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The government should focus on long-term macroeconomic stability instead of growth, prioritise public expenditure but not curtailing social safety net programmes along with taming inflation in the coming budget fiscal year 2024-25, said the Center for Policy Dialogue (CPD) on Sunday.
“The priority should be given to overall macroeconomic stability, rather than focusing on high growth target in the coming budget,” said Golam Moazzem, research director of CPD while speaking at a media briefing.
Speaking at the CPD office in city, he said ongoing macroeconomic instability and consequent policy adjustments, largely influenced by the IMF conditionalities, surely affected the country's economic growth prospects
“In this context, the debate concerning the trade-off between economic growth and macroeconomic stability has once again come to the fore,” he said.
CPD organised the event as part of its Independent Review of Bangladesh’s Development (IRBD) programme, the Centre for Policy Dialogue (CPD)’s interim review of the national economy towards the end of every fiscal year.
Accordingly, the third interim review of Bangladesh’s macroeconomic performance for FY2023-24 has been undertaken.
The independent think tank stated that the Bangladesh economy is currently under significant strain due to several ongoing challenges, making the restoration of macroeconomic stability the primary focus of the upcoming budget.
The think tank also recommended that policymakers implement concrete measures to provide relief to inflation-affected individuals with limited incomes.
The CPD observed that the performance of the Bangladesh economy in the first 10 months of FY24 suggests that the remaining months will continue to face ongoing challenges, despite some positive policy measures initiated by the Bangladesh Bank.
"This is because policy outcomes take time to materialize. Moreover, the effectiveness of any policy also relies on complementary measures in other areas," the CPD added.
He said in Bangladesh, it is a matter of regret that it has become customary to set targets concerning the macroeconomic framework that are not consistent with ongoing realities.
For FY24, the government initially targeted a GDP growth of 7.5 per cent despite existing distresses in the macroeconomic scenario,” he said adding that the government shouldn’t repeat the same in 2024-25.