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BUDGET ANALYSIS FY2024-25: Assessing The Implications for Capital Market
BUDGET ANALYSIS FY2024-25: Assessing The Implications for Capital Market
The size of the Bangladesh’s National Budget FY’2024-25 is BDT 7.97trillion which is 12% higher than the previous Budget FY’2023-24. The target of total tax revenue this year is Tk. 5.4 trillion which is 13.2% higher than the revised budget of FY’2023-24 and also ambitious for the sluggish in economic activities and disposable level. About 60% of the budget 2024-25 will be financed by NBR tax revenue, which is challenging due to lack of taxpayers and tax-culture. This year domestic borrowing is proposed at BDT 1.6 trillion which could limit private sector growth. In the proposed budget, ADP counted 2.65 trillion.
- The target 6.75% Real GDP growth can be attained subject to the faster economic recovery.
- Inflation rate may materially deviate from 6.5%, due to exchange rate pressure & domestic price spiral.
- Bangladesh’s ADP has grown by 1.62 times in past seven years (from Tk. 1,473 billion in FY2018-19 to Tk. 2,392 billion in FY2024-25). ADP expansion supports progresses in critical projects nationwide, mainly in the form of construction of roads, bridges, highways, flyovers, and government mega-projects such as Padma Bridge, Metro Rail, Ruppur Nuclear Power Plant etc.
- Among the broad sectors, human resources got the top priority, which is reflected by the highest figure of ADP sinceFY2022.
- The proposed ADP 2024-25 reckoned the highest priority in the Human resources.
- Communication infrastructure sector got the second priority in the context of ADP which is observable as per the chart- Sector wise ADP 2022-24.
- The fiscal 2024-25 budget introduces a tax on capital gains exceeding Taka 50 lakh from the transfer of shares or units of a listed company or fund by individual taxpayers. Individual investors are unlikely to be affected, as they typically do not realize such high gains. However, companies and large firms, which are more likely to generate capital gains above this threshold, will be significantly impacted.
- Most of the proposed tax, VAT and duty rescheduling may benefit some local industries; some listed companies in different sectors in the stock market will have an adverse financial and business performance due to inflexibility in tax rates compared to the non-listed companies.
Watch our exclusive detailed video on National Budget FY 2024-25