2024-07-29 17:45:44
The Ministry of Finance believes that the high interest rates of the developed countries of the world may affect the reduction of foreign exchange reserves of Bangladesh.
It is believed that if the existing high interest rates in developed countries continue in the future, it may be difficult to increase the country’s foreign exchange reserves. At the same time, high interest rates prevailing in the domestic market may slow down the pace of investment. And this will have a direct impact on the GDP growth of the current financial year. A policy statement made by the Finance Department has mentioned this.
According to sources, 8 major challenges have been identified in the current financial year considering the global and domestic situation. It is also said to determine the necessary strategies to deal with these challenges. The biggest challenge in the country’s economic sector is inflation. It has been said that the current government’s top priority is to control high inflation. To control high inflation, the government has formulated several adjustments in monetary and fiscal policies. Strict monetary and fiscal contraction policies are being adopted. As a result, inflation is expected to come down in the coming days.
Currently, the inflation rate in the country is over 9 percent on a point-to-point basis. The average inflation at the end of the year is 9.6 percent. Meanwhile, according to the forecast of the International Monetary Fund (IMF), the inflation rate of Bangladesh may be 9.3 percent in 2024.
Sources said that in the medium term, the country’s growth is expected to accelerate as a result of controlling inflationary pressures and adopting appropriate monetary and fiscal policies. External variables will also gradually improve in the medium term if inflation comes under control. Continued inflow of emigration income will contribute to the revival of private consumption expenditure and at the same time increase public investment through the implementation of several mega projects of the government. However, the current high interest rates in the domestic market may dampen private investment in the short term. And it will affect the overall economy of the country.
The Finance Department says that the tax-GDP ratio in Bangladesh is not satisfactory. Reforms and new initiatives are being taken to increase the country’s tax collection. Besides, steps have been taken to consolidate some banks with the aim of recovering non-performing loans (NPLs) and restoring order in the financial sector. However, it will take time to reap the benefits of this process.
According to the finance department, Bangladesh’s transition from a less developed country in 2026 will reduce several advantages in international trade. In this context, the government is giving special importance to diversification of exports, increasing production and business environment.
Among the challenges in the economic sector, according to the Finance Department, Bangladesh ranks seventh among the countries most affected by climate change according to the Global Climate Risk Index 2021. In the long term, climate change can cause significant damage to the economy.
According to sources, in this situation, it has become necessary to take proper analysis and necessary steps to assess the possible damage and find ways to deal with the challenges of climate change. Otherwise a big disaster will be faced.