Roundup: Bangladesh unveils 42.58 bln USD national budget for fiscal year 2016-17

The Bangladeshi government has unveiled a record 3.41 trillion-taka (about 42.58 billion U.S. dollars) proposed national budget targeting an economic growth of 7.2 percent for the next 2016-17 fiscal year starting in July.

The country's Finance Minister AMA Muhith on Thursday placed before the parliament the eighth annual budget of Prime Minister Sheikh Hasina's ruling Bangladesh Awami League (AL) party government since 2009.

In his budget speech, Muhith said, "Thanks to our relentless efforts, real GDP growth this fiscal year is going to reach the seven percent mark finally surpassing the six percent growth trajectory. Not only that, despite global economic adversities, Bangladesh has made remarkable strides towards socio-economic progress during the last seven years."

"Side by side, our position has been further reinforced in terms of many social indicators including poverty, inequality, women empowerment, sanitation, maternal and child mortality rates, average life expectancy, population growth rate and education."

With increase in per capita GDP, the minister said poverty declined significantly during this period.

"At the same time, we achieved enviable progress in many social indicators. Especially, in terms of human development index, we are now at par with the countries having per capita income twice as big as ours. As a result of stable economic growth, Bangladesh has graduated to the status of lower middle income country. "

Muhith said the total outlay of the proposed budget for the next fiscal year 2016-17 (July 2016-June 2017) is 3,406.05 billion taka, up by nearly 16 percent over that of the original budget of the outgoing fiscal year 2015-16 (July 2015-June 2016).

"Total expenditure for 2016-17 fiscal year has been estimated at 3406.05 billion taka (17.4 percent of GDP)."

According to the proposal, the overall budget deficit will be 978.53 billion taka, which is 5 percent of GDP.

Of this amount, 363.05 billion taka (1.9 percent of GDP) will be financed from external sources and 615.48 billion taka (3.1 percent of GDP) from domestic sources.

Muhith said the total estimated revenue will be 2.43 trillion taka.

On the expenditure side, he said the size of Annual Development Program (ADP) for the next fiscal year will be 1,107 billion taka with human resources, agriculture, transport, power and physical infrastructure sectors getting the biggest chunk of money.

"In the ADP of FY 2016-17, I propose to allocate 24.6 percent of development outlay to the human resource sector, 24.5 percent to overall agricultural sector, 13.5 percent to power and energy sector, 25.8 percent to communication sector and 11.6 percent to other sectors."

"Poverty reduction is the core objective of all the initiatives we take for socio-economic development. For this purpose, all our efforts were concentrated on stimulating domestic demand. Initial boost in domestic demand came from growth in agriculture. Keeping pace with this phenomenon, we endeavored to augment the growth rates of supply of goods and services. Finally, we have been able to come out of 6 percent growth cycle," he said.

GDP growth is expected to edge up to 7.05 percent this fiscal year, Muhith said and added per capita income is expected to increase to 1,466 U.S. dollars.

"Gradual fall in inflation coupled with increase in real wages and foreign remittances will boost individual consumption spending. Over and above, political stability is expected to continue. Taking all these into consideration, we have set GDP target at 7.2 percent for the next fiscal year."

Prospects of persistent agricultural growth and improvement in domestic distribution system will help contain food inflation at a tolerable level, he said.

In addition, he said: "In terms of macroeconomic management, we will ensure continued harmonization of fiscal and monetary policies."

In this context, inflation target is set at 5.8 percent for the next the fiscal year.

He, however, expressed the hope that inflation will likely remain within the target of 6.2 percent by the end of this fiscal year.

"Given the positive economic prospects in export destinations, particularly in the USA and Europe, our export income will increase, "said the minister.

Moreover, he said there will be an upswing in foreign remittance inflows on account of recent increase in overseas employment.

Leaders of Hasina's AL-led 14-Party Coalition hailed the national budget 2016-17, also terming it a pro-people one that will help boost development in the country.

They claimed that the budget will fulfill the government's dream to place the country within the middle-income bracket by 2021 and the developed bracket by 2041. Endit