Welcome

To our group presentation ………

Presentation on ---

Budget Deficit
 Presented by --

Group - Paramount
Islam Md. Zahidul Hossain Md Arafat

Baidya Birtin Amit Haque Kader

Rahman Md. Mushfiqur Shah Md.Salauddin

Frequently Ask Questions
What Is Budget
Deficit ?
How It Hampers?
Annual Development
Program (ADP)
 Budget Deficit

A budget deficit occurs when

an Government spends
more money than
it takes in.
 How It Is Financed

Government debt is usually

financed by borrowing, although if
a government's debt is
denominated in its own currency it
can print new currency to pay
debts.
 How To Calculate Budget
Deficit
Therefore, if t is a timeframe, Gt is
government spending and Tt is tax
Revenue for the respective
timeframe, then

Primary deficit = Gt − Tt
 Calculation OF Budget
Deficit
If Dt − 1 is last year's debt, and r is
the interest rate, then

Total deficit = Gt + rDt − 1 − Tt

 Calculation OF Budget
Deficit
Finally, this year's debt can be
Calculated from last year's debt
and this year's total deficit:

Dt = (1 + r)Dt − 1 + Gt − Tt

 How Budget Deficit
Hampers

• Increased Borrowing
• Higher debt interest payments
• Higher Taxes and lower spending
• Increased Interest rates
• Crowding Out
• Inflation
 Ways Of Reducing
Budget Deficit

• Ensure Good Governance

• Get the economy to grow faster
• Manage the risks of climate
change
• Increase Revenue Mobilization
 In Perspective Of
Bangladesh

Source: Ministry of Finance

 In Perspective Of
Bangladesh

Source: Implementation Monitoring & Evaluation Division, GoB

 Statistical Situation Of
Bangladesh

Source: World Bank Staff estimates

 How To Reduce Budget
Deficit

• Short-Term Basis

• Long-Term Basis
 How To Reduce (Short-
Term Basis)
• Maintain a tolerable limit of budget
deficit and government borrowing
(not exceeding 5% of GDP)
• Effective market monitoring and
policy intervention
• Strengthening of tax collection
measures
• Increase intra-regional trade
 How To Reduce (Short-
Term Basis)

• Establish Skill Development

Foundation
• Strengthen Bangladesh Bureau of
Statistics (BBS)
• Continue the existing incentive
package in export sector
How To Reduce (Long-Term
Basis)
• Expand communication network
particularly in railway and water
transport sector

• Pay special attention to

implement the recommendations
of Bangladesh Better Business
Forum
How To Reduce (Long-Term
Basis)
• Increase in the budgetary allocation

• Widen Medium-term Budgetary

Reform Program

• Ensure Good Governance (Easy and

smooth regulation and safety,
security) to attract Foreign
Recommendation for Annual
Development program
• Ensure the implementation of
Annual Development Program
by capacity building
 Appointment
 Training
 reviewing the procurement
policy
Current Budget Situation
Total Resources Distribution
(2009-2010Budget)

Source: Ministry of Finance

 Budget Allocation (2009-
2010 Budget)

Source: Ministry of Finance

Budget Allocation (2010- 2011
Budget)

Source: Ministry of Finance

Conclusion

Thank
you