The forthcoming national budget for the fiscal year 2026–27 is set to confront multiple pressures, as Bangladesh grapples with high inflation, significant revenue shortfalls, stagnant investment, and sluggish implementation of development projects. According to the independent research organisation Centre for Policy Dialogue (CPD), addressing these challenges will require pragmatic policy measures, comprehensive revenue reforms, initiatives to boost investment and employment, and strengthened social protection programmes.
At a media briefing held on Tuesday at CPD’s Dhaka office, Executive Director Dr Fahmida Khatun presented the main report, while Special Fellow Dr Mostafizur Rahman contributed insights. They emphasised that the budget, being the first under the new government, is being formulated amid mounting inflationary pressures and an investment slowdown.
Revenue Shortfall and Slow Development Spending
CPD’s analysis reveals that between July and January of the current fiscal year, tax collection growth under the National Board of Revenue (NBR) stood at only 12.9%, compared with the annual target of 34.5%. This resulted in a shortfall of approximately BDT 60,000 crore. Simultaneously, the implementation rate of the Annual Development Programme (ADP) was only 20.3%, marking the lowest in 15 years.
| Indicator | Target (%) | Actual (%) | Gap / Status |
|---|---|---|---|
| Revenue Growth | 34.5 | 12.9 | BDT 60,000 crore shortfall |
| ADP Implementation | 100 | 20.3 | Lowest rate in 15 years |
To cover the budget deficit, government reliance on bank borrowing has increased, with loans amounting to BDT 59,655 crore drawn between July and December. Economists warn that excessive borrowing from banks could hinder private sector investment.
Inflation and External Sector Dynamics
Overall inflation remained at 8–9% during the first eight months of the fiscal year, with food price increases placing additional pressure on households. Regional instability in the Middle East and potential disruptions in fuel supply may further exacerbate inflation. The external sector has shown mixed results: exports contracted by 3.2%, while remittances and foreign employment contributed to improving reserves.
| External Sector | July–Feb Performance |
|---|---|
| Exports | -3.2% |
| Remittances | Growth observed |
| Foreign Exchange Reserves | USD 30.4 billion |
| Taka Exchange Rate | Relatively stable |
Policy Recommendations
CPD has recommended reducing taxes on renewable energy, increasing levies on tobacco products, and enhancing investment in agriculture and social protection. Key suggestions include:
Limiting customs duties to 5% and VAT to 10% on solar panels, wind turbines, and battery storage.
Increasing health development surcharge to 5% and VAT to 20% on cigarettes, bidi, zarda, and gul.
Ensuring fertiliser supply and revitalising irrigation canals to boost agricultural production.
Implementing ‘Family Card’ and ‘Farmer Card’ schemes to strengthen social safety nets.
CPD stressed that effective revenue reforms, an investment-friendly environment, and robust social protection could stabilise the economy. The upcoming budget, if focused on these priorities, presents an opportunity not merely to bridge fiscal gaps but also to guide Bangladesh towards sustainable and resilient growth.