Economy faces three-pronged challenge, needs calculative risk-taking: Experts

The Bangladesh economy is currently facing three separate challenges, which need to be addressed by calculative risk-taking, experts said at a roundtable in the capital on Saturday.

The challenges are – tackling high inflation, slow economic growth and poor macroeconomic health, they identified at the roundtable, titled "Budget and the challenges for the economy", organised by the Editors Guild.

The growth and private sector investment targets set in the proposed national budget are ambitious as other factors in the economy do not support them, speakers said at the event.

They instead stressed the need for inflation control and calculative risk-taking to solve the gradually built-up problems on the macroeconomic front.

For instance, exports and remittance earnings are under stress, which should be addressed by implementing the announced unified exchange rate to gradually devalue the local currency against the dollar, said Dr Ahsan H Mansur, executive director of the Policy Research Institute.

This would also help recover the country's financial account that went negative for the first time in three decades, he added.

The economy is facing a three-pronged crisis and if the macroeconomic issues are solved to a good extent alongside keeping inflation under control, the economy would come back to a mid and long-term growth trajectory in a sustainable way, said Dr Sayema Haque Bidisha, professor of economics at Dhaka University.

Controlling the nearly 10% inflation should be done through supply-side cost control and tackling market manipulation, said Dr M M Akash, professor of economics at the University of Dhaka.

Economists present at the roundtable said the government should accept the reality of sacrificing growth and focus on the long overdue reforms at the fiscal, monetary and macroeconomic fronts.

Money printing and government borrowing from the central bank are emerging as a big risk in tackling inflation, they added.

They also stressed the need for reforms that would increase the efficiency of the tax authority, and reduce the costs of doing business while solving energy problems for businesses.

Former FBCCI president Mir Nasir Hossain, former BGMEA president Md Siddiqur Rahman, former NBR commissioner Md Abdul Kafi, planning ministry's parliamentary committee member Hafiz Ahmed Mazumder MP, Mutual Trust Bank Managing Director and CEO Syed Mahbubur Rahman spoke at the programme, moderated by Editors Guild executive committee member Rejoin Ul Haq.