The government is banking on the strong domestic and external demand for the country's medium-term growth overcoming the COVID-19 pandemic and Russia-Ukraine war's impact on the economy.
"Strong domestic and external demand will be the main driving force of growth in the medium term," according to a budget document.
It mentioned that consumption and investment to increase the domestic demand and exports to increase the external demand will be areas focused on by the government.
As per the document, the goal of the government will be to build improved communications, necessary infrastructure and ensure power and energy security through increased public, private and foreign investment.
"The focus will also be on increasing the productivity of labor to increase export competitiveness," it stated.
On the supply side, the goal of the government is to accelerate the growth of the industrial and service sectors to achieve high GDP growth and employment.
Finance Minister AHM Mustafa Kamal, while delivering his budget speech on June 9, said that he was hopeful that this goal will be achieved through the speedy implementation of the establishment of economic zones.
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"In order to create skilled manpower, vocational and technical education will be expanded," he said in his budget speech for the 2022-23 fiscal, which got underway on July 1.
The budget document said that the government will give emphasis to continuing to build skilled manpower and exploring new labor markets to increase remittance income.
In the medium term, the policies and strategies are consistent with the country’s 8th five-year plan and the perspective plan.
For this purpose, this year’s budget focused on poverty alleviation and inclusive growth to ensure equity and fairness in society.
Highest emphasis has been given to containing inflation. Emphasis is also given to inclusive growth, poverty reduction and job creation.
"Therefore, labour-intensive and export-oriented production will be encouraged," the document mentioned.
It said that credit and other facilities will continue to be provided to the cottage, micro, small and medium industries. In addition, agricultural diversification and ICT- dependent initiatives will be given priority. Besides, the process of creating skilled manpower for foreign employment will continue.
With these initiatives, the government hopes that it will be able to further generate employment elasticity of GDP, which will ultimately contribute to the reduction of income inequality.
As per the document, the country's economic growth was hampered due to the COVID-19 pandemic in the 2019-2020 fiscal.
Although a record 7.88 percent growth was achieved in the 2018-2019 fiscal, it decreased to 3.45 percent due to the pandemic in 2019-20.
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However, the country was able to begin the process of economic recovery very quickly. As a result, 6.94 percent growth was achieved in FY2020-2021 despite the continued impact of COVID-19.
It appears from the economic variables that indicate that the second wave of COVID-19 continued in the first quarter of the just concluded financial year (2021-22) but did not have a significant negative impact on the economy.
Considering overall perspective, the 2021-22 fiscal’s GDP growth is forecast at 7.25 percent.
At the same time, a growth rate of 7.5 percent has been targeted for the running 2022-2023 fiscal.
"The growth rate has considered the lagged effects of the COVID-19 and the protracted crisis arising from the Russia-Ukraine conflict," the document said.