Bangladesh’s Finance Ministry Aims to Boost Public Expenditure for Economic Growth
Bangladesh's Finance Ministry is focused on increasing public expenditure to drive sustained economic growth and development within the private sector.
Challenging the Status Quo
Bangladesh's Finance Ministry has its sights set on a bold mission: ramping up public expenditure to ignite lasting growth in the private sector. The ministry's latest official document highlights a glaring disparity in government spending as a percentage of GDP compared to other nations, emphasizing the critical need to ramp up investments. According to data from the World Economic Forum and the IMF, Bangladesh's public expenditure currently stands at a mere 13.1% of its GDP, significantly lagging behind countries like France, Sweden, and India. This stark contrast underscores the immense potential for growth in Bangladesh's fiscal strategy.
- This discrepancy in public expenditure highlights the urgent need for Bangladesh to revamp its investment approach.
Paving the Way for Growth
The government's primary goal is to boost GDP growth and improve living standards, viewing an increase in expenditure as a pivotal step towards achieving these objectives. Supported by ongoing reforms in Public Financial Management, the government has been steadily increasing its spending relative to GDP over time, indicating a positive trajectory. The 'Medium Term Macroeconomic Policy Statement (2023-24 to 2025-26)' outlines the government's strategy to drive inclusive and robust growth, in line with Bangladesh's Vision 2041, the 8th Five Year Plan, and the Sustainable Development Goals (SDGs).
With a focus on priority sectors such as infrastructure, industrial production, food security, job creation, healthcare, and education, the government is gearing up for a transformative phase. To meet the demands of the Fourth Industrial Revolution (4IR), significant allocations have been earmarked for human resource development, particularly in education and skills training. The fiscal projections set public expenditure targets at 15.2% for the upcoming fiscal year, 15.4% for the following year, and 16.2% for the year after that.
Building Towards a Brighter Future
Bangladesh is on a trajectory towards becoming a lower-middle-income country, with aspirations to reach upper-middle-income status by 2031. This aligns with the targets set in the 8th Five Year Plan and underscores the government's commitment to reigniting the rapid economic growth witnessed before the COVID-19 pandemic and the Russia-Ukraine conflict. Despite the global turmoil, the government's response to the pandemic has shown promising results, with efforts focused on restoring pre-pandemic growth levels and promoting inclusive development.
Looking ahead, the Finance Ministry is dedicated to crafting strategies that promote pro-poor growth, attract domestic and international private investment, boost public spending, control inflation, create jobs, and address balance of payment challenges. These objectives reflect a comprehensive approach to not only overcoming recent global hurdles but also laying a strong foundation for sustained development in the long run.
Stay updated with The Business Standard's Google news channel Hi, Ali Rahman in the house! From Chittagong, Bangladesh, I've been on a wild ride from Banskhali Bangabandhu High School to Govt. Alaol College and beyond, landing me at National University. Now, I'm here to dish out the lowdown on national issues and global news. Stick around for a fresh take on what's shaking up our world! Connect With Me