We know that a national budget is not merely a financial plan; it is also a reflection of political commitment. The budget for the 2026–27 fiscal year is being presented at a time of profound uncertainty, when a global economic slowdown, geopolitical tensions, trade imbalances, revenue shortfalls, and domestic structural weaknesses are all at play simultaneously. In this context, the upcoming budget requires deeper scrutiny than ever before.
A comprehensive review suggests that presenting a credible roadmap for national capital formation will be a major challenge. Although there has been strong emphasis on increasing revenue, many of the proposed measures appear disjointed—akin to “killing the goose that lays the golden eggs”. Such policies are unlikely to ensure the economy’s natural course of growth.
The proposed budget size of Tk873,000 crore appears ambitious under current realities. The greatest concern lies in the revenue target of approximately Tk636,000 crore, which largely depends on the National Board of Revenue (NBR). However, over the past four fiscal years, the NBR has consistently failed to meet its targets due to administrative weaknesses, opaque tax policies, and a lack of taxpayer confidence. There is still no firm commitment to expanding the use of technology in tax collection or ensuring administrative transparency. Instead, there is a risk of further reducing purchasing power by increasing the tax burden on the middle class and professionals.
On the expenditure side, more than Tk253,000 crore is expected to be allocated to the Annual Development Programme (ADP). While infrastructure development is important, weak implementation undermines its effectiveness. The ADP implementation rate has long remained between 65 and 70 percent, and questions persist regarding transparency in project costs. In some cases, the cost of a single footbridge is comparable to that of a four-storey building in an upscale area of Dhaka, raising concerns about the true purpose of development spending.
Inflation is now the most pressing social challenge. Overall inflation has exceeded 9 percent, while food inflation is above 12 percent. The cost of living is becoming increasingly unbearable for lower-middle-income urban households and rural communities. Yet the budget offers no bold or innovative measures to address this issue. There is no mention of urban rationing systems, subsidised public transport, or housing support. Although allocations for social safety nets have increased slightly, they remain inadequate on a per capita basis, and concerns about their quality and governance persist.
Investment and employment—the true engines of economic growth—have been addressed in optimistic terms, but there is a lack of effective initiatives. While tax incentives and a single-window service system have been mentioned, longstanding challenges faced by investors—such as land complications, bureaucratic hurdles, political uncertainty, and liquidity constraints in the financial sector—remain unresolved. Increased government borrowing from banks may crowd out the private sector, particularly SME entrepreneurs. Although export-oriented sectors enjoy some tax benefits, dollar shortages and complications in opening letters of credit continue to discourage investment.
The lack of reform in the banking sector is perhaps the most significant shortcoming. Non-performing loans have reached nearly Tk600,000 crore. Debates over bank mergers continue, and governance failures frequently make headlines, yet no effective solutions have been implemented. Without a strong banking sector, it is impossible to maintain liquidity and stabilise interest rates in the economy.
Risks also persist in the external sector. Export earnings remain stagnant, and foreign exchange reserves are still below USD 30 billion. Remittances have increased somewhat, but structural weaknesses and the prevalence of informal channels mean that their full potential is not being realised. Ongoing tensions in the Middle East may also negatively affect the overseas labour market.
In this situation, a fundamental question arises: how will such a large and ambitious budget be implemented? A budget is only successful when it aligns with reality. At present, the economy is under pressure from high levels of government borrowing, a contraction in private sector credit, persistent inflation, and a weak social protection system.
At this juncture, the budget could have been—or still has the potential to become—a transformative document, delivering clear messages on administrative reform, disciplined implementation, and the restoration of public confidence. In reality, however, it appears more like a collection of figures and promises, lacking clear direction for structural change.
What Bangladesh needs now is a coordinated and inclusive economic strategy—data-driven and grounded in reality—prioritising private sector growth, transparency in tax administration, efficiency in project implementation, and discipline in the banking sector. There is no alternative to increasing investment and employment to tackle poverty. To achieve this, tax rates must be lowered while broadening the tax base, which will require bold leadership, innovative thinking, and strong political will.
Mamun Rashid: Economic analyst and Chairman of Financial Excellence Limited
