Bangladesh posted a record BDT 4.33 trillion in revenue in the 2024–25 fiscal year, combining taxes administered by the National Board of Revenue and receipts collected outside it. Although collections rose somewhat in the first nine months of the current 2025–26 fiscal year, it still fell short of target by about BDT 1 trillion. Against that backdrop, the government is preparing to set an ambitious BDT 6.95 trillion revenue goal for FY 2026–27. Discussions also indicate the upcoming budget, the first under the BNP-led government elected to the 13th parliament, will total around BDT 9.3 trillion.
This push for the largest budget on record comes as the global economy slows. Domestic conditions have also weakened: GDP growth has slipped below 4 percent while inflation remains in the 9 percent range. Apart from remittance inflows, most core indicators have turned down. Exports have contracted. Private investment has stalled, with credit growth in the sector falling to about 6 percent. The banking system carries non-performing loans exceeding 30 percent. War in the Middle East has compounded these pressures, undermining energy security and exposing the power sector to acute risk.
Economists and business leaders say the priority now is to shield both the economy and households. They argue the new government’s first budget must be realistic, reform-driven, employment-focused, and geared to restore confidence. Over the past decade and a half, the ousted Awami League government steadily expanded budgets without discrimination, even as 20 to 25 percent of allocations went unimplemented, before setting even larger targets the following year. The BNP-led government, experts warn, cannot follow that path. Its first budget should instead serve as a roadmap to set the economy on a new path.
Zahid Hussain, a former World Bank lead economist in Dhaka, describes the current situation as one of “survival” and “staying afloat”. “This is a difficult period for Bangladesh and the broader world,” he told Bonik Barta. “Even if the Middle East conflict ends, risks to Bangladesh’s economy won’t recede quickly. Growth is slowing while inflation has remained elevated for a prolonged period. There is no case for an ambitious budget in these circumstances. Yet we hear the government is moving towards a BDT 9.3 trillion budget.”
Hussain questioned the proposed revenue target for the new budget. “The government already struggles to raise BDT 5 trillion from domestic sources through VAT and other taxes,” he said. “Aiming for nearly BDT 7 trillion is thus fanciful. We assume the authorities will honour their commitment not to print money or draw down reserves. If so, where will the financing for such a large budget come from? If they resort to printing money to implement it, inflation will worsen.”
He also pointed to past practice. “We have seen governments unveil headline budgets only to start cutting within six months. In the process, necessary allocations also get trimmed. So why frame a budget that can’t be implemented?”
As in previous years, NBR has begun pre-budget consultations with economists, business leaders and other stakeholders ahead of the 2026–27 fiscal plan, while the finance ministry drafts the framework. In those discussions, most participants have called for lower VAT and tax rates in light of current conditions. They have also urged the withdrawal of excessive tax burdens across several sectors. Officials have, in turn, signalled a willingness to accept some of these demands to ease pressure on businesses. That would imply a smaller budget.
Information from the finance ministry points in the opposite direction. Several officials involved in the process maintain the BNP-led government’s first budget could total BDT 9.3 trillion, with a revenue target of BDT 6.95 trillion. Of that, NBR would shoulder BDT 6.04 trillion. The remaining BDT 2.35 trillion would be financed through domestic and external borrowing. The plan envisages BDT 1.19 trillion in loans from internal sources, including banks, and BDT 1.16 trillion from abroad.
A review of the past decade shows annual budget increases of 10 to 15 percent. The plan for 2026–27 implies a rise of about 18 percent on the current fiscal year.
The Awami League government set a BDT 7.97 trillion budget for FY 2024–25. Within a month of its passage, Sheikh Hasina’s administration fell on August 5, 2024 in a mass uprising. The subsequent interim government then carried that budget forward. By year-end, however, implementation reached only BDT 6.29 trillion, leaving more than 20 percent unrealised. For FY 2025–26, the interim administration held the headline size broadly flat at BDT 7.9 trillion, though that plan now also looks set to miss as in previous years.
Under the revised budget for FY 2025–26, the government tasked NBR with raising BDT 5.03 trillion in revenue. In the first nine months to March, the board collected BDT 2.87 trillion against a target of BDT 3.85 trillion, a shortfall of BDT 979.9 billion. For March alone, it aimed for BDT 600.5 billion but collected BDT 335.22 billion. To meet the annual goal, collections in the final quarter would have to average roughly BDT 720 billion each month.
Tapan Chowdhury, a director at Square Group, argued the government must secure a business-friendly environment without raising the tax burden on compliant firms. “We want to believe the new budget will show greater commitment and tolerance towards the economy’s genuine stakeholders,” he told Bonik Barta. “Tax concessions alone are not enough. The authorities must ensure respect and ease of doing business for those who truly contribute to the economy. Only then will the budget succeed and leave a stronger future for the next generation.”
He added that the budget should serve a broader purpose. “It can’t be just an exercise in numbers. It must map out a livable, job-creating future. Young people are increasingly reluctant to stay in the country because they doubt whether their talent will be valued and respected. Restoring that confidence should be a core objective so that our children can build dignified careers and businesses at home rather than looking abroad.”
The current strain on the economy has built up over several years. The interim government that took office after the 2024 mass uprising published a white paper to set out the true state of the economy. A group of leading economists led by Debapriya Bhattacharya prepared that report. It found that $234 billion had been siphoned out of the country through various channels during the Awami League’s 15 years in power. Over the same period, authorities overstated growth and inflated the size of GDP with questionable data, while understating inflation despite a sharp rise in prices.
Following the fall of Sheikh Hasina’s government, GDP growth in FY 2024–25 slowed to 3.49 percent. Inflation, by contrast, averaged in double digits that year and remained elevated at 8.71 percent in March this year. Export growth has also turned negative in FY 2025–26: shipments fell 4.85 percent in the first nine months to March, while import growth stayed below 4 percent. Remittance inflows are the sole bright spot.
Despite these weaknesses, government borrowing continues to climb to finance the deficit. The state has leaned heavily on bank loans. The 2025–26 budget had set a borrowing target of BDT 1.04 trillion. With nearly three months of the fiscal year still to run, the government has already exceeded that level. Between July and April 9, it borrowed BDT 1.13 trillion from banks. Of that, BDT 445 billion was taken in the 52 days after the BNP-led administration assumed office. Credit to the private sector, by contrast, remains constrained. Central bank data show public sector credit grew 33.57 percent in the one-year period between last and this February, compared with only 6.03 percent for the private sector. Total public debt, from domestic and external sources, now stands at roughly BDT 24 trillion.
Finance Minister Amir Khasru Mahmud Chowdhury has nonetheless pledged to build an investment-friendly economy since taking office. “Our main objective is to shift from a debt-driven model to one led by investment,” he said of the upcoming budget. “We don’t intend to print money. We need to attract domestic and foreign investment and create jobs through it. The budget will be framed to support investment so that investors can place confidence in Bangladesh.”
He further said, “Our major problem is that we fail to sustain policies over the long term. Frequent changes send the wrong signal to investors. We want policies to remain stable over a defined period so that investors can plan. Without that confidence, no one will invest. We are reviewing these issues.”