In this COVID-19 hit tough times, the national budget for FY2020-21 has been approved on 11 June at a special meeting by the Cabinet. AHM Mustafa Kamal, Finance Minister presented the budget. The size of the total spending has been projected at Tk. 5,68,000 crore, which is 17.9% of GDP.
According to Centre for Policy Dialogue (CPD), the government appears to have prepared the budget under the assumption that the fallout from COVID-19 will be managed in a very short period, and the economy will bounce back in FY21.
CPD says the budget is needed to be more innovative to address the multidimensional challenges presented by the coronavirus crisis.
However, the COVID-19 situation is an evolving one; there are significant uncertainties regarding its duration and extent of the impact, said CPD budget analysis.
Also, COVID-19 has exposed the high cost of weak implementation capacity which CPD has drawn attention to over successive budget presentations, CPD added.
Even before COVID-19 outbreak in Bangladesh during Jul – Feb of FY20, excluding for the remittance flow, major economic indicators of Bangladesh economy exhibited some worrying signals; these include negative export and import growth, low FDI growth, subdued domestic resource mobilization and low utilization of allocated development expenditure and weak balance of payment situation.
It also stressed the need for a realistic estimate of the country’s economic performance as Bangladesh needs to access COVID-19 related funds from international organizations, particularly when the government is expecting to underwrite a large part of the budget deficit from foreign borrowing.
In light of the evolving COVID-19 crisis, the government should be ready, if required, to revisit the budget and undertake necessary corrective measures to reflect the realities on the ground, said CPD.