The Centre for Policy Dialogue (CPD) yesterday came up with a series of lessons learnt from the outgoing fiscal year to help tame the macroeconomic tensions arising from soaring inflation and borrowing costs and a falling exchange rate.
The think-tank said the economy performed relatively better in fiscal 2010-11, but asked the government not to be oblivious to the increasingly visible fault-lines in the macroeconomic fundamentals.
The lessons are about rebalancing domestic demand, inclusive growth, inflation mitigation effort, revenue generation, energy and power supply, subsidy, capital market, financial sector, financing investment, financing imports, exchange rate, development administration and quality of macroeconomic management.
“We need to internalise the lessons to be learnt from the experience of FY2010-11 for an improved macroeconomic management and higher growth next year,” Dr Debapriya Bhattacharya, distinguished fellow of CPD, told reporters while launching a report on the state of the Bangladesh economy for 2010-11.
Prof Mustafizur Rahman, executive director of CPD, chaired the programme at the CPD office in Dhaka.
The think-tank advised the government to continue its support to crop sector, rural non-farm activities, disbursement of microcredit and pursue policy for greater regional and sub-regional integration to boost domestic demand.
The government estimated 6.7 percent gross domestic product (GDP) growth for the outgoing fiscal year due to an incremental contribution by agriculture and industry that promote rural income and create employment.
“While targeting higher level of GDP growth in FY12, we should also remain mindful about the inclusiveness of that growth and its implications for poverty alleviation and equity,” said the report.
The government must intensify efforts to maintain and improve purchasing power of the lower and middle-income group amid the soaring inflation rate, which will continue to remain high in the next fiscal year, CPD suggested.
The National Board of Revenue has done an excellent job in collecting direct and indirect taxes in the outgoing year; yet it is not enough for the exchequer to meet growing spending demand, according to CPD.
“The government will have to more effectively tap the non-NBR tax and non-tax sources to replenish the resource basket,” it said.
The expected relief from energy and power shortage would not be over as the expensive and supposedly 'quick' rental sources got delayed.
CPD said, without a quick gas exploration and coal extraction, the development of the power sector would not get expected momentum.
On the subsidies, the think-tank said, though it is an essential, the growing demand may weaken the macroeconomic fundamentals. Subsidy payments accounted for around 4 percent of GDP in the current fiscal year and it is expected to rise next year.
“The government should make a critical assessment of the actual impact of subsidies and explore opportunities for rationalisation,” the organisation said.
The think-tank said the economy performed relatively better in fiscal 2010-11, but asked the government not to be oblivious to the increasingly visible fault-lines in the macroeconomic fundamentals.
The lessons are about rebalancing domestic demand, inclusive growth, inflation mitigation effort, revenue generation, energy and power supply, subsidy, capital market, financial sector, financing investment, financing imports, exchange rate, development administration and quality of macroeconomic management.
“We need to internalise the lessons to be learnt from the experience of FY2010-11 for an improved macroeconomic management and higher growth next year,” Dr Debapriya Bhattacharya, distinguished fellow of CPD, told reporters while launching a report on the state of the Bangladesh economy for 2010-11.
Prof Mustafizur Rahman, executive director of CPD, chaired the programme at the CPD office in Dhaka.
The think-tank advised the government to continue its support to crop sector, rural non-farm activities, disbursement of microcredit and pursue policy for greater regional and sub-regional integration to boost domestic demand.
The government estimated 6.7 percent gross domestic product (GDP) growth for the outgoing fiscal year due to an incremental contribution by agriculture and industry that promote rural income and create employment.
“While targeting higher level of GDP growth in FY12, we should also remain mindful about the inclusiveness of that growth and its implications for poverty alleviation and equity,” said the report.
The government must intensify efforts to maintain and improve purchasing power of the lower and middle-income group amid the soaring inflation rate, which will continue to remain high in the next fiscal year, CPD suggested.
The National Board of Revenue has done an excellent job in collecting direct and indirect taxes in the outgoing year; yet it is not enough for the exchequer to meet growing spending demand, according to CPD.
“The government will have to more effectively tap the non-NBR tax and non-tax sources to replenish the resource basket,” it said.
The expected relief from energy and power shortage would not be over as the expensive and supposedly 'quick' rental sources got delayed.
CPD said, without a quick gas exploration and coal extraction, the development of the power sector would not get expected momentum.
On the subsidies, the think-tank said, though it is an essential, the growing demand may weaken the macroeconomic fundamentals. Subsidy payments accounted for around 4 percent of GDP in the current fiscal year and it is expected to rise next year.
“The government should make a critical assessment of the actual impact of subsidies and explore opportunities for rationalisation,” the organisation said.