Economy
Proposed Budget Slashes Import Duties on Key Consumer Goods
Finance Minister Abul Hasan Mahmood Ali has presented a proposed national budget of Tk 797,000 crore for the fiscal year 2024-25. This new budget introduces reduced import duties on several goods, leading to lower prices for these items.
The budget was unveiled at a parliamentary session on Thursday (June 6) at 3 pm, presided over by Speaker Shirin Sharmin Chaudhury and attended by Prime Minister Sheikh Hasina.
This marks the first budget for the current government’s fourth consecutive term and the 21st budget under Prime Minister Sheikh Hasina’s leadership. It is also Finance Minister Abul Hasan Mahmood Ali’s first budget presentation.
Goods Expected to See Price Reductions
The proposed budget includes the removal of a 20% supplementary duty on the import of packaged powdered milk, which is expected to decrease its market price. Additionally, a 25% reduction in the duty on chocolate imports will lower chocolate prices. VAT on laptop imports has been removed, decreasing the overall tax from 31% to 20.5%, which will reduce laptop prices.
The import duty on polypropylene yarn, a key raw material for carpet manufacturing, has been cut from 10% to 5%, reducing the price of locally produced carpets. The aviation sector will benefit from reduced VAT on engine and propeller imports, leading to lower maintenance costs for aircraft. Import duties on CKD parts for locally manufactured motorcycles have been reduced, which will lower motorcycle prices in the domestic market.
The import duty on manganese, used in the production of rods, bars, and angles, has been reduced from 10% to 5%, decreasing the cost of metal products. Prices for switches and sockets used in households are expected to drop due to reduced import duties on raw materials for their production. Concessions on parts for electric motor production will also result in lower prices for electric motors.
The budget reduces import duties on raw materials for dialysis filters, decreasing the cost of dialysis. Additionally, a 9% reduction in import duties on circuits will lower dialysis expenses. The prices of spinal syringes and dengue kits will also drop due to preferential import duty concessions.
Budget Overview
The budget theme is “Commitment to Building a Happy, Prosperous, Developed, and Smart Bangladesh.” The proposed budget size for FY 2024-25 is Tk 797,000 crore, a 4.6% increase from the current budget.
The current budget for FY 2023-24 was set at Tk 761,785 crore. The upcoming budget proposes an Annual Development Programme (ADP) of Tk 265,000 crore, compared to Tk 263,000 crore for the current fiscal year.
The overall budget deficit is projected at Tk 256,000 crore, a decrease from the revised deficit of Tk 283,785 crore for the current fiscal year. The target for total revenue is set at Tk 545,400 crore, up from Tk 500,000 crore in the previous year.
For FY 2024-25, the GDP growth target is set at 6.75%, potentially reaching Tk 55,97,414 crore. The current fiscal year’s GDP growth target was 7.5%, later adjusted to 6.5%. The proposed budget aims to keep inflation at 6.5%.
Referring to the countrywide recent havoc and atrocities, Prime Minister Sheikh Hasina today said that she had an apprehension there might be a strike like this by the BNP-Jamaat clique to pull down the country’s prosperity.
“. . . they (BNP-Jamaat) had wanted not to hold the elections, but we had arranged the elections. After election they thought it wouldn’t be accepted by all, but we’ve also made it acceptable to all and we’ve formed the government. It was an apprehension to me that there would be a strike like this,” she said.
The Premier made this remarks while exchanging views with editors, senior journalists and head of news of various media outlets, organised by Editors’ Guild at her office (PMO).
She mentioned that before and after the election in 2013-14, the BNP-Jmaat clique unleashed arson attacks and killings that left hundreds of people killed and thousands injured.
“It was little bit understandable that this (the activities and movement of the students) was a grave conspiracy,” she said.
Sheikh Hasina said that she didn’t want any incident which might invite any unwanted situation that will invite instability in the country. “It was the target to destroy country’s economy,” she said.
She questioned about the understanding level of the people who supported these mayhem aiming to cripple the country’s advancement and prosperity.
Sheikh Hasina, also the chief of Awami League, said that vested quarter is highly interested to destroy country’s independence and the continuation of the democracy that is going on for long 15 years.
She again said that she never wanted to deploy army personnel in the field while the students were there for the sake of their security.
“While they (students) declared that they are not involved in the on going subversive activities then we called for army,” she said.
The premiers also said that she also didn’t want to impose curfew as the country is going through a democratic environment for 15 years.
She requested the people to resist those who have done this bane for the country. “They have destroyed all the structures have been built for their welfare and livelihood. They have struck all those structures. Who will be the worst sufferer? Of course, mass people. Now it is the responsibility of the mass people to resist these terrorism and militancy,” she said.
The premier called for creating mass awareness against the militancy that has opened in the destructive activities.”If the people don’t become aware then what could we do or how much we could do alone,” she said.
She also mentioned that the targets of the recent mayhem was Awami League, Freedom Fighters and pro-liberation forces.
The Prime Minister said that when all demands of the quota-free movement students were accepted why they gave scope to the militants for doing such heinous activities.
“One day the quota-free movement activists have to answer to the nation, why they gave such opportunity to them for this destruction to the country,” she said.
PM’s Press Secretary Md Nayeemul Islam Khan moderated the programme, while Editors’ Guild president Mozammel Huq Babu delivered welcome address.
Senior journalist Abed Khan, Bangladesh Pratidin editor Nayeem Nizam, DBC Editor-in-Chief and CEO Monzurul Islam, Bhorer Kagoj Editor and Jatiya Press Club general secretary Shyamol Dutta, Daily Jugantor Editor Saiful Alam, Jatiya Press Club president Farida Yasmin, Dhaka Journal chief editor Syed Istiaque Reza, Head of News Nagorik TV Dip Azad, Amader Somoy Editor Mainul Alam, Bangladesh Journal editor Shajahan Sarder, DBC news editor Zayedul Ahsan Pintu, Ashish Saikat of Independent TV, Bangla Tribune editor Zulfiquer Russell, head of News of 71 TV Shakil Ahmed, Energy and Power Editor Mollah Amzad, Head of News of Kings News Nazmul Huq Saikat and Mamunur Rahman Khan of RTV also spoke.
Britain’s inflation rate held steady in June after returning to the Bank of England’s target the previous month, official data showed Wednesday, confounding expectations for another modest slowdown.
The Consumer Prices Index was unchanged at 2.0 percent in June from the same level in May, the Office for National Statistics said in a statement, compared with market forecasts of 1.9 percent.
“Hotel prices rose strongly, while second-hand car costs fell but by less than this time last year,” said ONS chief executive Grant Fitzner.
“However, these were offset by falling clothing prices, with widespread sales driving down their cost.
“Meanwhile, the cost of both raw materials and goods leaving factories fell on the month, though factory gate prices remain above where they were a year ago.”
Analysts said the data could cause the Bank of England to sit tight for a while longer before starting to cut interest rates.
“The chances of an interest rate cut in August have diminished a bit more,” said Paul Dales, chief UK economist at research consultancy Capital Economics.
Last month, the BoE kept its key interest rate at a 16-year high of 5.25 percent, despite slowing inflation in May.
Britain’s newly elected Labour government welcomed news that inflation remained at the BoE’s target level.
“It is welcome that inflation is at target,” said Darren Jones, Chief Secretary to the Treasury, in a statement.
“But we know that for families across Britain prices remain high… (which) is why this government is taking the tough decisions now to fix the foundations” of the UK economy, he said.
Labour, led by new Prime Minister Keir Starmer, has pledged immediate action to grow the economy after the centre-left party won a landslide general election victory to end 14 years of Conservative rule.
Later on Wednesday, King Charles III will read out Labour’s first programme for government in a decade and a half, when the UK parliament formally reopens following the July 4 election.
Elevated interest rates have worsened a UK cost-of-living squeeze because they increase borrowing repayments, thereby cutting disposable incomes and crimping economic activity.
The BoE began a series of rate hikes in late 2021 to combat inflation, which rose after countries emerged from Covid lockdowns and accelerated after the invasion of Ukraine by key oil and gas producer Russia.
China’s economy grew 4.7 percent year-on-year in the second quarter of 2024, official data showed Monday, less than analysts had expected.
“By quarter, the GDP for the first quarter increased by 5.3 percent year on year and for the second quarter 4.7 percent,” Beijing’s National Bureau of Statistics (NBS) said in a statement.
The figures were much lower than the 5.1 percent predicted by analysts polled by Bloomberg.
Retail sales — a key gauge of consumption — also slowed to just two percent in June, the NBS said, down from 3.7 percent in May.
The world’s second-largest economy is grappling with a real estate debt crisis, weakening consumption, an ageing population and trade tensions with Western rivals.
Top officials are meeting in Beijing on Monday for a key plenum, with all eyes on how they might kickstart lacklustre growth.
