Looking for Trade Policy directions in the Forthcoming Budget

May 15, 2024

By  Zaidi Sattar

The FY2025 Budget, coming in the first week of June, will give us economists an idea of whether the new Government means business. In the past couple of years, the economy has confronted challenges on multiple fronts, particularly with respect to the country’s external balances. Thankfully, engagement with an IMF program creates the scope for managing the external shocks and internal instability, characterised by high inflation, with sound technical analysis and supporting policy programmes. 

Among the critical economic challenges that have emerged as the economy faces impending graduation out of LDC status in 2026 and consequent phase out of International Support Measures (ISM) together with preference erosion in market access, are i) the impact of trade taxes (tariffs and para-tariffs) on export performance and its diversification and ii) the persistence of high inflation for over two years. Following the presentation of the Annual Budget, the media is usually awash with reporting on the fiscal dimensions of the Budget and its potential impacts. What appears to catch least attention is the trade policy regime emanating from it. Even monetary policy directions can be gleaned from the budgeted fiscal operations – e.g. size of the fiscal deficit and its mode of financing. 

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Zaidi Sattar

Zaidi Sattar is Chairman, Policy Research Institute of Bangladesh (PRI). He did his PhD in Economics from Boston University, and taught economics at Boston University, University of Massachusetts, and Catholic University of America, before returning to Bangladesh. He is recognized as a leading expert on trade, tariffs and industrial policy issues in Bangladesh. As Team Leader or Co-Team Leader for several PRI studies for the Bangladesh Government he made substantial contribution in the preparation of the 6th (2011-2015), and 7th (2016-2020) Five Year Plans, Perspective Plan (2010-2021), Perspective Plan (2021-2041), and Delta Plan 2100. His latest 2019 publication is the book, Bangladesh Trade Policy for Growth and Employment.