Bangladesh is considering its largest-ever national budget for the fiscal year 2026–27, with discussions indicating a possible outlay of Tk 9.30 lakh crore. The proposed budget comes at a time when the economy faces multiple internal and global challenges, raising concerns among economists and business leaders about its feasibility and sustainability.
Revenue Targets and Shortfall
The government is reportedly setting an ambitious revenue collection target of Tk 6.95 lakh crore for the upcoming fiscal year. Of this, Tk 6.04 lakh crore is expected to be collected by the National Board of Revenue (NBR), while the remaining Tk 2.35 lakh crore will be financed through domestic and foreign borrowing.
However, current revenue performance highlights significant gaps:
- Highest revenue record (previous fiscal year): Tk 4,33,719 crore
- Current fiscal year (first 9 months):
- Target: Tk 3,85,852.59 crore
- Collected: Tk 2,87,862.59 crore
- Shortfall: Tk 97,990 crore
In March alone, the NBR collected Tk 33,522 crore against a target of Tk 60,050.45 crore. To meet the annual target, the agency would need to collect approximately Tk 72,000 crore per month in the remaining period—an objective many consider unrealistic.
Economic Context
The proposed expansion in budget size comes amid a weakening economic environment:
- GDP growth has dropped below 4%, with a recorded 3.49% in FY2024–25
- Inflation remains high, with a recent rate of 8.71% in March and an annual average in double digits
- Export growth is negative at –4.85% (July–March)
- Private sector credit growth is around 6%
- Non-performing loans exceed 30% in the banking sector
Remittance inflows remain the only relatively positive indicator.
Expert Concerns
Economist Dr. Zahid Hussain has warned against pursuing an overly ambitious budget under current conditions. He stated:
“A difficult time is ongoing not only for Bangladesh but for the entire world. Even if the Middle East war ends, economic risks for Bangladesh will not disappear soon.”
He further cautioned:
“The government struggles to collect Tk 5 lakh crore from internal sources including VAT and taxes. Thinking of nearly Tk 7 lakh crore in revenue is unrealistic.”
“If the government prints money to implement such a budget, inflation will worsen. We have seen in the past that large budgets are later revised downward within months.”
Borrowing and Debt Pressure
To meet the projected deficit, the government plans to borrow:
- Tk 1,19,000 crore from domestic sources (including banks)
- Tk 1,16,000 crore from foreign sources
Already, government borrowing has exceeded targets:
- Annual borrowing target (FY2025–26): Tk 1,04,000 crore
- Borrowed till April 9: Tk 1,12,761 crore
Within just 52 days of taking office, the current government borrowed Tk 44,500 crore from banks. Total outstanding debt is estimated at approximately Tk 24 lakh crore.
Business Community Perspective
Business leaders have emphasized the need for a supportive economic environment rather than increased tax pressure. Tapan Chowdhury, Director of Square Group, said:
“Ensuring a business-friendly environment without increasing tax pressure on honest entrepreneurs is crucial.”
He added:
“The budget should not just be about numbers—it must serve as a roadmap for future generations, focusing on employment and restoring confidence.”
Policy Direction
Finance Minister Amir Khasru Mahmud Chowdhury has reiterated the government’s goal of shifting from a debt-driven to an investment-driven economy. He said:
“Our main objective is to transform the economy from debt dependency to investment dependency. We do not want to print money.”
“We must attract domestic and foreign investment and create employment. Policy stability is essential so that investors can plan with confidence.”
While the government aims to set a record budget, economists and stakeholders stress the importance of realism, reform, and economic stability. With persistent inflation, weak growth, and rising debt, the upcoming budget is expected to play a critical role in restoring confidence and steering the economy toward recovery.
