Bangladesh sees widening budget deficit, amounting to Tk 71.53 billion during the July-November period in an over 62-percent increase year on year, amid lower revenue collection, official statistics show.
The shortfall incurred in the November tally is the first in this fiscal year as it remained in surplus domain up to October last, according to a report of the Ministry of Finance on Thursday.
The total revenue mobilisation was recorded at Tk 1.337 trillion up to November, just over 1.0-percent up from the same period a year earlier. The total expenditure was Tk 1.408 trillion during the same period.
In the official accounting the tax revenue was recorded at about Tk 1.2 trillion or up by 1.8 per cent from the same period a year before.
The non-tax revenue (NTR), however, decreased by nearly 2.0 per cent to Tk 139.79 billion up to November last.
On the other side of the budget arithmetic, the non-development expenditure increased to Tk 1.039 trillion during the July-November period. It was Tk 1.032 trillion during the same period a year earlier.
The annual development programme or ADP expenditure was trimmed to Tk 292.01 billion in a reduction by Tk 4.25 billion from the same period a year earlier.
The government report shows for FY2023 that the actual overall balance up to November 2022 (excluding grants) witnessed a negative value which was 0.16 per cent of the GDP.
Economists are of the view that government finance will face "stress" in the coming months as the revenue performance remained much lower than expected.
They say the government now has been trying to manage the fiscal side by spending less to overcome the revenue shortfall.
They note that the government will have to spend money by avoiding austerity in some areas like payments for power and debt servicing.
Dr Ahsan H. Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), told the FE that ultimately the deficit would cross Tk 1.0 trillion at the end of the fiscal year.
He said some spending like the power-related and debt servicing, both at home and abroad, should be defrayed within the fiscal year. "The power suppliers will not wait for a long time."
Dr M. Masrur Reaz, chairman of the Policy Exchange of Bangladesh, notes that import has now been reduced. As a result, the revenue mobilisation from imports is falling now.
The government also earns revenues from development projects as VAT and others taxes. But many projects funding now remained suspended. "So it will affect the resource mobilisation largely," he says.
He also forecasts that the deficit will widen in the months ahead.
Finance Minister AHM Mustafa Kamal placed a budget worth Tk 6.78 trillion for the current fiscal year. The budget estimated development expenditures at Tk 2.59 trillion and non-development expenditures at Tk 4.11 trillion.