Finance Adviser to Unveil Tk 7.9 Tln Budget Monday

Finance Adviser Dr Salehuddin Ahmed is set to present the national budget for the fiscal year 2025–26 (FY26) on Monday, with a proposed size of Tk 790,000 crore (7.9 trillion taka). This will be the 54th budget of Bangladesh and the first under the interim government led by Nobel laureate Professor Muhammad Yunus, which assumed office following a student-led mass uprising that resulted in the change of the previous government.

The budget speech will be delivered via a pre-recorded broadcast at 3:00 pm on Bangladesh Television (BTV) and Bangladesh Betar, with private television and radio channels simultaneously airing the speech using the official feed from BTV.

The FY26 budget aims to address pressing economic challenges including inflation control, job creation, trade facilitation, and restoring fiscal discipline and economic stability. In the backdrop of political transition and global economic uncertainty, the budget is designed to stabilise the economy, improve investor confidence, and lay the foundation for sustainable growth.

Finance division officials emphasise that the budget will focus on increasing the tax-to-GDP ratio, simplifying tax compliance, facilitating local industries, attracting foreign direct investment (FDI), and expanding the social safety net programmes to protect the most vulnerable groups.

Compared to the current fiscal year's original budget of Tk 797,000 crore, the proposed budget is slightly smaller by about Tk 7,000 crore (0.87%). The reduction reflects a strategic shift towards more prudent fiscal management and better targeting of resources.

Revenue budget is projected to increase to Tk 560,000 crore, up by Tk 28,000 crore, indicating greater emphasis on day-to-day government expenditures including salaries, subsidies, and debt servicing.

Development budget (Annual Development Programme - ADP) will see a reduction of Tk 35,000 crore to Tk 230,000 crore, signalling a more focused and selective approach to capital investment projects.

The government has set a GDP growth target of 5.5% for FY26, a modest increase over the revised 5.25% growth expected for the current year. Controlling inflation remains a key priority, with the budget aiming to reduce inflation to around 6.5%.

The projected budget deficit is targeted to fall below 4% of GDP, estimated at Tk 226,000 crore (3.62% of GDP), down from Tk 256,000 crore (3.85%) in the current fiscal year. The deficit will be financed through a combination of foreign borrowing, domestic bank loans, and sales of savings certificates, all managed carefully to avoid exacerbating the national debt burden.

Approximately 57% of the revenue budget will be allocated towards salaries, allowances, subsidies, and debt servicing. Salaries and allowances alone are expected to consume Tk 82,000 crore. Subsidies, a major component of social support, are projected to rise to Tk 116,000 crore to sustain critical sectors such as agriculture, fertilisers, and electricity. Interest payments on debt will account for roughly 22% of revenue expenditures.

The budget is also expected to introduce dearness allowances for government employees to help them cope with inflationary pressures.

The interim government has taken a cautious stance by excluding new mega projects from the development budget. The only major ongoing project is the Matarbari development project, financed by long-term Japanese loans, which are low-cost and sustainable. This approach reflects the government's commitment to avoiding short-term or high-interest borrowing that could increase fiscal vulnerability.

The budget proposes an expansion of social safety net programmes by increasing both the number of beneficiaries and the allowance amounts, aiming to ease the financial burden on lower-income groups.

Funding priorities will include key sectors such as agriculture, health, education, and technology, which are critical for long-term development and economic resilience.

Dr Salehuddin Ahmed assured that the upcoming budget will be business-friendly, introducing tax reforms aimed at encouraging private investment, enhancing GDP growth, and generating employment. The government plans to simplify VAT accounting systems and rationalise supplementary duty rates to close compliance gaps and boost revenue mobilisation.

The revenue collection target for FY26 is set at Tk 518,000 crore, up from Tk 480,000 crore in the current fiscal year, reflecting efforts to improve tax administration and broaden the tax base.

The budget also aligns tax policies and business regulations with Bangladesh’s imminent graduation from Least Developed Country (LDC) status, ensuring the economy remains competitive and attractive to investors.

Public spending will be closely monitored to prevent wasteful expenditure. There will be no allocations intended only for short-term political gain that could increase the burden on future budgets.

Overall, the FY26 budget aims to balance fiscal consolidation with growth and social protection, responding to current economic challenges while setting the stage for sustainable development. With a practical and implementable approach, the interim government hopes to restore stability and confidence in Bangladesh’s economy during a period of significant political and economic transition.