Bangladesh unveiled a $28 billion budget on Thursday, with a series of populist tax and spending measures designed to woo voters before general elections due this year. The 2.225-trillion-taka plan for the year beginning on July 1 forecasts a 17.5 percent rise in spending, with a range of infrastructure developments earmarked.
Finance Minister A.M.A. Muhith forecast 7.2 percent growth for the 2013-2014 financial year, even though there are signs the economy is slowing down sharply amid political violence and slower than expected growth in the garment sector. Muhith announced the budget in parliament, the last by his ruling Awami League party before the country goes to the polls.
"We have refixed the real economic growth target at 7.2 percent for the financial year 2013-14," the finance minister said. The budget includes $8.3 billion in development spending including new bridges, roads, and power plants, aimed at boosting growth to over 7.0 percent.
Muhith also unveiled populist measures including a permanent commission charged with raising the salaries of the million-strong public service, as well as raising the minimum tax-free income threshold and expanding welfare spending for the poor. Muhith said an expected rise of more than 20 percent in tax receipts would keep the budget deficit at 4.6 percent of GDP.
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