The Centre for Policy Dialogue (CPD) on Tuesday called for realistic fiscal targets, stronger revenue mobilisation and policy measures to curb inflation and stimulate investment in the FY2026–27 national budget, reports UNB.
The recommendations were presented in a report titled “CPD’s Recommendations for the National Budget FY2026–27” at the organisation’s office in Dhanmondi. The report was unveiled by CPD Executive Director Fahmida Khatun under the think tank’s Independent Review of Bangladesh’s Development (IRBD) programme.
The report highlights key macroeconomic challenges facing Bangladesh and outlines policy priorities to guide the fiscal framework of the upcoming budget.
According to CPD, the FY27 budget will be the first for the newly elected government and will be formulated at a time when the economy faces multiple pressures, including high inflation, weak revenue collection, slow budget implementation, rising public debt and sluggish investment.
The think tank said the budget should address immediate macroeconomic challenges while laying the groundwork for medium-term structural reforms to stabilise the economy and strengthen resilience.
Revenue shortfall a major concern
CPD identified revenue mobilisation as a key weakness in Bangladesh’s fiscal management.
Tax collection by the National Board of Revenue (NBR) grew by only 12.9 percent during July–January of FY26, far below the annual target of 34.5 percent. As a result, the country experienced a revenue shortfall of about Tk 60,000 crore during the period.
The organisation warned that such gaps highlight the need for more realistic fiscal targets and stronger domestic resource mobilisation.
CPD also recommended exploring new revenue sources, including wealth and property taxes and taxation of the expanding digital economy, while gradually phasing out ad hoc tax incentives.
Addressing inflation and investment slowdown
The report noted that inflation has remained persistently high, exceeding 9 percent in early 2026. CPD said inflation in Bangladesh is largely supply-driven and requires policy responses that address both supply and demand factors.
Suggested measures include increased food procurement, stronger market monitoring and expanded targeted social protection programmes for low-income households.
CPD also expressed concern over declining investment and job creation. Private investment has dropped to about 22 percent of GDP, the lowest level in a decade, while foreign direct investment (FDI) remains below 0.5 percent of GDP.
To reverse this trend, the think tank recommended simplifying regulations, digitalising business services, improving access to finance for small and medium enterprises (SMEs) and introducing fiscal incentives for companies that create formal employment.
Preparing for global and structural challenges
CPD stressed that the FY27 budget must also consider broader global and structural developments. These include Bangladesh’s upcoming graduation from the Least Developed Country (LDC) category, evolving trade agreements and geopolitical tensions affecting global energy markets.
Fiscal planning should account for potential impacts on trade, tariffs, subsidies and external financing as the country transitions to the post-LDC era, the report said.
The think tank further recommended prioritising government spending on agriculture, health, education and social safety net programmes to protect vulnerable groups amid rising living costs.
It also suggested reassessing the infrastructure-heavy Annual Development Programme (ADP) and shifting more resources toward sectors that support human capital development.
According to CPD, maintaining economic stability and sustaining growth will require a balanced fiscal strategy that combines prudent deficit financing, targeted public spending and structural reforms.
Bd-pratidin English/ Jisan
