Bangladesh hikes spending 19 percent in 2012/13 budget

DHAKA, June 7 Thu Jun 7, 2012 4:05pm IST

DHAKA, June 7 (Reuters) - Bangladesh will increase spending nearly 19 percent to 1.9 trillion taka ($24 billion) in its budget for the coming year, the finance minister said on Thursday, as it aims to ramp up economic growth to 7.2 percent.

The government also aims to cap its deficit at 5 percent of gross domestic product in the fiscal year 2012/13 starting in July, down from a revised 5.1 pct of GDP in 2011/12, Abul Maal Abdul Muhith told parliament while presenting the budget.

To help offset the spending increase, Dhaka is targeting a 22 percent rise in tax revenue to 1.4 trillion taka, largely due to improvements in tax collection and crackdowns on evasion.

The Bureau of Statistics has revised the country's economic growth target for the outgoing fiscal year to 6.3 percent, backtracking on the government's earlier projection of 7 percent.

Analysts said that the penultimate budget for Prime Minister Sheikh Hasina's government would be challenging under the shadow of a prolonged global downturn, slowing investment, high inflation and a ballooning subsidy bill.

The budget will ramp up social spending by providing subsidised grain to more of the country's poor and creating more jobs, promising some relief to those hit hardest by high inflation, but sparking worries about its huge cost.

The 7.2 percent growth target, if attained, would be the highest for the impoverished South Asian country since 1973-74, when the economy grew 9.59 percent. (Reporting by Ruma Paul; Editing by Anis Ahmed)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Monetary Policy

REUTERS SHOWCASE

Monetary Policy

Monetary Policy

Fed renews zero rate pledge, but hints at steeper rate hike path.  Full Article 

Eyeing Stocks

Eyeing Stocks

Interview - EPFO chief urges green light to buy stocks  Full Article 

Stimulus Reports

Stimulus Reports

China cenbank injects $81 bln into major banks to support economy - reports  Full Article 

Ranbaxy Investigation

Ranbaxy Investigation

Ranbaxy says U.S. authorities seek information on pricing data.  Full Article 

E-Commerce

E-Commerce

Tiger Global leads $60 million investment in Quikr.  Full Article 

Monsoon Update

Monsoon Update

Delayed retreat of monsoon rains to start this weekend  Full Article 

Financing Deal

Financing Deal

IndiGo agrees $2.6 billion aircraft finance deal with China's ICBC  Full Article 

Grim Outlook

Grim Outlook

Sony deepens loss estimate on struggling smartphone business  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage