Finance Adviser Dr Salehuddin Ahmed expressed his frustration over the soaring cost of living, acknowledging the challenges faced by ordinary citizens.
Speaking at a press conference marking the interim government's 100 days in office, he shared a personal connection to the hardships, saying, "Me, too, go on shopping. I feel sad. With TK 1,000, you can buy so little now. The common man is angry, and they express it in various ways."
Inflation: A persistent challenge
Salehuddin emphasised that inflation is a complex, long-term issue exacerbated by policy decisions and external pressures. He highlighted the printing of Tk 60,000 crore for large public sector projects without immediate output as a contributing factor. "Inflation didn’t happen overnight. It is a cumulative problem," he explained.
The rising cost of essentials like onions, potatoes, and fuel has further strained household budgets. Efforts have been made to reduce import duties on staple goods such as rice, sugar, and oil, alongside ensuring fertiliser supplies. "We’ve reduced the duty on essentials and made the LC margin zero for critical imports like rice, pulses, and soybean oil to stabilise the market," he said.
Reassurance for the banking sector
Amidst concerns about the banking sector, Salehuddin assured that no banks would be closed despite weaknesses in the sector. "Islami bank and others with challenges are improving. The government’s goal is to protect depositors and restore confidence," he said.
He also addressed fears among businesses, emphasising that those who repay loans and pay taxes have nothing to worry about. "Those who fear accountability are likely the ones who exploited the system under the previous government," he remarked.
Debt management and economic outlook
Efforts to address outstanding foreign debt have seen success, with the interim government reducing arrears from $2.5 billion to $400 million. Salehuddin clarified, "No money has been spent from the reserves. Earlier, reserves were artificially inflated to $42 billion but dropped to $12 billion when corrected. These misrepresentations were unimaginable."
By December, Bangladesh is set to receive $1.1 billion in loans from the Asian Development Bank (ADB) and the World Bank, with the amounts doubling from initial agreements. "The ADB will provide $600 million, and the World Bank $500 million. Negotiations for an additional $1 billion from the IMF are also ongoing," said Finance Secretary Dr Khairuzzaman Majumder.
Budget cuts and long-term vision
The government plans to reduce budget expenditures by cutting politically motivated and unnecessary projects within the Annual Development Program (ADP). However, salaries and allowances for government officials will remain unaffected.
Salehuddin expressed optimism for the interim government's role in setting a reformative precedent. "We aim to leave a clear roadmap for future governance. Our efforts are directed toward creating a welfare-oriented state," he said.
Strengthening financial governance
On recovering defaulted loans, Salehuddin ruled out granting judicial powers to the Bangladesh Bank Governor but emphasised making financial debt courts more effective. "The High Court has two benches dedicated to resolving writ petitions. We are ensuring they focus solely on these cases for the next three months to expedite loan recovery," he said.
Balancing optimism and reality
As the country faces persistent inflation and systemic challenges, the interim government remains focused on stabilising the economy and alleviating public hardship.
Salehuddin concluded, "The journey of major projects like the Padma Bridge has begun, but their full benefits will be realised in the long term. In the meantime, we must maintain supply chains and continue reforms to ensure immediate relief for citizens."