Economists at a discussion on Thursday called for a harmonised policy to address inflation control and maintain growth for a sustainable economy.

They termed the proposed budget “ full of good intentions but has low directions”.

They expressed skepticism about the government's target of raising private sector investments to 27.3% of GDP from the current 23% amid challenging economic situations.

The views were expressed at the "Discussion on Proposed Budget for FY 2024-2025" organised by The Research and Policy Integration for Development (RAPID) at the National Press Club in the city.

Dr MA Razzaque, Chairman of RAPID, presented the keynote, which pointed out that in the first 11 month of FY24, the average inflation rate is already 9.73% and food inflation is more than 10%.

The target of reducing the inflation to 6.5% will remain a challenging one considering the possibilities of further depreciation of Taka, continued import control measures, and the overall current macroeconomic situation.

It also said that with the current level of inflation of 10% , how it could be possible to achieve the high growth rate set for FY 25 at 6.75%.

The paper also termed the 27.3% private investment-GDP target with the current average of 14.5% bank lending rates as unrealistic.

And is it possible to raise the investment by 4.0 percentage points just in a year, Dr Razzaque questioned.

It pointed out that the foreign reserves have declined to $18.7 billion (as per BPM6 standards) and are expected to be much lower when measured by the net international reserve (NIR) metric.

A challenging revenue collection target of Tk 4.8 trillion for the NBR has been set and the Revenue authority will have to achieve a 37 per cent growth to do so, the paper said.

Despite high inflation, the allocation for Open Market sale (OMS) has been curtailed by 63.5%, said the keynote.

The financial sector exhibits these concerning trends, including rising non-performing loan (NPL) ratios and suboptimal operational efficiency.

There is no direction in the budget about addressing these critical issues.

Prime Minister's Economic Advisor, Moshuiur Rahman, said that inflation is not uniform across sectors, highlighting the importance of food security and advocating for lower or no taxes on unprocessed food to ensure affordable prices for the population.

He said the budget mainly focused on three topics including macroeconomic stability, loan management, and mid-term fiscal planning.

BIDS director general Binayak Sen said the government has taken a policy of adjustment based on global and internal conditions.

He pointed out that collective steps have been taken including exchange rate review, interest rate control withdrawn and fiscal expenditure.

He also expressed his disappointment over the universal pension scheme saying that there was a problem from the demand and supply sides regarding the pension scheme and the government should think about it again.