Finance Adviser Mirza Azizul Islam at a pre-budget consultation with leading economists yesterday said he is satisfied with the country's economic performance and there is no reason for alarm.
The economists attending the consultation, however, identified continuous price increase of food items as the major challenge of the moment saying, "… economic indicators will not feed the people".
Former finance ministers, advisers, finance secretaries, economists and academics were present at the meeting.
Government will have to take effective measures including safety net programmes to mitigate hardship of the mass, caused by the soaring prices of food items, said meeting sources quoting the economists.
Economists also suggested that the government should bring more people under its VGF (vulnerable group feeding) programme with increased rice allocation for each VGF card holder.
Adviser Aziz following the meeting told reporters, "The country's economic performance has not been discouraging so far, even though almost all other countries have revised down their growth forecasts by 0.5 percent to 1.0 percent."
The finance adviser blamed the media for not highlighting the positive indicators of the economy. "Political governments use their own channels to publicise these positive sides of the economy, but we don't have those means," he added.
Illustrating a bright picture of recent economic recovery, Aziz said export growth reached around 10 percent during the July-January period of the current fiscal year, recovering from the negative growth until September 2007. Remittance also grew by 26 percent in July-February period, he added.
The adviser said private sector credit grew by 12.4 percent during the July-January period of FY08, compared to the same period of the previous year.
Aziz went on saying that net agricultural credit during July-February period of FY 08 increased to Tk 1,458 crore, compared to Tk 240 crore during the same period of the previous fiscal.
The net industrial term loan increased to Tk 3,727 crore in July-December 2007 period from Tk 1,730 crore during the same period of the previous fiscal year, he said.
The adviser, however, said imports in capital machinery during July-January period of the current fiscal year were $ 25 million lower compared to the same period of the previous year.
The imports under miscellaneous head share mostly the machinery for small industries, which reflected an increase by $ 99 million during the period, he added.
According to sources at the meeting, a leading economist raised question over the public confidence in government indicators and suggested that the Bangladesh Bureau of Statistics should be turned into an independent organisation so that the people can trust its statistics.
Aziz further told the journalists that the economists attending the meeting suggested that the government should take more diplomatic initiatives to ensure rice import and to contain its spiralling prices.
Economists also suggested revision of the subsidy policy as they think an unsustainable subsidy regime has emerged now.
"The government should boldly face it [subsidy regime]…it will have to look at the present regime, which is just too excess," Aziz quoted economists as saying at the meeting.
He said the last time domestic petroleum prices were adjusted by the government, its international price was $ 62 per barrel. Whereas now, the international price of petroleum has reached as high as $ 110 per barrel and the price of fertilizer has also increased heavily, he added.
Aziz said the economists suggested raising the income tax exemption limit from Tk 1,50,000 to Tk 2,00,000 in the next budget, considering the difficulties faced by the fixed income group due to the price situation.
Replying to a question, the adviser said he has no plan at this stage to invite political leaders to a pre-budget discussion. "It'll not be appropriate for me to invite them before the political dialogue".
The adviser said even though an elected government is likely to assume power in early 2009, he would propose the next budget for the next entire fiscal year.
"It's up to the next government whether they will implement the budget we are going to place or bring changes in it."
The finance adviser said under the Fiscal Responsibility Act, which has been approved in principle by the cabinet, the revised budget of a fiscal year would be placed in March instead of June.
Professor Rehman Sobhan, M Syeduzzaman, M Hafizuddin Khan, Bangladesh Bank Governor Salehuddin Ahmed and Finance Secretary Mohammad Tareq took part in the pre-budget discussion among others.