[🇧🇩] Budget for 2025- 2026

Saif · May 24, 2025

FY26 budget with Tk 5,922cr for polls finalised

The finance ministry is expected to allocate a higher amount of fund, over Tk 5,000 crore, to the Election Commission in the 2025-26 financial year budget for the purpose of holding next national election and local government polls, ministry officials said.

www.newagebd.net

FY26 budget with Tk 5,922cr for polls finalised
Shakhawat Hossain 24 May, 2025, 23:53

The finance ministry is expected to allocate a higher amount of fund, over Tk 5,000 crore, to the Election Commission in the 2025-26 financial year budget for the purpose of holding next national election and local government polls, ministry officials said.

Including the projected allocation to the Election Commission, the FY26 budget outlay is expected to be Tk 7.9 lakh crore, they said.

Interim government’s chief adviser Muhammad Yunus in his address to the nation in December past year said that the national election would be held between December 2025 and June 2026.

The Election Commission has sought Tk 5,922 crore in allocation from the Finance Division under the finance ministry in the July 2025-June 2026 budget for conducting the next national election and local government polls.

Of the amount, Tk 2,794.55 crore has been sought for the national election while the rest for the local government elections.

EC secretary Akhtar Ahmed told New Age on May 21 that the Finance Division was positive regarding the allocation sought since it was connected to the much-talked-about general elections.

The Finance Division has always been generous in allocating fund to the Election Commission for holding national election, said the commission’s secretary.

Data from the finance ministry showed that the EC was given an allocation of Tk 1,230 crore in the outgoing financial year (2025-25).

The Finance Division allocated Tk 4,769 crore to the commission in FY24 featured by the January 7, 2024, flawed general elections boycotted by major political parties.

The finance ministry officials said that the budget for the forthcoming financial year, to be announced on June 2, would aim at stabilising the macro-economy and restoring fiscal discipline for obtaining about 5.5 per cent growth in the gross domestic product in the financial year.

This will be the first budget under the interim government that assumed power on August 8, 2024, after the ouster of authoritarian Awami League regime amid a mass uprising.

To achieve the fiscal goals, the interim government has decided to increase revenue generation and decrease reliance on borrowings from the internal sources mainly from the banking sector to check the crowding out effect.

The fiscal policy will supplement the current monetary policy to bring down the inflation rate to projected 6.5 per cent, said the officials involved with the budget-making process.

According to the Bangladesh Bureau of Statistics, the general inflation rate stood at 9.17 per cent in April 2025, gradually decreasing from 11.38 per cent hit in November 2024.

Economists, however, said that the overall budget financing would be challenging for the interim government as the revenue collection target was ‘ambitious’ against the backdrop of lack of capacity of the implementing agencies.

Former World Bank Dhaka Office lead economist Zahid Hussain said that they expected different budget for the forthcoming financial year from the interim government.

‘But the budget is likely to be same,’ he said, indicating the ‘highly ambitious’ planned revenue target.

The finance ministry officials said that the overall revenue generation target would be set at Tk 5.64 lakh crore with the National Board of Revenue’s collection target of Tk 4.99 lakh crore.

Till March of the outgoing financial year (FY25), the revenue board collected Tk 2.56 lakh crore in taxes against the target of Tk 3.22 lakh crore.

The less-than-projected revenue collection has been attributed to a slowdown in economic activities because of political uncertainty and inefficiencies of the tax officials.

Finance adviser Salehuddin Ahmed has recently said that the overall revenue generation would not be lower than the previous financial year (FY24).

Citing the 2 per cent growth in revenue generation until April (10 months of FY25), the finance adviser hoped that the reform programme initiated in the NBR would bolster the revenue mobilisation in FY26.

The NBR has been spilt into the Revenue Policy Division and the Revenue Management Division through an ordinance amid its failure to meet its revenue collection targets over the past fifty years.

The country’s tax-to-GDP ratio is about 7.4 per cent, one of the lowest in Asia, against the global average of 16.6 per cent.

Economists mentioned the uncertainty regarding private investments as another big challenge for the interim government for achieving the fiscal goals.

The government expenditure through development projects in the outgoing FY25 is not encouraging as only 41.31 per cent of the annual development programme was spent in 10 months, the lowest in a decade.

M Masrur Reaz, chairman of the Policy Exchange Bangladesh, said that a better implementation of the ADP would encourage the private sector to make more investments.

Increasing both public and private investments in real economy is still a big challenge, he said.

Economists said that the interim government needed extra efforts to improve the implementation rate of the ADP set at Tk 2,30,000 crore for FY26.

The new ADP is Tk 14,000 crore higher than the revised ADP of Tk 2,16,000 crore for FY25.

The finance ministry officials said that the implementation of the projected ADP that, according to them is a small one, would also help the Finance Division keep the budget deficit below 4 per cent of the gross domestic product.

The GDP size is likely to be projected at Tk 62,44,578 crore for FY26.

In FY25, the GDP size was projected at Tk 55,97,414 crore with 6.8 per cent growth (later revised down to 5.2 per cent) by the ousted AL regime in its last budget announced in June 2024.

Saif · May 25, 2025

FY 26 budget to have no false assurances: Finance adviser

Salehuddin Ahmed identified controlling inflation and ensuring macroeconomic stability as the key challenges for the upcoming budget.

en.prothomalo.com

FY 26 budget to have no false assurances: Finance adviser
Staff Correspondent Dhaka
Published: 25 May 2025, 09: 02

Finance adviser Salehuddin Ahmed. File photo

Finance adviser Salehuddin Ahmed has said the upcoming budget cannot be described as ambitious as there will be no false assurances. Its size will be comparatively reduced, due to limitations in resources.

He came up with the statement while speaking to Prothom Alo during a special interview at his secretariat office on 21 May.

The adviser is scheduled to announce the budget for 2025-26 fiscal year on 2 June. In the interview, he talked about different issues, including macroeconomics, banking sector, capital market, and NBR.

When asked about the distinctive features of the budget, Salehuddin Ahmed said it cannot be termed as ambitious under any circumstances. There will be no unrealistic, unachievable, and false assurances. Due to resource limitations, the budget size would be reduced.

He, however, acknowledged the need for borrowing, saying the government would seek loans from both domestic and foreign sources, but limit borrowing from local sources. The budget deficit will be kept below 5 per cent of GDP.

The finance adviser identified controlling inflation and ensuring macroeconomic stability as the key challenges for the upcoming budget.

“It’s a big challenge to control inflation, and we have taken it. Also, there is an issue of maintaining macroeconomic stability – not just maintaining it, but making it sustainable. Another key challenge is reviving the private sector,” he said.

About undertaking mega projects despite a 7 per cent credit growth in the private sector and around 7 per cent tax-to-GDP ratio, the adviser said there will be no mega projects like metro rail and the Padma bridge.

“What you are describing as mega is not actually a mega project. For example, the Bay terminal project requires about USD 1 billion. It is not a big project like the metro rail or the Padma bridge,” he noted.

Saif · May 27, 2025

Next budget to have realistic goals

Bangladesh switches focus from macro- onto micro-centric economic activity with budgetary focus on trade expansion, job creation and investment that benefits all. Finance Adviser Dr Salehuddin Ahmed, the custodian of the national exchequer under the post-uprising government, explained the af

thefinancialexpress.com.bd

Next budget to have realistic goals

Trade expansion, job creation, investment cardinal priorities to achieve ends, Finance Adviser Salehuddin Ahmed tells FE

Doulot Akter Mala
Published :
May 28, 2025 01:08
Updated :
May 28, 2025 01:08

Bangladesh switches focus from macro- onto micro-centric economic activity with budgetary focus on trade expansion, job creation and investment that benefits all.

Finance Adviser Dr Salehuddin Ahmed, the custodian of the national exchequer under the post-uprising government, explained the aforesaid vision, which guided him in authoring his maiden work, during an exclusive interview with The Financial Express on Sunday.

With the economy still bearing the pass-through effect of severe disruption due to immediate-past political upheaval and its aftereffects, the finance adviser walks a tightrope in making the two ends meet for resource constraints.

"Resource gap is the main challenge in budget formulation," says Mr Salehuddin, and unveils government plans on pooling foreign funds through budget-support credits apart from domestic resource mobilisation with taxes and bank and bond borrowings.

"Our needs surpass our current reserves. While we rely on domestic sources like bank and savings certificates, we must also secure foreign loans and assistance," he adds.

The economist-turned chief of the ministry of finance in the interregnum, following the August-5th changeover in 2024, says vision of this budget for 2025-26 fiscal is to build an equitable and prosperous Bangladesh where economic and business development benefits everyone.

"Our goal is to improve the quality of people's life and make daily living easier through practical and inclusive policy measures," he told the premier financial daily of Bangladesh.

"Unlike previous governments, we are not preparing a budget filled with unrealistic promises. Instead, we are focusing on achievable, clearly defined goals within the limits of our available resources. The emphasis is on realism, responsibility, and effectiveness," he says.

He stresses the need for better coordination of fiscal and monetary policies, efficient use of allocated funds rather than indiscriminate expansion,

Dr Ahmed acknowledges that cuts in the Annual Development Programme (ADP) may impact employment as the government is avoiding large capital-intensive megaprojects for development works.

"Instead, we aim to prioritize labour-intensive, small- to medium-scale local projects," he told the FE correspondents in response to a question.

A dedicated fund will be allocated to foster innovation and increase employment through entrepreneurship of the start-ups.

On health and education allocation, Dr Ahmed says the focus would be on skills and capacity development instead of structures and buildings.

He leaves a hint at widening the gap between capital market-listed and non-listed companies in the budget, downsizing export incentives in the upcoming budget.

On the ramped-up US tariffs, Dr Ahmed lists a slew of fiscal measures to offset the fallout. One is the government has knocked down the duty on cotton import to zero.

"We have lowered duty to zero in case of 100 products that are being imported from the USA. However, importing LNG from USA is very costly for us. We will increase regional trade," he says.

On external finances for bankrolling budget deficits, he says the IMF is giving budget support by June. Not only IMF, the World Bank and ADB are also giving support.

"What we will do, this time higher dependence will be on domestic resources."

The current government wants to lower tax expenditure that refers to many tax exemptions given through SROs or statutory regulatory orders beyond budgetary sanction.

"We will cut these exemptions. RMG sector is getting tax exemptions last 40 years claiming them infant industry," he says about an indicative cost-cutting measure.

"If the government doesn't increase FDI, remittance, export, we cannot lessen dependence on foreign sources for budget implementation," the finance adviser replied to a question in the end.

For the next fiscal year, the government, headed by Chief Adviser Prof Muhammad Yunus, has decided to present a Tk 7.90-trillion contractionary budget, slightly smaller than the current outlay of Tk 7.97 trillion.

This is for the first time in the country's history the government is making a national budget smaller than the previous one, taking into consideration the financing trend in the present context, according to officials concerned.

Some Tk 5.18 trillion has been targeted as revenue earnings in the next fiscal year while the Annual Development Programme (ADP) spending has been set at Tk 2.30 trillion.

The targeted gross domestic product (GDP) growth has been set at 5.5 per cent for the next fiscal year while the budget officials have set a target to bring down the rate of inflation to 6.5 per cent, from a steep rate hovering above 9.0 per cent presently.

Also, they have decided to keep the budget deficit at Tk 2.26 trillion or 3.62 per cent of the total outlay and the size of GDP in current prices for the next fiscal year has been estimated at Tk 62.5 trillion.

Saif · May 27, 2025

How the FY2026 budget can make a difference amid challenges

The FY2026 budget must be more than a mere fiscal statement.

www.thedailystar.net

How the FY2026 budget can make a difference amid challenges

VISUAL: SALMAN SAKIB SHAHRYAR

The national budget for the 2025-26 fiscal year, set to be published on June 2, comes at a critical economic crossroads. It assumes crucial importance in steering the country towards a stable economic condition. Weak management and lack of governance during the previous government's time left the economy in a deep crisis, the burden of which is currently being shouldered by the interim government. The country has been facing formidable economic challenges, including persistent inflation, low revenue generation, low investment, low employment generation, high non-performing loans (NPLs) in banks, rising external debt-servicing obligations, and poor utilisation of public funds.

Against this backdrop, expectations from the FY2026 budget are high, which are further compounded by the repeated promise from the interim government to undertake reforms in order to establish a discrimination-free society. Understandably, the interim government is now expected to demonstrate this commitment through its budget formulation, which should not aim to chase ambitious growth targets, but should prioritise macroeconomic stability, inflation control, and welfare enhancement of the common people.

Reports suggest that the size of the upcoming budget will be Tk 7.9 lakh crore, which is 0.88 percent lower than the outgoing budget. Similarly, the Annual Development Programme (ADP) will be set at approximately Tk 2.3 lakh crore—13.2 percent less than the original allocation in FY2025. This downsizing underscores the government's objective to restore fiscal discipline and curb inflationary pressures. The budget aims to lower the fiscal deficit to around 3.6 percent of GDP—the lowest in more than a decade, signalling a serious attempt at prudent financial management. However, the challenge lies in ensuring that fiscal consolidation does not come at the cost of investments in critical sectors such as health, education, and social protection.

In Bangladesh, budget allocation for health remains underwhelming, with spending still below one percent of GDP, a figure that has stagnated for decades. Similarly, the allocation for education continues to fall short of the targets outlined in the Eighth Five-Year Plan, undermining efforts to build human capital. These shortcomings highlight a tension between fiscal austerity and the urgent need to invest in social sectors to build human capital and promote equity.

As before, the challenge for the interim government will be strengthening revenue mobilisation, which remains significantly low compared to the potential for higher collections. Amid low revenue collection for about a decade, the government aims to increase revenue collection in FY2026 by 7.6 percent compared to the revised target for FY2025, which seems unrealistic. It has to address this challenge not by raising tax rates but by expanding the tax base, enhancing compliance, and digitalising tax collection systems. Bringing high-income earners and the informal sector into the tax net is critical. The postponed restructuring of the National Board of Revenue (NBR) into two separate divisions—a move designed to improve tax administration but met with protests from officials—demonstrates the complexities of reforming revenue institutions. While political resistance has delayed this reform, it remains imperative that the interim government modernises tax administration, enforces compliance, and combats tax evasion.

Subsidy reform is another area demanding immediate attention. Blanket subsidies, particularly in energy and agriculture, contribute significantly to fiscal pressures and distort market signals. The budget has to phase out such subsidies and adopt targeted support to ensure that the vulnerable population are protected, while promoting efficient resource allocation.

Monetary policy will need to work in tandem with fiscal measures to stabilise the economy. The adoption of a market-driven exchange rate regime—a condition for IMF loan disbursement—has been a significant reform. However, it could lead to volatility of the currency market, which should be addressed through careful management. The Bangladesh Bank has adopted a contractionary monetary policy to control inflation, which has to be pursued for a few more months as the inflation rate is still high. However, the productive sectors should have access to sufficient liquidity support. Coordinated fiscal and monetary efforts are necessary to stabilise the exchange rate, manage external borrowing, and strengthen foreign exchange reserves. The balance of payment situation has improved due to higher exports and remittances in recent months. Efforts to increase formal remittance inflows and prudent foreign debt management will play crucial roles in maintaining BoP stability.

The other part of the budget is judicious public spending. With fiscal space constrained, the budget should not rely excessively on commercial borrowing from banks that could crowd out private investment and make borrowing expensive for the private sector. Concessional external financing should be pursued wherever possible. However, careful assessment of repayment capacity and project returns is required in this case. Efficiency in public spending is paramount. The government must focus on high-impact, socially beneficial projects while excluding politically motivated, low-return projects. The planning adviser mentioned that the ADP would be more realistic and efficient in FY2026.

The national budget is also expected to prioritise employment generation. Bangladesh faces rising youth unemployment and underemployment, compounded by structural challenges in the labour market. Therefore, the upcoming budget must also consider measures to bolster employment generation. It should prioritise labour-intensive sectors such as RMG, agriculture, ICT, and construction. Investment in skills development, digital literacy, and entrepreneurship support will be vital to prepare the workforce for meeting the market demands. Micro, small, and medium enterprises should be provided with support in areas such as access to finance, capacity-building, and market linkages.

The FY2026 budget should also clearly present a roadmap of economic measures in view of Bangladesh's graduation from the Least Developed Country (LDC) status in November 2026. The loss of duty-free, quota-free (DFQF) market access and concessional financing will necessitate proactive strategies to maintain export competitiveness and financial stability. The budget should support productivity enhancements, strengthen trade facilitation mechanisms, and invest in export diversification to reduce dependency on a narrow range of products and markets. Additionally, in view of the US reciprocal tariff and LDC graduation, the budget must rationalise tariff structures to align with global trade norms and enhance competitiveness. In the case of finance, Bangladesh should explore alternative sources of concessional financing, such as climate funds, green bonds, and public-private partnerships for sustainable infrastructure development.

While stabilisation and reform are essential, the budget must not lose sight of social equity. The interim government's proposed streamlining of social safety nets, reducing the number of schemes while increasing beneficiary coverage, reflects a move towards efficiency. However, allocations for social protection remain inadequate. The new budget must ensure that reforms translate into tangible benefits for the most vulnerable segments of society, supported by robust implementation and monitoring mechanisms.

The FY2026 budget must be more than a mere fiscal statement. While budgets are annual by design, they must reflect the country's long-term ambitions, grounded in its medium-term strategies like five-year plans and sectoral policies. By focusing on prudent fiscal management, targeted social protection, and strategic investment in infrastructure and human capital, policymakers can navigate Bangladesh's current economic challenges and foster economic opportunities for citizens.

Dr Fahmida Khatun is executive director at the Centre for Policy Dialogue (CPD).

Saif · May 28, 2025

Speakers urge allocation of 3.0 pc of GDP for climate finance in 2025–26 Budget

Speakers on Wednesday at a seminar demanded that 3 per cent of Bangladesh's GDP be allocated for climate financing in the upcoming 2025–26 national budget. The event, titled “National Budget 2025–26: Climate Budget And Coastal Bangladesh”, was held at the CIRDAP Audito

thefinancialexpress.com.bd

Speakers urge allocation of 3.0 pc of GDP for climate finance in 2025–26 Budget

FE ONLINE REPORT
Published :
May 28, 2025 20:33
Updated :
May 28, 2025 20:33

Speakers on Wednesday at a seminar demanded that 3 per cent of Bangladesh's GDP be allocated for climate financing in the upcoming 2025–26 national budget.

The event, titled “National Budget 2025–26: Climate Budget And Coastal Bangladesh”, was held at the CIRDAP Auditorium in the city, organised by EquityBD in collaboration with COAST Foundation, CPRD, CDP, Waterkeepers Bangladesh, Sundarban Protection Movement, BCJF, Udayan, DUS, and SDI.

Chaired by disaster management expert Gawher Nayeem Wahra and moderated by COAST Foundation Executive Director Rezaul Karim Chowdhury, the keynote was presented by MA Hasan of the COAST Foundation.

Mr. Wahra said that the successful implementation of the Bangladesh Delta Plan hinges on resolving transboundary river issues.

He called for greater local involvement in embankment management.

Rezaul Karim Chowdhury argued for a minimum 3 per cent GDP allocation, advocating for climate-resilient infrastructure such as concrete embankments and clean water systems.

He emphasised the need for coordinated research to guide climate adaptation strategies.

AHM Hamidur Rahman Azad of Bangladesh Jamaat-e-Islami criticised the neglect of coastal communities in national development projects and called for better connectivity and livelihood programs for displaced populations.

Umama Fatema condemned environmentally harmful projects of the past, like the Rampal and Matarbari coal plants.

She stressed the disconnect between budget promises and actual implementation, urging stronger monitoring mechanisms.

The seminar concluded with a unified call for the government to prioritise climate-focused budget allocations, highlighting the urgent need to protect the lives and livelihoods of nearly 40 million people residing in Bangladesh's climate-vulnerable coastal regions.