Bangladesh economy could make a ‘turnaround’ if the interim government delivers a quarter of what they are expected to deliver on the economic front this year, says Dr Zahid Hussain, former lead economist at the World Bank’s Dhaka office.
“We’ll be able to ascertain after the next budget (FY26) what on the cards are to get the economy grow faster. If the initiatives on the table are implemented in the short term, then, hopefully, the economy will make a turnaround.”
They promised the beginnings of Bangladesh 2.0, he cites and says in order to streamline the economy, it needs simplifying business regulations and process, ensuring uninterrupted supply of energy, and rescuing the banking sector from its sorry state.
Dr Zahid made the remarks in an interview with BSS at his residence in Dhaka on Thursday.
Asked about the major barriers facing the economy, the eminent economist said there are major drags on or barriers in the financial sector, energy sector, and the obstacles towards investments like business regulations.
In this regard, he appreciated the progress on National Single Window (NSW) which would eventually save time and cost of business through addressing the regulatory complexities in import and export processes.
He suggests the government make sure that the digital process of licensing and certification in import and export operations remains fully functional on the cusp of its transition from manual systems.
Dr Zahid notes the initiative for single window did not become effective over the years for a lack of initiatives, but for the apparent resistance from the NBR….that character remains the same.
“Unless the system becomes fully digital and trustworthy, you’ll have to keep your fingers crossed,” he said, adding that the process is definitely heading in the right direction.
Asked about the revenue-collection pace of the NBR in the current fiscal year (FY25), he said there were no such opportunities in the first quarter (July-September) of the current fiscal since the economy was mostly dysfunctional (amid political upheavals).
“In order to boost the revenue collection, reforms are needed in the NBR, especially in the tax policy and in administration,” he said.
Bangladesh’s revenue collection fell in November even though the country saw improvements in its business climate.
Revenue receipts amounted to Tk 253.6 billion (Tk 25,360 crore) in November, down 8.95 per cent compared to the same month in the previous year, shows provisional data of the NBR.
On top of that, the overall revenue collection declined 2.62 per cent year on year to over Tk 1.3 trillion (Tk 130,185 crore) in the July-November period of the current fiscal year (FY25).
Besides, the tax administrator was Tk 388.3 billion behind its collection target of over Tk 1.69 trillion for the first five months of FY25, with its end goal set at Tk 4.8 trillion for the year.
Dr Zahid notes that the recent step of raising VAT and SD on over 100 products to boost revenue in a speedy manner has ostensibly backfired.
“The move was made apparently to appease the IMF, but now they might also be disappointed since the government is backtracking in some cases,” he says.