The government’s total expenditure during the first three quarters (July–March) of fiscal year 2025–26 amounted to around BDT 4.08 trillion. Most of this spending was incurred on the day-to-day operations of the state. Nearly 84 percent of total expenditure was allocated to the operating budget, a significant portion of which was spent on salaries and allowances for government employees, pensions, subsidies, and interest payments on loans, according to available data.
The government achieved 52 percent of its expenditure target during the first nine months of the fiscal year against a total budgetary allocation of BDT 7.9 trillion, according to the Finance Division’s quarterly budget implementation report. The government faces substantial pressure to spend the remaining approximately BDT 3.81 trillion during the final three months of the fiscal year to meet its budget target.
Analysis of the report shows that of the total expenditure of around BDT 4.08 trillion during the first three quarters, around BDT 3.42 trillion was spent on the operating budget, accounting for nearly 84 percent of the total. Of this operating expenditure, 92 percent, or nearly BDT 3.13 trillion, was current expenditure. During the period, the government spent BDT 999 billion on interest payments for domestic and foreign loans alone, representing 29 percent of total operating expenditure.
Under the operating budget, spending on long-term investment activities such as the construction of roads, bridges, and other infrastructure is classified as capital expenditure. During the first nine months of the current fiscal year, the government spent BDT 283.23 billion under this category.
Due to insufficient revenue collection, the government has had to rely heavily on bank borrowing to finance the budget deficit. During the first nine months of the fiscal year, total government revenue income, including grants, stood at around BDT 3.32 trillion.
The National Board of Revenue (NBR) collected roughly BDT 3.26 trillion in revenue during the first 10 months of the fiscal year (up to April), which was around BDT 1.04 trillion below its target.
To finance the budget deficit, the government borrowed a net of around BDT 1.02 trillion from the banking sector during the first nine months of the current fiscal year. But net borrowing from non-bank sources during the same period was negative BDT 202.24 billion. The government’s total net borrowing from domestic sources consequently stood at BDT 822.18 billion. Net borrowing from foreign sources was also negative, amounting to BDT 99.65 billion during the period. A negative net borrowing figure means that the amount of debt repaid exceeded the amount newly borrowed. Consequently, the government’s total net borrowing from both domestic and foreign sources during the first nine months of the fiscal year stood at BDT 722.53 billion.
The budget for fiscal year 2025–26 was announced in June 2025 by the then-interim government. Although the interim government oversaw the first eight months of the fiscal year, the current BNP government assumed responsibility for the remaining four months. But only 11 days after taking office, war broke out in the Middle East, driving up energy prices in the international market. The current government has consequently had to incur an additional BDT 400–500 billion in expenditure during the current fiscal year. To address the emerging challenges, the government has already sought additional financial assistance from development partners.
Commenting on the slow pace of budget implementation, a long-standing characteristic of Bangladesh’s public finance management, Professor Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD), told Bonik Barta: “Of these nine months, only about six weeks fall under the tenure of the current government. The responsibility for the overall slow pace of implementation can’t be placed solely on a specific period. Rather, it reflects a recurring feature of our administrative system. Beyond the capacity to spend public funds, the real challenge lies in ensuring that the money is spent effectively and for the intended purposes. Compared with the previous fiscal year, the implementation rate of the development budget, or Annual Development Programme (ADP), during the first nine months of this fiscal year was the lowest. Policymakers should take note of these figures. The experience of the past nine months must inform the next budget. Ensuring the proper use of allocated funds, transparency, and accountability should be the primary objectives of the new budget. Instead of rushing to spend funds merely to meet targets at the end of the fiscal year, greater emphasis should be placed from now on on improving transparency in expenditure and strengthening institutional efficiency.”
To achieve the expenditure target set in the budget for the current fiscal year, the government will need to spend around BDT 3.81 trillion in the final quarter alone. Experts say that the rush to spend funds toward the end of the fiscal year often raises questions about the quality and effectiveness of such expenditures. Consequently, the intended objectives of public spending may not be fully achieved. Every year, the pace of government spending accelerates during the final quarter, with the highest level of expenditure typically occurring in the last month of the fiscal year.
Former Finance Secretary and former Comptroller and Auditor General (CAG) of Bangladesh, Mohammad Muslim Chowdhury, told Bonik Barta, “As in previous years, the largest share of government expenditure was allocated to operating expenses. But around 80 percent of the allocation under this category was expected to be spent by March, whereas only 63 percent was actually utilised. The picture is even slower for the Annual Development Programme (ADP) and the development budget. FY 2025–26 wasn’t a normal year. Political changes and the interim government created a transition period, making it difficult to maintain the regular or consistent pattern of budget implementation.”
The former CAG further said, “In the future, greater attention should be paid to ensuring that budget projections are realistic. Expenditure allocations should be guided by rational priorities. Project directors and government officials also need to be more administratively active and better motivated.”
Government spending on the development sector remained notably sluggish during the first nine months of the current fiscal year. During this period, expenditure in the sector amounted to BDT 570.54 billion, representing only 23 percent of the target allocation for development spending. Of this amount, BDT 558.32 billion was spent on implementing the Annual Development Programme (ADP).
Sources at the finance ministry and planning ministry said that since assuming office, the current government has initiated efforts to identify the existing challenges in implementing the Annual Development Programme (ADP) and public investment projects. Particular emphasis is being placed on ensuring that projects are completed within approved budgets and timelines. Reviews have found that both costs and implementation periods have increased for many projects, affecting overall ADP execution. The tendency to release budget allocations toward the end of the fiscal year has also slowed project implementation. The reasons behind project delays and cost overruns are consequently being examined. Discussions are being held with relevant individuals and institutions to identify the problems and determine possible solutions. A review report on the matter is expected to be prepared soon.
Speaking to Bonik Barta, state minister for Planning, Zonayed Abdur Rahim Saki said, “Since taking office, the current government has provided special importance to completing public investment and ADP projects within their designated timelines and budgets. Our five-year strategic plan also identifies project implementation as a key priority. Planning alone isn’t enough; effective implementation must also be ensured. We’re reviewing various projects to determine why implementation periods and costs have increased. Discussions are being held with the relevant stakeholders to identify the constraints and explore ways to address them. A report on the matter will be available very soon. We’ll seek to implement its recommendations in the coming fiscal years.”
Regarding the current progress of ADP implementation, the state minister said, “We assumed office at the very end of the fiscal year, so it’s not possible to transform the entire situation overnight. Even then, efforts are underway to accelerate the implementation of ongoing projects. The structural problems affecting project execution are also being reviewed. Work is also being carried out to improve coordination between new and ongoing projects and to align them with the government’s priorities and policy objectives.”