Inflation to reach bearable level by end of FY: Finance minister

Finance Minister AHM Mustafa Kamal has expressed hope that the current pressure of inflation will come down to a bearable level by the end of the current fiscal year as the prices of fuel oil and LNG are falling in the international market.

The foreign exchange reserves will also return to a strong position as before due to taking steps to discourage imports of unnecessary and luxury goods, said the finance minister in the budget implementation progress report for the first quarter of the current financial year presented to parliament yesterday.

In the report, the minister said despite the rapid economic recovery from Covid-19 fallouts, increase in the prices of various consumer goods – oil, gas and food products including wheat, edible oil – due to the ongoing Russia-Ukraine war, inflation has arisen in developed countries and various adverse effects are being observed in the global economy, from which Bangladesh is not free.

"However, I am hopeful that the country will be able to move forward in the macroeconomic area by dealing with all these adverse conditions," said the finance minister.

Stating that revenue collection will increase at the expected rate in the current fiscal year, Mustafa Kamal said the government is trying to reduce the level of defaulted loans in the financial sector, protect depositors' interests and achieve the desired economic growth by maintaining the investment trend by increasing the flow of credit to the private sector in order.

He further said due to various regulatory measures on the import of non-essential and luxury goods and the government's austerity measures, the amount of imports will decrease significantly from the second quarter of the current fiscal year. This will also reduce the current account deficit.

Highlighting the economic situation of the first quarter of the current fiscal year, the minister said there is full scope for optimism. Compared to the same period of the previous year, there has been an increase in revenue and government expenditure in the July-September quarter. While the growth in export earnings increased, the growth in import expenditure has decreased. Implementation of the mega projects is also progressing.

Presenting himself as a "very optimistic person", he said, "The inherent strength of our economy and the practical steps taken by the government in view of the various global and internal shocks will make it possible to achieve the expected goals of the economy."