Private sector investment will be disrupted

Policy Research Institute Executive Director Dr. Ahsan H. Mansoor. He said these things to Jago News while commenting on the proposed budget for the fiscal year 2024-25.

Finance Minister Abul Hasan Mahmud Ali on Thursday (June 6) presented the budget of Tk 7 lakh 93 thousand crore for the financial year 2024-25 in the National Parliament. It has been proposed to take a loan of 1 lakh 37 thousand 500 crores from the bank to meet the budget deficit.

Commenting on the proposed budget, the executive director of the Policy Research Institute. Ahsan H Mansoor said the government presented the budget at a difficult time. Size has been reduced. That’s a good thing. However, there are many challenges in implementation. Due to the large amount of money taken from the banking sector to meet the budget deficit, there will be a huge impact on the currency market. Interest rates may rise at abnormal rates. Further liquidity crunch may emerge.

Ahsan H. Mansoor said that the banking sector is now weak. In such a situation, if the government borrows Tk 137,500 crore from banks to meet the deficit, it will greatly disrupt the flow of credit to the private sector. As a result there will be no investment in the private sector.

However, this economist believes that inflation will come down if the government sticks to its policies. However, due to some measures in the budget, the prices of some products will increase. But it is not for common people. For example, several luxury products including refrigerators have been mentioned.

The proposed budget has announced an increase in social security coverage to give some relief to the poor and low income earners, which is a good thing. But its actual results will depend on proper implementation. He commented that the suffering of the common people will be reduced if they get this allocation properly.