The government has projected its expenditure to remain at 17 per cent of the GDP in the next two fiscal years defying the adverse impact of coronavirus, although the pandemic pulled down the rate slightly.
In the current 2021-22 fiscal, the government expenditure has been set at 17.3 per cent of the GDP while it was 17.4 per cent of the GDP in the revised budget of the 2020-21 fiscal, according to an official obtained by UNB.
According to the official budgetary document, government expenditure was 13.9 per cent of GDP in 2015-16 fiscal and declined to 13.6 per cent in 2016-17 fiscal.
In the 2017-18 fiscal, the rate increased to 14.3 per cent of the GDP whereas the rate shot to 15.4 per cent in the 2018-19 fiscal. But in the 2019-20 fiscal it slightly went down to 14.9 per cent of the GDP.
As per the document, with successful implementation of reforms in Public Financial Management, government expenditure has been increased since 2015-16 fiscal.
“In the medium term (2023-24), the government intends to pursue a moderate consolidation path to keep budget deficit within a sustainable limit,” the document said.
It mentioned that due to the outbreak of coronavirus, the government has changed its spending priority to expand healthcare and provide stimulus programmes to achieve desired economic recovery.
On the other hand, as per the document, the growth rate of nominal government expenditure fluctuated between 6 and 21 per cent over the 2015-16 fiscal to 2019-20 fiscal.
Govt targets 17% expenditure of GDP for next two fiscals: Document
Average growth rate of nominal government expenditure over 2015-16 fiscal to 2019-20 fiscal 14.8 per cent was achieved.
As per the revised budget of 2020-21 fiscal, nominal growth of government expenditure is 29.7 per cent, which is the highest during the 2015-16 fiscal to 2020-21 fiscal and beyond.
In 2015-16 fiscal it was 14.9 per cent, in 2016-17 fiscal it was 11.9 per cent, in 2017-18 fiscal it was 19.8 per cent.
In 2018-19 fiscal the rate was 21.6 per cent, but it dropped drastically to 6.1 per cent in 2019-20 fiscal due to the COVID-19 pandemic that forced the whole economic activities to a standstill in the last three months of that fiscal.
But in the revised budget the government pushed forward the rate to a massive 29.7 percent.
In the budget of the current 2021-22 fiscal the rate has been fixed at 11.9 per cent.
The document mentioned that the government for the medium term (2023-24 fiscal) period has set the target to 12.5 per cent while the rate has been fixed at 9.3 per cent for the next 2022-23 fiscal.
“Medium term government expenditure targets have been set by taking the long-term development objectives and the ground reality into consideration,” the document stated.
Source: United News of Bangladesh