving economic growth targets.

In the budget, the government has set at an inflation goal of 6.5 percent. Sanem cited that the inflation was more than 9 percent in the past two years.

Sayema Haque Bidisha, research director of the think-tank said under the circumstances, controlling inflation will be the biggest challenge. 

She was speaking at the media briefing of "Sanem Budget Review for 2024-25" at the BRAC Centre Inn in Dhaka on Saturday.

Higher foreign and domestic debts will have a direct impact on inflation, said Bidisha, a professor of economics at the University of Dhaka.

And for this, it is quite impossible to bring down inflation to the targeted level through the proposed budget, she added.

Sanem executive director Selim Raihan said market management should be prioritizing to tame inflation.

The provisional gross domestic product (GDP) growth is estimated at 5.8 percent for the current fiscal year.

Sanem said that the government is aiming for a GDP growth of 6.75 percent for FY25 which is not also realistic.

The budget needed to have a two-year economic recovery plan to handle the ongoing current situation, Raihan opined.

The Sanem, however, praised the government's decision to increase the highest tax rate from 25 percent to 30 percent.

Abolishment of the tax at source on essential commodities was also hailed.

It is also positive on the rise of the allocation for the health and social safety net sectors.

On June 6, Finance Minister Abul Hassan Mahmood Ali placed a Tk 7,97,000 crore budget in parliament.