Dhaka: Finance Adviser Dr Salehuddin Ahmed is set to unveil a Taka 7,90,000 crore national budget for the fiscal year 2025-26 (FY26) tomorrow, focusing on critical areas such as employment creation, inflation reduction, trade facilitation, and economic stability restoration. This budget marks the 54th for Bangladesh and the inaugural one under the interim government led by Professor Dr Muhammad Yunus.
According to Bangladesh Sangbad Sangstha, the interim government assumed power after the ousting of the Sheikh Hasina regime due to a student-led uprising. The budget announcement comes at a crucial time as the administration aims to stabilize the economy amidst significant pressures. The challenges include curbing inflation, enhancing private investment and foreign direct investment (FDI), maintaining fiscal discipline, and fortifying social safety nets in the face of global and domestic uncertainties.
Dr Salehuddin Ahmed will deliver the budget speech in a pre-recorded broadcast at 3:00 pm on Bangladesh Television (BTV) and Bangladesh Betar, with private channels and radio stations airing the speech simultaneously through BTV’s official feed. The budget will prioritize boosting the tax-GDP ratio, supporting local industries, and achieving desired revenue growth through employment creation and FDI attraction. Simplifying VAT accounting and rationalizing supplementary duty rates are also on the agenda.
The upcoming budget is expected to be Taka 7,000 crore lower than the current fiscal year’s original allocation of Taka 797,000 crore. Finance Ministry officials highlighted that the formulation aligns with the government’s focus on fiscal consolidation and efficient financial planning. Dr Salehuddin noted in an interview with BSS that the budget would be practical, considering macroeconomic and social issues.
The overall budget size is projected to be slightly smaller, with a development budget reduction of Taka 35,000 crore to Taka 2,30,000 crore and a revenue budget increase of Taka 28,000 crore to Taka 5,60,000 crore. Fiscal policy will aim for tighter coordination with monetary policy, incorporating recommendations from key reform commissions.
A significant portion of the revenue budget, around 57 percent, is earmarked for salaries, subsidies, incentives, and debt servicing, with allowances and salaries alone reaching Taka 82,000 crore. The budget may introduce dearness allowances for government employees, with subsidy expenditure expected at Taka 1,16,000 crore and interest payments accounting for about 22 percent of the revenue budget.
The projected budget deficit for FY26 is anticipated to remain below 4 percent of GDP, standing at Taka 226,000 crore, a decrease from Taka 256,000 crore in the current fiscal year. The government plans to rely on foreign borrowings, bank loans, and savings certificates to address the deficit.
A moderate GDP growth target of 5.5% is set for FY26, slightly higher than the revised 5.25% for the current year, with inflation control remaining a priority. The budget includes expanded social safety net programs to alleviate financial strain on lower-income groups. Key sectors like agriculture, health, education, and technology will receive funding priorities.
The Annual Development Programme (ADP) allocation is projected at Taka 230,000 crore, reduced from Taka 265,000 crore, indicating a more focused investment approach. Dr Salehuddin has assured a business-friendly budget with tax policies designed to enhance investment, GDP growth, and job creation. The revenue collection target for FY26 is set at Taka 518,000 crore, up from Taka 480,000 crore.
Non-development expenditures will increase, with major allocations for debt servicing, food subsidies, and banking sector reforms. The non-development budget is expected to reach Taka 560,000 crore, an increase of Taka 28,000 crore compared to the current fiscal year.
The government plans to bolster the banking sector with a dedicated allocation for the capital shortfall of state-owned banks, continuing subsidies for agriculture, fertilizers, and electricity. The budget will emphasize curbing public spending, reducing the budget deficit, and aligning tax policies with the requirements of LDC graduation. No new mega projects will be initiated, except for the ongoing Matarbari development project, financed by long-term Japanese loans to avoid increasing the debt burden.