1st quarter performance of FY22-23 budget satisfactory: Finance Minister

The position of basic macroeconomic indexes including revenue collection, remittances, export growth, annual development programme (ADP) expenditure and money supply in the first quarter (July-September) of the running 2022-23 fiscal was satisfactory.

This was stated by Finance Minister AHM Mustafa Kamal on Thursday in a report placed in the House on the progress of the implementation 2022-23 budget in the financial year’s first quarter.

“Revenue collection was done as per the target, positive trend was seen in import and export income, and as a result I am hoping that we will be able to attain our desired target in the current budget,” he said.

He mentioned that the revenue collection registered 19.33 percent in the first quarter which was 18.72 percent in the last fiscal.

The public expenditure was 11.14 percent against 11.90 percent in the same period of 2021-22 fiscal while implementation rate of ADP was 8.55 percent against 8.26 percent.

The finance minister said that due to the increase of import expenditure there was deficit in the current account balance that reduced to USD 36.47 billion in the reserve on September 30, 2022 which was USD 46.22 billion in the same period of 2021.

The growth in the remittances inflow was 4.89 percent against 19.44 percent in the previous 2021-22 fiscal.

The export income growth rate was 13.38 percent against 11.37 percent during the same period of the last fiscal.

“The positive trend of export trading growth will play as important variable in advancing our economy,” he said.

He said that the import expenditure (C&F) increased 11.67 percent which was 47.56 percent in the same time of the last fiscal.

He said that normalisation of economic activities after COVID-19 period and significant rise of import of intermediary and capital machineries led to a huge hike in import expenditure.

“But, currently avoidance of luxury items and exercise of austerity by the government caused a decrease in import expenditure,” he said.

The LC opening during July-September tenure in 2022 was USD 18.58 billion which was 4.57 percent less than the same period of the previous fiscal.

As per the report, annual average inflation was 5.50 percent in September 2021 while it increased 6.96 percent in September 2022. On the other hand, the point-to-point inflation in September 2021 was 5.59 percent, while it increased to 9.10 percent in 2022.

Regarding the budget deficit Mustafa Kamal said that the estimated deficit is 5.51 percent of the GDP. For deficit financing 2.22 percent sill come from external sources while 3.29 percent would be mitigated from domestic sources.  

He said that to contain pressure from inflation, the central bank took the path of contractionary monetary policy.

The minister said that thanks to timely steps from the government it was possible to contain the inflation forced by price hike of fuel oil price and food items due to the Russia-Ukraine War, and depreciation of Taka against US Dollar.