Editorial, News & commercial office:
55/A, H M Siddique Mansion (Level-7), Purana Paltan, Motijhel C/A, Dhaka-1000. Phone: +8802226640056,
e-mail: [email protected], [email protected]
The Centre for Policy Dialogue (CPD) has stressed the need to restore confidence in the private sector to achieve the targets set in the proposed budget for fiscal year 2026-27 amid high inflation, energy shortages, weak investment and pressure on the banking sector.
CPD Executive Director Fahmida Khatun made the remarks at a press conference titled “National Budget 2026-27: CPD Review” at a hotel in Gulshan on Thursday. CPD Distinguished Fellow Mustafizur Rahman also attended the event.
Fahmida said private sector investment continues to follow a downward trend, reflecting reluctance among investors and a lack of confidence in the economy.
“To achieve the budget targets, we must restore confidence in the private sector,” she said.
She noted that the government has projected private sector credit growth at 9.4% in the new fiscal year. However, the growth rate stood at only 4.75% until April of the current fiscal year, highlighting the weakness in investment activity.
CPD said persistently high inflation has placed significant pressure on the economy for nearly four years. While the government aims to reduce inflation to 7.5%, the think tank believes authorities must take realistic and effective measures to achieve that goal.
Fahmida called for a pragmatic monetary policy and urged policymakers to continue the contractionary monetary stance for some time.
She also emphasised the need to ensure a stable food supply, particularly rice, and address the country's energy challenges.
According to CPD's analysis, almost all major macroeconomic indicators remain under pressure despite modest improvements in remittance inflows and foreign exchange reserves.
Fahmida questioned the feasibility of achieving the projected 6.5% GDP growth target when official estimates indicate growth of just over 4% in the current fiscal year.
She also expressed concern about budget implementation, saying the government's ability to execute such a large budget remains a major challenge.
CPD's review highlighted delays in implementing the Annual Development Programme (ADP) and the growing tendency to extend project deadlines. The organisation said many projects fail to meet completion schedules, leading to higher costs and lower effectiveness.
It also noted that weak implementation capacity prevents many projects from delivering the expected results despite receiving budget allocations.
The think tank warned that increased government borrowing from the banking sector could reduce credit flow to businesses and further discourage private investment.
Fahmida said development spending remains important for expanding economic activity, but the government must clearly outline its strategy for increasing revenue collection.
She also stressed the need to ensure transparency and good governance in the use of foreign loans, warning that debt pressures could intensify in the future without stronger oversight.
According to CPD, the proposed budget prioritises human development, private sector-led growth and social protection. However, the organisation said restoring confidence in the economy, particularly among investors, remains the key to achieving those objectives.
https://thedailyexpress.news/news/business/1f166efd-7d28-6130-a49f-1000affdad6f