Debapriya urges new govt to take cautious steps on foreign deb

Terming external debt pressure the biggest challenge for the newly elected government, economist Debapriya Bhattacharya on Thursday, February 19, said the administration must act with prudence to stabilise the economy.

“Even during the interim government’s tenure, the burden of foreign loans did not ease. Bangladesh is in a fragile position regarding external debt repayments. There is no scope for populist measures at this moment,” Debapriya said at a media briefing titled ‘Starting Point of the New Government: An Economic Review’ at BRAC Centre Inn in Dhaka’s Mohakhali.

Addressing the BNP-led government, Debapriya said restraint in fiscal management would be crucial. “You may not call it austerity, but discipline is essential. Without fiscal restraint, inflation and other macroeconomic vulnerabilities will intensify in the next fiscal year.”

Referring to the BNP’s landslide victory in the 13th national election, he said the party now holds sufficient political strength to undertake difficult economic reforms. “The government should form a transition team to steer the economy out of the current crisis. This team can prepare briefing documents for each ministry, outlining where the economy stands and the direction it needs to take.”

Debapriya also urged a thorough review of procurement and foreign agreements signed by the interim government before leaving office. “Many of those contracts are not well known to the public. It must be examined whether any rules or procedures were violated. All agreements should be reassessed prioritising national interest.”

He categorically ruled out printing money as a solution to the crisis, stressing the need for structural reforms and prudent macroeconomic management.

At the event, Towfiqul Islam Khan, Additional Director (Research) of the Centre for Policy Dialogue (CPD), delivered the keynote paper, while CPD Distinguished Fellow Prof Mustafizur Rahman attended it.

Source: UNB