Economists wary about finance minister’s 6pc inflation target for FY24

Finance minister AHM Mustafa Kamal's target of containing the rate of inflation at 6 per cent in the upcoming fiscal year is being described as ambitious by some economists, reports UNB.

The finance minister announced the target in the budget proposals for FY23-24 placed at the parliament on Thursday.

The existing rate of inflation in the country has soared to over 9 per cent.

Executive director of SANEM Selim Raihan said, "The government gave the promise to tackle inflation at 5.5 per cent in the current fiscal year 2022-23. But we have not seen any such policies by the government to keep inflation in check at such a level."

"We have witnessed no significant initiatives from the government in terms of currency policy, duty tax policy, or market management policy, which could have contributed to controlling inflation," he said.

Instead, the inflation rate has determinedly floated around 8-9 per cent for an extended period. This prolonged high inflation has excessively burdened the underprivileged and needy segments of society, while the rich may have remained relatively unaffected, he said.

Senior research fellow of CPD Tawfiqul Islam also echoed the same opinion.

He said inflation cannot be reduced while measures are not taken to bring down consumption and increase the policy rate.

The initiative of withdrawing the interest cap and curbing the money flow is needed. But in the budget such policy remained absent, he said.