The Centre for Policy Dialogue on Tuesday said that the partial reforms being pursued by the interim government over the past nine months were less effective in bringing about economic stability.
Releasing the report on its third interim review of Bangladesh鈥檚 macroeconomic performance for the financial year 2024-25 at its office in the capital, the Dhaka-based think-tank also said that whatever reforms of institutions were being carried out they should be comprehensive, encompassing the structural, administrative, and legal aspects of the institutions for the effectiveness of the reforms.
Challenges like inflation, unemployment, and inclusive growth will remain unresolved without comprehensive reform, said CPD executive director Fahmida Khatun as she reviewed the overall public finance, price hike, banking sector, external sector, capital market, and power and energy situations during the past nine months under the interim government that assumed responsibility following the ouster of the Awami League government in the wake of a popular uprising.
The third review has been released just a week ahead of the announcement of the national budget for FY2025-26.
The CPD highlighted the macroeconomic improvement, achieved meanwhile, marked by stability in exchange rate, increasing forex reserve, a good inflow of remittance, and almost a double-digit export growth.
But, it went on to add, elevated inflation, revenue shortfall, unemployment, and sluggish private and private investments will remain as worries in the new financial year.
Apprehending a revenue shortfall of Tk 1.5 lakh crore at the end of the outgoing FY25, the CPD was critical of the proposed dearness allowance to appease the public employees and officials.
An extra Tk 7,000 crore to be required for the proposed dearness allowance will stoke inflation, said the CPD executive director.
The target of pulling down the current elevated inflation to 6.5 per cent in the new financial year looks bleak, said Fahmida, hoping that protests disrupting reform in the revenue administration would be solved soon.
The CPD executive director and others, including distinguished fellow Mustafizur Rahman, also interpreted questions from reporters based mainly on the political and investment uncertainties.
Fahmida observed that an specific date for the next general election should be announced by the interim government after consulting the political parties.
She further observed that polls should not be kept in the timeframe from December 2025 to June 2026 as, she commented, it is the right moment to announce the date because nine months have already gone under the interim government.
Mustafizur Rahman commented that determining a date for the next general election should not be delayed due to the necessary reforms since the polls were not a necessary condition for that.
Focusing on the sluggish investment the economy is witnessing, he said that the reforms carried out in the area over the past nine months proved to be insufficient as uncertainties stemming from the weaknesses in infrastructure facilities, one stop service provision, uninterrupted supply of power and energy still remained.
The CPD executives also highlighted the necessity of political stability, saying that it had always been a key to attracting private investment and revenue mobilisation.
Honest taxpayers will be discouraged if the proposed investment facility of undisclosed money from legal sources will be kept in the new budget, they observed.
They viewed that the new budget should be focused on strengthening institutions, improving governance frameworks, and ensuring transparency and accountability in policy implementation.
