World Bank predicts a concerning rise in extreme poverty by 500,000 and moderate poverty by 840,000 in FY24, highlighting a worrisome trend. This increase in poverty will inevitably lead to a decline in the income of the working population. To address this, the government must enhance its allocation for Social Safety Net programs to support the poor. However, with a stagnant tax-GDP ratio, the government may need to resort to borrowing or alternative means to finance such programs, further straining resources. Additionally, the economy will suffer from reduced productivity due to poverty and unemployment.
To tackle this issue, three key interventions are proposed. Firstly, urgent measures are needed to control inflation, including increased supervision to ensure market management. Secondly, fiscal discipline is crucial, necessitating a reduction in non-essential government spending, especially in unproductive sectors. Integrating fiscal and monetary policies will be essential for effective inflation control. Lastly, stimulating private sector investment is vital, requiring the removal of bureaucratic hurdles and effective steps to address obstacles faced by businesses. Prioritizing foreign investment is also crucial for generating new employment opportunities and ultimately reducing poverty.
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